FTC Ends Non-Compete Ban Appeals: What Payments Recruiters Want You to Know

In 2024, the Federal Trade Commission (FTC) proposed a rule to ban most non-compete agreements in employment contracts. The rule created uncertainty across industries, particularly in payments and FinTech, where competition for talent is intense and employee mobility can directly impact innovation and revenue.

In September 2025, the FTC officially withdrew its legal defense of the rule, dropped its appeals, and ended efforts to enforce the ban. While the proposal has been vacated, the issue remains far from settled.

Instead of pursuing a federal ban, the FTC is now focusing on data collection and targeted enforcement.

This development holds implications for employers and employees in high-growth, high-skill fields.

What Happened: A Quick Summary

The FTC Dropped Its Appeals

In two separate legal challenges, courts blocked the FTC’s Non-Compete Clause Rule. Rather than continue its defense, the FTC withdrew all appeals in September 2025. As a result, the nationwide ban is no longer moving forward. Oversight returns to state-level laws and case-by-case enforcement.

See the official FTC press release for details.

Public Inquiry Opened

The FTC launched a Request for Information (RFI) to gather data on how non-compete clauses affect competition, wages, and job mobility. Stakeholders can submit comments until November 3, 2025.

Targeted Enforcement Begins

Even without a federal ban, the FTC is moving forward with individual enforcement actions. It recently filed a complaint against Gateway Services, Inc., alleging misuse of non-competes across nearly all job categories. It also issued warning letters to firms in health care and staffing, sectors where employee movement is frequent and contractual restrictions are widespread.

What Employers Should Consider Now

With the nationwide ban off the table, companies may assume non-competes are no longer a concern. That would be a mistake.

While enforceability will now depend on state law, federal enforcement has shifted, not disappeared. Employers should review contract practices and prepare for continued scrutiny.

1. Revisit Contract Terms by Role

Broad non-compete clauses applied to all employees, regardless of role or access to sensitive data, may not hold up under state law and could attract FTC attention.

Employers may benefit from evaluating:

• Whether restrictions are limited in scope and geography

• Whether the role justifies restriction (such as C-suite, product leads, or client-facing positions)

• Whether other tools like NDAs or non-solicits might be more appropriate

Companies often find that narrowly tailored agreements reduce risk and improve retention.

2. Know Your State's Rules

Each state treats non-competes differently:

• California, Oklahoma, and Minnesota ban them almost entirely

• Colorado imposes fines for overly broad clauses

• Illinois, Massachusetts, and Washington allow them but impose strict conditions

Employers hiring across state lines or supporting remote teams may want to adapt offer letters based on jurisdictional differences.

3. Watch for FTC Enforcement Trends

The agency has shown a willingness to pursue employers it views as overreaching, even without a national rule in place. Businesses in sectors with high turnover, reliance on junior or non-executive staff, or frequent use of broad non-competes may attract more attention.

Staying informed about the FTC’s ongoing RFI and enforcement actions can help employers stay ahead of future rulemaking.

What Employees Should Know Now

For employees, especially those considering new roles or reviewing existing contracts, the FTC’s announcement brings a shift in focus, not an end to the issue.

While a federal ban is off the table, employment mobility still matters, and certain types of restrictions may no longer be enforceable in your state or may raise flags with regulators.

1. Understand the Terms You’ve Signed

Not all non-competes are created equal. Employees should consider:

• What is being restricted (industry, client type, role)

• For how long and in what geographic areas

• Whether the restriction seems tied to actual responsibilities

If the agreement seems overly broad or applies to a role with no access to trade secrets or client lists, it may be worth asking questions or requesting clarification.

2. Check State Law Before Making a Move

State laws vary widely. In some jurisdictions, a non-compete may be unenforceable regardless of what was signed. In others, it may depend on salary level, position, or how recently the agreement was signed.

Employees changing jobs should stay informed about local laws or speak with a qualified resource before

making decisions.

3. A Payments Recruiter Can Help You Navigate Offers

Working with a recruiter can provide additional insight during job changes. While recruiters cannot give legal advice, they can often flag contracts that have caused delays for other candidates or identify employers with outdated practices.

For employees in high-demand roles, clarity around restrictions can speed up your next move and help avoid complications.

What Both Sides Should Keep in Mind

Trend	What It Means for Employers and Employees
No national ban	Both parties must follow state law
FTC case-by-case enforcement	Scrutiny will increase in targeted industries
Rise of remote work	State laws affect distributed teams differently
Pushback from candidates	Overly broad contracts may deter top talent
Preference for flexibility	Narrow, reasonable terms support retention

Payments Recruiters Role in Navigating the Shift

For both companies and jobseekers, recruiters play a valuable role in navigating the post-ban hiring environment.

Employers may want to partner with payments recruiters who understand current hiring market expectations, can help align contract terms with competitive standards, and reduce friction by identifying compliance concerns early.

For candidates, a recruiter can help clarify whether a potential restriction is unusual, how similar companies are structuring offers, and what roles match your experience without creating legal tension.

Wrap Up

The FTC’s attempt to ban non-compete agreements is over for now. Its attention to employer contract practices, however, has only intensified.

Employers should revisit how and where restrictions are applied. Employees should understand their rights and responsibilities under state law. Both groups are navigating a landscape where compliance, fairness, and hiring competitiveness are increasingly linked.

In high-growth industries like payments and FinTech, talent moves fast. The companies and professionals that stay informed and adapt accordingly will be better positioned for long-term success.

Whether you are building your next leadership team or exploring a new opportunity, Dexterous can help you navigate today’s hiring environment. We support clients and candidates across payments and fintech.

Visit our job board or contact us to start a conversation.