FTC Non-Compete Enforcement Update: January 2026
/As of January 2026, the Federal Trade Commission (“FTC”) has formally moved away from its prior attempt to impose a nationwide ban on employee non-compete agreements and has instead returned to a case-by-case enforcement approach under existing antitrust law.
The FTC’s 2024 final rule, which would have broadly prohibited most non-compete agreements, never took effect. Federal courts in both Texas and Florida enjoined enforcement of the rule, concluding that the agency exceeded its statutory authority. In September 2025, the FTC withdrew its appeals and accepted those rulings, bringing the rulemaking effort to an end.
Since that time, and continuing into early 2026, the FTC has made clear that while a blanket federal ban is no longer being pursued, non-compete agreements remain subject to scrutiny where they are overly broad, imposed indiscriminately, or untethered from legitimate business interests.
Targeted Federal Enforcement
The FTC’s current enforcement posture was illustrated by a September 2025 action against Gateway Services, Inc., in which the agency alleged that company-wide non-compete restrictions imposed on nearly all employees constituted an unfair method of competition. The matter reinforced the FTC’s focus on expansive, one-size-fits-all restrictions rather than narrowly tailored agreements tied to specific roles or protectable interests.
In our work advising business owners, employers, and investors, Palmeri Law Group regularly sees that enforcement risk turns less on the existence of a non-compete and more on how carefully it is drafted and applied. Agreements that are customized to the business, the individual’s role, and the competitive landscape are materially more defensible than standardized forms.
State Law Continues to Control
While federal enforcement draws attention, state law remains the primary driver of non-compete enforceability. Several states enacted or expanded restrictions during 2025, particularly in regulated industries. Those laws remain fully operative in 2026 and vary widely by jurisdiction.
For businesses operating across multiple states, this has increased the importance of role-specific drafting and periodic review. Our firm frequently assists clients in evaluating existing agreements across jurisdictions and aligning them with current state-law standards while accounting for evolving federal enforcement priorities.
Florida Perspective: Employers and Independent Contractors
Florida continues to be one of the more favorable jurisdictions for enforcing restrictive covenants, but enforceability is not automatic.
Under Florida Statute § 542.335, non-compete agreements are enforceable only where they protect a legitimate business interest and are reasonable in scope, duration, and geography. Florida courts may enforce compliant agreements and, in some cases, modify overly broad provisions—but they will not rescue agreements that fail to identify a legitimate interest at the outset.
Florida law also permits non-compete agreements with independent contractors. However, businesses should proceed with care. In practice, Palmeri Law Group often advises Florida businesses that overly aggressive restrictions on contractors can create more risk than protection, particularly where the restriction is disconnected from confidential information, customer relationships, or goodwill.
For businesses that rely heavily on contractors—such as those in professional services, sales, health care, construction, and technology—the enforceability of a non-compete often turns on precision. Agreements must reflect the actual working relationship and the specific interest being protected, rather than relying on generic language.
Practical Outlook for Florida Businesses
The current regulatory environment favors thoughtful, narrowly tailored restrictive covenants over broad, standardized restrictions. As enforcement priorities continue to evolve, businesses that periodically review and update their agreements are better positioned to protect their interests and avoid unnecessary disputes.
Palmeri Law Group routinely advises Florida-based and multi-state businesses on the drafting, review, and enforcement of non-compete, non-solicitation, and confidentiality agreements, with a focus on practical enforceability and risk management.
This content is provided for informational purposes only and does not constitute legal advice.