The Federal Trade Commission’s 2024 rule to ban most non-competes was set aside by a federal court, and the FTC dismissed its appeals in September 2025.
A plain-English summary. This is general information, not legal advice, and the rules change, so check the current text.
The 2024 rule would have banned most new non-competes and made most existing ones unenforceable.
A federal district court in Texas set the rule aside and barred its enforcement, finding the FTC lacked statutory authority.
On September 5, 2025 the FTC voted to dismiss its appeals and accept the ruling.
With the rule gone, state law and the contract terms control. For Michigan employers, that means MCL 445.774a.
Employers should still avoid overbroad covenants. A covenant that is unreasonable can be cut back or not enforced, and agencies can still examine specific practices.
Watch for future federal or state action. The rules around restrictive covenants continue to change.
Severance and benefit continuation tied to a covenant are governed by the agreement, the plan and ERISA.
Keep the covenant and benefit terms in step so a change in one does not leave the other behind.
Review form agreements when the law changes.
Check Your Forms. Confirm covenants are consistent with Michigan law.
Do Not Assume a Ban. No federal ban is in effect.
Watch for Changes. Monitor state and federal developments.
Use Counsel. Have an attorney review the language.
Assuming a Federal Ban. The rule is not in effect.
Ignoring State Law. Michigan law still governs.
Overbroad Terms. Unreasonable terms risk being cut back.
FTC, Accession to Vacatur of the Non-Compete Clause Rule — The September 2025 filing.
Michigan Antitrust Reform Act, MCL 445.774a — The Michigan standard.
ERISA section 510, 29 U.S.C. 1140 — Benefit rights.
Short answers to what employers ask most. This is general information, not legal or tax advice.
A federal court set it aside and the FTC dismissed its appeals.
State law and the contract terms. In Michigan, MCL 445.774a.
Yes, so keep watching.
Employer duties and the benefit-plan questions that follow.
Employer duties and the benefit-plan questions that follow.
Employer duties and the benefit-plan questions that follow.
Employer duties and the benefit-plan questions that follow.
Employer duties and the benefit-plan questions that follow.
Employer duties and the benefit-plan questions that follow.
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