Remember the big buzz last year about the Federal Trade Commission’s Non-Compete Clause Rule (16 CFR Part 910)? It was set to shake up workplaces by banning most non-compete agreements, with a targeted effective date of September 4, 2024. But, in a plot twist worthy of a summer blockbuster, a federal judge in Northern Texas hit the pause button on August 20, 2024, leaving the rule stuck in limbo ever since.

The FTC, under the Biden Administration, had high hopes for this rule, aiming to free workers from restrictive contracts and boost job mobility. Employers, however, weren’t exactly popping champagne. Business groups like the U.S. Chamber of Commerce sued to block it, arguing the FTC overstepped its authority in issuing the new federal rule declaring most non-competes unlawful nationwide. The Northern Texas District Court agreed, setting the rule aside nationwide, and the FTC promptly appealed the District Court’s ruling to the Fifth Circuit Court of Appeals; where it still sits as of today (March 27, 2025). Most recently, on March 7, 2025, the federal government, under the new Trump administration, filed a motion to stay the Fifth Circuit appeal for 120 days while the FTC examines public comments regarding the rule. An appeal was also filed in the Eleventh Circuit appeal of a similar injunction against the Non-Compete Rule this is only applicable to the parties in the case.

So, where does that leave us? Well, without the FTC’s unifying federal rule banning most non-competes for employees, the issue will still be decided by each state’s law. In Oklahoma, for example, non-competes are banned by statute, with limited exceptions involving the sale of good will and dissolution of partnerships. Interestingly, Oklahoma is one of only four states that ban non-competes outright with very limited exceptions. While 33 states and the District of Columbia have laws restricting their use.

Time will tell what happens with the federal effort to put a single unifying law in place nationwide with respect to non-compete agreements. Until then, check with your legal counsel on a state-by-state basis to ensure you and your company are in compliance with applicable state law on this topic.