The noncompete ban took 165 pages to write, 27 to kill, and four to bury.

On the morning of September 4, 2024, about 30 million American workers were scheduled to wake up free. The date was printed in the Federal Register. On that day the noncompete clause would become an unfair method of competition and stop binding anyone below the rank of senior executive. The morning came and nothing happened, because fifteen days earlier a federal judge in Dallas had set the rule aside in 27 pages, and because a year after that the agency that wrote the rule walked into two courts of appeals and withdrew. It was never enforced against an employer or argued before an appellate judge. It was deleted from the Code of Federal Regulations in February 2026 in a notice that also cleaned up two unrelated rules, a burial in a shared plot.

One question drove this piece, and I set out to answer it from the paper. How was the federal ban on noncompetes written, litigated, and abandoned, and what did Illinois do instead?

Commissioners publish dissents that read like depositions of their colleagues, judges attach transcripts to their orders, and legislatures leave a source note under every section.

The proposal

On January 5, 2023, the Commission voted 3 to 1 to propose a rule making it an unfair method of competition for an employer to enter into a noncompete with a worker, to keep one in force, or to tell a worker he was bound by one. The notice ran two weeks later at 88 FR 3482. It estimated that one in five American workers, about 30 million people, was bound by such a clause, and that a ban would raise total earnings by $250 billion to $296 billion a year. The 30 million rested in large part on a 2014 survey of 11,505 respondents, 18 percent of whom reported a noncompete. Comments were due March 20, 2023, later extended to April 19.

The lone dissenter, Commissioner Christine S. Wilson, filed fourteen pages that nobody wanted on the record and that the record has since borne out. The proposal was "a radical departure from hundreds of years of legal precedent." The agency's enforcement experience with noncompetes was, in her parenthesis, "(within the last week)." The Commission had announced three noncompete settlements on January 4, 2023, the day before the vote. She predicted "protracted litigation in which the Commission is unlikely to prevail" and called the project "a demanding and futile effort." Hers was the first brief against the rule.

The rule

Fifteen months and 26,000 comments later, on April 23, 2024, the Commission adopted the final rule by a vote of 3 to 2. Chair Lina M. Khan, Rebecca Kelly Slaughter, and Alvaro Bedoya voted yes; Melissa Holyoak and Andrew N. Ferguson voted no. "Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism," Khan said. The rule was published May 7, 2024, at 89 FR 38342, 165 pages of three-column type ending at 38506. It made it an unfair method of competition under Section 5 of the FTC Act to enter into a noncompete with any worker after September 4, 2024, and to enforce an existing one against anyone except a "senior executive," a worker in a policy-making position paid at least $151,164 a year. Employers were to send bound workers "clear and conspicuous notice" that the clause was dead.

The arithmetic was as grand as the ambition. The rule would raise workers' earnings by $400 billion to $488 billion over ten years, cut spending on physician services by $74 billion to $194 billion over the same decade, lift the rate of new firm formation by 2.7 percent, and yield "thousands to tens of thousands of additional patents per year." The agency grounded its power in Section 6(g) of the 1914 Act, which lets the Commission "make rules and regulations for the purpose of carrying out the provisions of" the statute. The whole case came down to that clause and the half trillion dollars hung on it.

The written dissents arrived June 28, 2024, and they were briefs in everything but the caption. Ferguson's ran 45 pages. "It is by far the most extraordinary assertion of authority in the Commission's history," he wrote. "Congress has not authorized us to issue it. The Constitution forbids it. And it violates the basic requirements of the Administrative Procedure Act." Holyoak's dissent was shorter and conceded the problem the rule was meant to solve. "My dissent should not, however, be interpreted to mean that I endorse all non-compete agreements," she wrote. "To the contrary, I would support the Commission's prosecution of anti-competitive non-compete agreements, where the facts and law support such enforcement." It is the policy the agency now runs.

Three courtrooms, one statute

Ryan LLC sued in the Northern District of Texas, joined by the Chamber of Commerce of the United States and three other business groups. On July 3, 2024, Judge Ada E. Brown granted a preliminary injunction limited to the plaintiffs before her. Page one carried the reasoning. "The text, structure, and history of the FTC Act reveal that the FTC lacks substantive rulemaking authority with respect to unfair methods of competition under Section 6(g)," she wrote.

Twenty days later, in Philadelphia, a tree-service company got the opposite result. Judge Kelley B. Hodge denied ATS Tree Services a preliminary injunction on July 23, 2024, finding its claimed harm "too attenuated to constitute an immediate, irreparable harm," and then ruling on the merits anyway. "The Court finds that the FTC acted within its authority under the Act in designating all non-compete clauses as 'unfair methods of competition,'" she wrote, and she found the major questions doctrine "not applicable here."

Three weeks later, in Florida, a third judge split the difference on the record. Judge Timothy J. Corrigan heard Properties of the Villages in August 2024, ruled from the bench, and attached the transcript to his order of August 15. He found the statutory arguments to "have some force" but unlikely to win, and found that the breadth of the rule "requires me to consider the FTC's authority to issue the final rule in the context of the major questions doctrine." "I disagree with the ATS court that the Commission has ever exercised its Section 6(g) rulemaking power in the scope and the manner" the final rule demanded, he said. The court was not, "repeat not," entering a stay of the rule generally or an injunction of nationwide application. He had also said he was "somewhat comforted in knowing that my decision today is likely not to be the end of it." It was nearly the end of it.

On August 20, 2024, Judge Brown finished what she had started. On summary judgment she held that the Commission "lacks substantive rulemaking authority with respect to unfair methods of competition, under Section 6(g)," a "housekeeping statute" with no penalty attached. Separately, the rule was arbitrary and capricious. "The Rule imposes a one-size-fits-all approach with no end date," and as to why the agency chose a categorical ban over targeting specific harmful clauses, "the FTC provides no evidence or reasoned basis." She rejected party-limited relief, because under the Administrative Procedure Act setting aside a rule "has 'nationwide effect,' is 'not party-restricted,' and 'affects persons in all judicial districts equally.'" The order's last operative words, in the court's own capitals, said the rule "is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter."

On the day the rule was to take effect, then, one court had vacated it for the nation, one had upheld it, and one had enjoined it for a single plaintiff. The Commission appealed Brown's judgment to the Fifth Circuit on October 18, 2024, and Corrigan's injunction to the Eleventh. Then the calendar turned, and with it the Commission.

The appeal nobody argued

On September 5, 2025, the Commission voted 3 to 1 to withdraw its notices of appeal in both circuits and, in the agency's phrase, to "accede to the vacatur" of its own rule. Ferguson, now chairman, wrote for himself and Holyoak, Mark R. Meador concurred, and Slaughter dissented. No appellate court ever ruled on the question. The rule died on the agency's own paper, a little over a year after the judgment it was appealing.

Ferguson's statement runs three pages in a familiar genre, the victory lap over one's own agency. "The Rule's illegality was patently obvious," it says. He and Holyoak had warned "that the Rule was unlawful six ways from Sunday; that the Rule would never survive judicial review." He counted the prior Commission's noncompete docket at four cases in four years, three of them settled "the day before issuing the proposed noncompete rule." And he committed the agency to Holyoak's 2024 alternative. "We will continue to enforce the antitrust laws aggressively against noncompete agreements. But we will leave the legislating to the people's representatives in Congress and in the States."

Slaughter's dissent is two pages and makes one procedural point worth keeping. The law, she wrote, "does not permit the agency to void this popular rule under cover of darkness" by withdrawing from litigation. "The law requires that we hear from the American people." Her two pages do not engage the question of what process is owed to a rule a court has already set aside, and the majority's three pages never reach the process for removing it. The agency answered five months later, in one Federal Register paragraph.

The paragraph arrived on February 12, 2026, at 91 FR 6507, in a final rule that also revised the Negative Option Rule and withdrew the CARS Rule. Three rules of the prior Commission, each vacated, dispatched in four pages. The agency skipped notice and comment on the ground that it was performing "the ministerial task of conforming these Rules to the results ordered by the circuit courts," which is accurate for two of the three and curious for the third, since the noncompete rule was set aside by a district court and the Commission withdrew its appeals before either circuit ruled. Part 910 was gone the day the notice ran.

What replaced it

The day before it dropped the appeals, the Commission did the two things it would later call the replacement. It accepted a consent order from Gateway Services, a pet-cremation company accused in the complaint of putting noncompetes on "almost all of its employees" and barring them from the industry anywhere in the country for a year after leaving. The vote was 3 to 1, Slaughter dissenting. The order, made final in November 2025 by a 2 to 0 vote, freed nearly 1,800 workers. The same day it posted a Request for Information asking the public, "and market participants in the healthcare sector in particular," to name employers still using noncompetes by November 3, 2025. Six days later the chairman sent warning letters to "several large healthcare employers and staffing firms."

The pace then slowed to the speed of adjudication, which is the only speed case-by-case enforcement has. In the thirteen months after it abandoned a rule covering 30 million workers, the Commission's own noncompete docket shows two noncompete consent orders, one no-hire order, three rounds of warning letters, and a workshop. The complaint against Rollins, Inc., the parent of Orkin, alleged noncompetes on nearly all of its more than 18,000 employees, two years and 75 miles, and the chairman alleged that Rollins had sent "hundreds of threatening letters or initiated litigation" against workers who left. The Commission issued a complaint and proposed order on April 15, 2026, sent letters to 13 other pest-control companies, and finalized the order on June 22, 2026, both votes 2 to 0. A May 8, 2026 letter went to Mortgage Connect, a mortgage services company, over a noncompete it was suing to enforce. The chairman's Rollins statement carved out "directors, officers, or other defined senior leaders who exercise policy-making authority and are eligible for grants of equity," the class the vacated rule had also spared.

At a workshop on January 27, 2026, the chairman explained the theory. The Commission "must proceed on a case-by-case basis, acting against specific noncompete agreements that clearly lack justification and likely have adverse effects." Critics who wanted a ban "should take their arguments to Congress, not to me." The method was "education through enforcement," and he described how the lesson would travel: "lots of client alerts will be sent out from law firms every time the FTC brings an enforcement action." Two consent orders in a year, amplified by the marketing departments of the American bar, are now the federal policy on a clause the same agency once said bound 30 million people.

Congress

Everyone in this story agrees Congress could settle it; Ferguson said so in September 2025 and again in January 2026. The 2024 majority maintained that the 1914 Act already gave the agency the power, which is another way of saying Congress never quite said so. The dispute runs back to 1975, when Congress wrote procedures for Commission rules on unfair or deceptive practices and left the competition clause alone. The ATS court read that silence as preserving the power, the chairman reads it as withholding it, and Congress has had fifty years to pick one.

The Workforce Mobility Act, which would ban most noncompetes by statute, was introduced in the Senate on June 11, 2025, by Senators Chris Murphy, Todd Young, Kevin Cramer, and Tim Kaine, two Democrats and two Republicans, and referred to the Committee on Health, Education, Labor, and Pensions. As of the Library of Congress's September 9, 2026 update, that referral is the bill's only action. A House version, H.R. 10215, was introduced September 1, 2026, and referred to two committees. Since the rule was set aside, the federal legislative record is two introductions, three referrals, and no hearing, markup, or vote on either bill.

What Illinois did instead

Instead of a ban, Illinois wrote an income test. The Freedom to Work Act began in 2016 with one idea, no noncompetes for "low-wage" employees, defined in Public Act 99-860 as anyone earning the minimum wage or $13 an hour, whichever was greater, effective January 1, 2017. Senate Bill 672, enacted as Public Act 102-358 and effective January 1, 2022, rebuilt it into a code, a year before the Commission proposed its rule. The text is at 820 ILCS 90.

A noncompete is void unless the worker's actual or expected annualized earnings exceed $75,000, rising to $80,000 in 2027, $85,000 in 2032, and $90,000 in 2037. A covenant not to solicit customers or coworkers is void at $45,000 or less, rising on the same schedule to $52,500. Both are void without "adequate consideration," defined as two years of continued employment after signing or other professional or financial benefits. Both are void unless the employer "advises the employee in writing to consult with an attorney before entering into the covenant" and gives the worker the document 14 calendar days before the job starts, or 14 calendar days to review it. An employer that sues on a covenant and loses pays the employee's costs and reasonable attorney's fees. The Attorney General may sue over "a pattern and practice" of violations, with penalties of up to $5,000 per violation, $10,000 for repeats within five years, each affected worker a separate violation. Public-sector union workers are outside noncompetes altogether. Construction workers, union or not, are outside both covenants unless they manage, design, engineer, sell, or hold an ownership stake. Since January 1, 2025, a covenant cannot be enforced against a licensed mental health professional where it would raise the cost or difficulty of care for veterans and first responders.

The legislature then amended its own work without litigation, which the Commission never managed. Two 2024 acts, Public Act 103-915 on mental health professionals and Public Act 103-921 on construction, each rewrote Section 10 without accounting for the other, so that for five weeks the statute carried two subsections lettered (e). Public Act 103-1062 reconciled them in February 2025, and the First 2025 General Revisory Act, 3,039 pages of reconciliations and corrections, re-enacted Section 10 in August and, by its own account, changed nothing of substance. Nobody filed a forty-five-page dissent over any of it. That is how a rule survives, in a code, under a section number, amended by people who have to run for office.

Enforcement is where the two systems can be compared. In August 2024 Attorney General Kwame Raoul joined six other states in a settlement with Valvoline, which the seven states alleged had made hourly oil-change workers sign one-year, 100-mile noncompetes. Valvoline agreed to stop and to notify affected current and former employees within fifteen days, about 440 current and 500 former workers by the states' estimate. In November 2024 Raoul joined 17 other attorneys general in the Eleventh Circuit to defend the Commission's rule, saying "I support the FTC's efforts to remove these career obstacles for workers in Illinois and across the nation." The federal rule he defended is gone, and his own statute is in force. On October 9, 2026, his office filed an unopposed motion in the Circuit Court of Cook County to enter a consent decree with Equinox Holdings, Inc., over covenants the complaint says sat in the contracts of more than 300 Illinois employees earning under the $75,000 and $45,000 lines between 2022 and 2025, without the written advice to consult a lawyer and without the 14 days. Equinox "denies that it violated the IFWA in any manner" and agreed to a $910,000 civil penalty, $990,000 in restitution, rewritten Illinois agreements within 21 days of entry, and annual manager training. It is the only consent decree under the rebuilt Act that I found in the Attorney General's published releases.

What they said, and what the record shows

What they said	What the record shows
Chair Khan, April 23, 2024: "Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism."	The rule never took effect. Set aside August 20, 2024; removed from the CFR February 12, 2026 (Exhibits 5, 9).
Commissioner Wilson, January 5, 2023: "protracted litigation in which the Commission is unlikely to prevail."	Three district courts split two to one against the rule, and the Commission withdrew both appeals before any appellate court ruled (Exhibits 5 to 8).
Chairman Ferguson and Commissioner Holyoak, September 5, 2025: the rule "would never survive judicial review."	It never received appellate review. The Commission they lead withdrew the appeals that would have supplied it (Exhibit 8).
Chairman Ferguson, September 5, 2025: "we will continue to enforce the antitrust laws aggressively against noncompete agreements."	Thirteen months on, the agency's listing shows two noncompete consent orders, one no-hire order, three rounds of letters, and one workshop (Exhibit 10).
Commissioner Slaughter, September 5, 2025: the law "does not permit the agency to void this popular rule under cover of darkness."	The removal ran in the Federal Register in daylight on February 12, 2026, without notice and comment, under the good-cause exception (Exhibit 9).
Attorney General's release, October 9, 2026: Equinox "violated the IFWA hundreds of times between 2022 and 2025."	The decree filed the same day recites that Equinox "denies that it violated the IFWA in any manner," and awaited court approval when filed (Exhibit 13).
The statute is titled the Illinois Freedom to Work Act.	The freedom applies at $75,000 and below. Above that line the Act's own five-part test governs, and a noncompete that passes it is enforceable (Exhibit 12).

The charge, and a proposal

The Commission may well have been right about noncompetes. One court found its evidence "inconsistent and flawed," another accepted it, and that argument now belongs to statehouses. The charge is that an agency staffed with lawyers spent fifteen months and 26,000 comments building a national rule on a clause its own dissenter told it would not bear the weight, that it printed a September 4 effective date it had every reason to doubt, and that its successors, holding a live appeal and a full record, withdrew it and let one district court's judgment stand for the nation sooner than let a court of appeals say what the statute means. The central legal question, what Section 6(g) authorizes, is as unsettled in October 2026 as in January 2023. Three district judges have answered it three ways. No appellate court has answered it at all. Whoever tries next starts from the same unsettled question, and every employer and worker starts from a state statute, if their state has one.

Congress is charged with the vacancy. It has had fifty years to say outright that the Commission may, or may not, write competition rules, and since at least February 2023 a bill on noncompetes to pass or kill. It has done neither, and the two current versions sit in three committees. The courts are charged with nothing except the system they sit inside, which produced three incompatible rulings on one statute in seven weeks and then, under the Administrative Procedure Act as the Fifth Circuit reads it, let one district court settle the matter for the country while the appeal evaporated.

Illinois is charged, gently, with modesty. The General Assembly wrote the only noncompete law in this story that is in force, then left it to one office with one pattern-and-practice tool, which in nearly five years has produced, in its public releases, one decree. The thresholds it set rise by $5,000 and $2,500 every five years, and the wages of the people they protect do not wait for 2027. The proposal is small, because small survives. Publish the Section 30 docket every year, every investigation opened and every decree entered, so the deterrent can be seen. Index the thresholds to wages instead of to a legislator's calendar. And let the Commission do what its chairman says it now does, one employer at a time, while Springfield does what Washington could not, which is write the rule down and keep it.

How this was reported

This piece was built from documents, each pulled on October 28, 2026. The Federal Register texts came from govinfo.gov. The district court rulings came from the judiciary's collection on govinfo.gov, from CourtListener's RECAP archive for the August 20, 2024 Ryan opinion, and from the Middle District of Florida's docket for the Villages order, which recites an August 13, 2024 hearing while its attached transcript is dated August 14. Commission releases, statements, dissents, and remarks came from ftc.gov, the enforcement chronology from its noncompete listing. Congressional status came from Library of Congress bill-status records on govinfo.gov. The Illinois statute and six Public Acts came from ilga.gov by direct download, and the Attorney General's releases and the Equinox motion from that office's site. No search result was used as a fact. Three gaps remain. The Attorney General's site carries the Equinox motion and no order entering the decree. The General Assembly's bill-status page for Senate Bill 672 did not render its roll calls. The Commission has not named the healthcare employers it wrote to in September 2025. Corrections, if needed, run at the top of this page.

Columns are the views of their authors. They are not legal advice and not the position of the firm.