The Federal Trade Commission (FTC) recently moved to continue the stays of pending appeals of successful challenges to its controversial non-compete ban. Despite having a Republican majority – including two Commissioners who opposed the ban when it was promulgated – the FTC needs additional time to decide “whether” it should reconsider its defense of the ban. This development does not affect employers at this time. But the FTC’s recent filings, including a “corrected” version, raise questions about the non-compete ban’s fate.

Background

In April 2024, the FTC issued the Non-Compete Clause Rule (Rule) that banned nearly all non-compete agreements as “unfair methods of competition.” A lawsuit challenging the Rule was filed in the U.S. District Court for the Northern District of Texas, which granted summary judgment in favor of the challengers and vacated the Rule (Ryan, L.L.C. v. Federal Trade Commission). A second lawsuit was filed in the U.S. District Court for the Middle District of Florida, and that court entered a preliminary injunction enjoining the FTC from enforcing the Rule against the plaintiff (Properties of the Villages, Inc. v. Federal Trade Commission). The FTC appealed the cases to the Fifth Circuit Court of Appeals and Eleventh Circuit Court of Appeals, respectively, in the fall of 2024.

Since those appeals were filed, the Trump administration returned to office, and the President named Commissioner Andrew Ferguson as Chairman of the FTC. Chairman Ferguson (and fellow Republican-appointed Commissioner Melissa Holyoak) had dissented when the FTC issued the Rule. In March 2025, the FTC moved to stay both appeals for 120 days, which the appellate courts granted. Thereafter, the U.S. Senate confirmed Republican-appointed Commissioner Mark Meador, and President Trump fired Democrat-appointed Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. With the Republican-appointed Commissioners in firm control, the FTC was in position to abandon these appeals and its defense of the Rule.

Additional Time Needed to Decide “Whether” to Reconsider Defense

However, on July 10, 2025, the FTC filed a status report in the Fifth Circuit case (Ryan) and moved to extend the stay for an additional 60 days. The FTC initially stated:

Since this Court granted the Commission’s abeyance motion, the Commission has undergone significant personnel changes, including the Senate confirmation and the swearing in of Commissioner Mark Meador. The Chairman of the Commission continues to believe that the Commission should reconsider its defense of the rule challenged in this case, although some additional time is necessary to allow for that reconsideration. Thus, the Commission respectfully requests that this Court extend the previously granted abeyance for an additional 60 days. The Commission would respectfully propose that it file another status report at the end of that 60-day period regarding appropriate next steps in this appeal. [emphasis added]

On the same day, the FTC then filed a “corrected” status report in which it replaced the underlined sentence with the following sentence: “In light of these changes and the press of Commission business, some additional time is necessary to determine whether the Commission should reconsider its defense of the rule challenged in this case.” (emphasis added) (In the Eleventh Circuit case (Properties of the Villages), the FTC filed a similar status report and motion to extend the stay for an additional 60 days – with the “corrected” sentence – on July 18, 2025.)

It is unclear why the FTC “corrected” its original status report. The original status report aligned with the expectation that this Administration’s FTC would abandon the Rule. The revised report leaves room for the FTC to continue defending it. To be sure, the FTC may ultimately dismiss these appeals. And perhaps its ability to do so now is impacted, at least in part, by the “significant personnel changes” and “press of Commission business,” including the reinstatement of Democratic-appointed Commissioner Slaughter. Time will tell. On July 11, the Fifth Circuit granted the FTC’s motion and continued the stay for another 60 days, or until September 8, 2025, and ordered the FTC to provide a status report at the end of the stay period. Stay tuned.

We will continue to follow developments in these cases. If you have any questions about these cases or the Non-Compete Clause Rule, please contact a member of Buchanan’s Antitrust Practice Group or Labor & Employment Section.