The Florida Bar

Florida Bar Journal

Recent Developments in Attempts To Ban Noncompetes at the Federal and State Level

Labor and Employment Law

Labor and Employment Law Section logoSince the mid-1990s, Florida law has favored the use of restrictive covenants, such as noncompete agreements (noncompetes), which prohibit an employee from competing against his or her employer.[1] The same is not true in the rest of the U.S.

By 2018, federal agencies were beginning to investigate the scope and use of noncompetes throughout the country. After his election in 2020, President Joseph Biden specifically directed various federal agencies to take steps to investigate and address the use of noncompete agreements. Two federal agencies — the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) — acted on President Biden’s order and declared that noncompete agreements violate federal law. Litigation ensued with mixed results for employers. Now, given the recent change in presidential administration, it appears more and more likely that previous efforts to ban noncompete agreements at the federal level will be rolled back.

This article reviews Florida’s law on restrictive covenants, summarizes the federal developments, and then identifies recurring trends in proposed legislation to Florida’s law on restrictive covenants.

A Primer on Florida’s Restrictive Covenants Law

Traditionally, states have regulated restrictive covenants, including noncompetes, through state statutes and caselaw.[2] Currently, four states — California, Minnesota, North Dakota, and Oklahoma — have adopted statutes voiding nearly all noncompetes between employers and employees.[3] The remaining 46 states — including Florida — have statutory provisions and/or caselaw that address the enforceability of noncompetes.[4] Florida’s statute governing restrictive covenants is found in F.S. §542.335.

Historically, the common law disfavored restrictive covenants, particularly noncompetes, for imposing hardships on employees and the general public.[5] In 1953, the Florida Legislature enacted F.S. §542.12, which authorized some forms of noncompetes to protect a business’ legitimate interests so that employees and agents could not learn a business’ trade secrets, meet their customers, and then go into competition with that business.[6] After numerous conflicting case decisions evolved in applying F.S. §542.12, the Florida Legislature enacted two statutory amendments starting in 1990, when it enacted F.S. §542.33, and then again in 1996, when it enacted F.S. §542.335, which now serves as the statute addressing restrictive covenants in Florida.[7]

F.S. §542.335 now establishes the standards for courts applying Florida law to follow to construe and determine the enforceability of restrictive covenants. To be enforceable, a restrictive covenant must be in writing and it must be signed by the person against whom enforcement is sought. Moreover, the person seeking enforcement must plead and prove the existence of one or more legitimate business interests justifying the covenant.[8] Any restrictive covenant not supported by a legitimate business interest is unlawful and, thus, void and unenforceable.[9] Under the statute, legitimate business interests include 1) trade secrets; 2) valuable confidential business or professional information that otherwise does not qualify as trade secrets; 3) substantial relationships with specific prospective or existing customers, patients, or clients; 4) customer, patient, or client goodwill associated with an ongoing business, specific geographic location, or specific marketing or trade area; or 5) extraordinary or specialized training.[10]

Further still, to be valid and enforceable, the restrictive covenants must be reasonable in time, area, and line of business.[11] As it relates to a reasonable time, there are certain rebuttable presumptions identified in the statute.[12] For former workers (i.e., employees, agents, and independent contractors) a time restraint of six months or less is presumed reasonable and a time restraint of more than two years is presumed unreasonable.[13] On the other hand, for a seller of all or a part of the assets of a business, a time restraint of three years or less is presumed reasonable and a time restraint of more than seven years is presumed unreasonable.[14]

The Federal Trade Commission Starts the Ball Rolling

In 1914, Congress created the Federal Trade Commission (FTC) via the Federal Trade Commission Act (FTCA or FTC Act).[15] Since the beginning, the FTC was vested with the power to prevent unfair methods of competition.[16] Congress expanded the FTC’s power in 1938 through 15 U.S.C. §45 (colloquially referred to as “Section 5”) to empower the FTC to prevent “persons, partnerships, or corporations. . . from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.”[17] Additionally, pursuant to 15 U.S.C. §46 (colloquially referred to as “Section 6”) the FTC is empowered with authority to make substantive rules related to unfair methods of competition.[18]

Starting in 2018, the FTC began evaluating noncompete agreements, holding public hearings and workshops and inviting public comment.[19] Following his election, President Biden issued an executive order that encouraged the FTC to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.[20] Also in 2021, the FTC started several investigations into how companies were using noncompete agreements, assessing whether such use constituted unfair methods of competition.[21]

By January 2023, the FTC acted on President Biden’s executive order, providing notice of rulemaking that it intended to “prohibit employers from entering into non-compete clauses with workers starting on the rule’s compliance date” and “require employers to rescind existing non-compete clauses no later than the rule’s compliance date.”[22] After receiving public comments, on April 23, 2024, the FTC voted 3-2 to enact a ban on noncompete agreements in employment contracts (noncompete ban).[23]

According to its terms, the noncompete ban would apply to “workers” (any natural person who worked — paid or unpaid — and regardless of job title such as independent contractor) and “senior executives” (any worker who is in a policy-making position and receives total annual compensation annualized to at least $151,164).[24] According to its terms, the noncompete ban prohibited any “term or condition of employment that either ‘prohibits’ a worker from, ‘penalizes’ a worker for, or ‘functions to prevent’ a worker from” seeking or accepting work from another person or entity or operating a similar business.[25] The FTC indicated that while its new regulation would not prohibit all non-solicitations, non-disclosure agreements, and similar restrictive covenants, it took the position that such agreements, when drafted to be overly broad, are functionally equivalent to noncompetes and, thus, the noncompete ban would also prohibit them.[26] It further noted that such agreements would need to be reviewed on a case-by-case assessment.[27]

The noncompete ban also purported to prohibit all noncompetes retroactively and prospectively for workers and only prospectively for senior executives.[28] There were limited exceptions, which generally involved agreements related to business sales.[29] Importantly, under the ban, employers would have been required to provide notice to employees who have non-competes, advising them any previously executed non-compete was no longer enforceable.[30] The noncompete ban also claimed it would supersede contrary state law.[31]

The noncompete ban was set to go into effect on September 4, 2024. Numerous legal challenges to the noncompete ban were immediately filed throughout the country. The three most prominent cases were filed in the Northern District of Texas (Ryan LLC v. Federal Trade Commission, 739 F. Supp. 3d 496 (N.D. Tex. 2024)), the Eastern District of Pennsylvania (ATS Tree Services, LLC v. Federal Trade Commission, No. 24-1743, 2024 WL 3511630 (E.D. Penn. July 23, 2024)), and the Middle District of Florida (Properties of the Villages, Inc. v. FTC, No. 5:24-cv-316-TJC-PRL, 2024 WL 3870380 (M.D. Fla. Aug. 15, 2024)). The district courts rendered diverging opinions on the noncompete ban, each of which are summarized below.

• N.D. Tex: Ryan LLC v. Federal Trade Commission (Part I) — The same day the FTC issued the noncompete ban, one affected employer sued in the Northern District of Texas.[32] In Ryan, the plaintiff, Ryan LLC, and business trade group intervenors in the case[33] argued that the noncompete ban was unlawful because 1) “it exceed[ed] the FTC’s statutory authority;” 2) “it [was] patently unconstitutional;” and 3) “it [was] arbitrary and capricious.”[34] More specifically, Ryan LLC argued that FTC Act’s text, history, and structure did not grant the FTC authority to issue rules like the noncompete ban.[35] Ryan LLC argued that if read that way, the noncompete ban would be an unconstitutional delegation of legislative authority, and the FTC was itself unconstitutionally structured because it was insulated from presidential oversight.[36] Relatedly, the plaintiff-intervenors contended the FTC Act did not authorize the noncompete ban because it exceeded the FTC’s statutory authority and the noncompete rule was the product of a flawed decision that violated the Administrative Procedure Act (APA).[37]

On July 3, 2024, the U.S. District Court for the Northern District of Texas agreed with the plaintiff and the plaintiff-intervenors, concluding that the FTC exceeded its statutory authority in implementing the noncompete ban based on the text and structure of the FTC Act, which indicated that the FTC lacked authority to make this sort of rule, and the rule is arbitrary and capricious.[38] Although Ryan LLC and the plaintiff-intervenors requested a nationwide injunction, the Ryan court only granted a preliminary injunction in favor of the plaintiff, Ryan LLC, and the plaintiff-intervenors, the Chamber of Commerce of the United States of America, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce at that time.[39] This ruling meant the noncompete ban would still go into effect for other employers on September 5, 2024.[40] But the Ryan court announced it would rule on the merits of the action by August 30, 2024.[41]

• E.D. Penn: ATS Tree Services, LLC v. FTC — Separately, an entity in Pennsylvania, ATS Tree Services, LLC (ATS) challenged the FTC’s authority to issue the noncompete ban, echoing many of the arguments raised in the Ryan case.[42] In ATS Tree Services, on July 23, 2024, the court denied ATS’s motion for preliminary injunction.[43] It rejected ATS’s arguments that 1) the FTC lacks statutory authority to promulgate substantive rules to prevent unfair methods of competition; 2) the rule exceeds the FTC’s authority and that Congress unconstitutionally delegated legislative power; or 3) the rule improperly displaced state regulations on non-compete clauses and that the Major Questions Doctrine (MQD) applied to prevent the FTC’s actions.[44]

The MQD requires agencies to “point to ‘clear congressional authorization’ to regulate” certain matters.[45] Under this doctrine, the Supreme Court precedent indicates that “there are ‘extraordinary cases’ in which the ‘history and the breadth of the authority that [the agency] has asserted,’ and the ‘economic and political significance’ of that assertion, provide a ‘reason to hesitate before concluding that Congress meant to confer such authority.”[46] Justice Gorsuch’s concurrence in West Virginia v. Environmental Protection Agency, 597 U.S. 697, 743-748 (2022), sought to synthesize how federal courts should apply the MQD in practice, which he viewed as a two-step inquiry.

First, a court must determine whether an agency action involved a “major question.” Justice Gorsuch noted three categories of questions that usually constitute major questions requiring clear congressional authority: 1) Those of political significance, such as when an agency seeks to resolve a matter of great political significance or give finality to a debate that was raging across the country; 2) those of economic significance, such as when an agency seeks to regulate a large portion of the country’s economy or would require billions in new spending by the private sector; 3) and those impacting federalism concerns, such as when an agency seeks to control an area that is within the province of state law.[47]

Second, if a question was determined to be major, then the MQD analysis required courts to evaluate what constitutes “a clear congressional statement authorizing an agency’s action.”[48] Justice Gorsuch identified four warning signs that would undermine an agency’s action: 1) the agency is relying on oblique or elliptical language or subtle interpretations of a statutory provision at issue; 2) the agency is adopting a long-extant statute focused on one problem to solve an entirely different problem; 3) the agency’s newest use of the statute is at odds with the agency’s prior use of that same statute; and 4) the agency’s newly asserted expertise does not match the congressionally assigned mission or expertise.[49]

Returning to the ATS court’s analysis, that district court concluded the FTC was within its authority to issue a nationwide ban on noncompetes as an unfair method of competition regulated by the FTCA.[50] It also concluded that the MQD did not apply because it found that the FTC had previously used its statutory authority to prevent other types of unfair methods of competition in a manner like the noncompete ban and that the ban fell within the FTC’s core mandate as pronounced by Congress in the FTCA.[51] Following developments discussed below, the plaintiff in this case would voluntarily dismiss its legal challenge against the rule on October 4, 2024.[52]

• M.D. Fla.: Properties of the Villages, Inc. v. FTC On August 15, 2024, a U.S. Middle District of Florida judge granted another employer’s preliminary injunction against enforcing the noncompete ban against the employer in Villages.[53] However, unlike the Ryan LLC court, the Villages court could not conclude the FTC lacked statutory authority to issue substantive rules regulating unfair methods of competition.[54] Instead, the court viewed the various actions by Congress over the decades as seemingly suggesting it had conferred rulemaking authority on this front.[55] It echoed the ATS court’s reading of the FTCA as authorizing the FTC “to prevent unfair methods of competition, not just go after someone who already engaged in it.”[56]

Still, the Middle District of Florida concluded that by enacting the noncompete ban, the FTC violated the MQD, departing with the ATS court’s analysis of that issue.[57] In considering the MQD standards, the Villages court pointed out that the FTC estimated that there would be significant costs to employers, indicating an extraordinary economic impact.[58] The Villages court likewise observed the rule was politically significant since noncompetes had been the subject of substantial debate and regulation at the state and at the federal levels,[59] and because restrictive covenants had typically been within the domain of state rather than federal law.[60] For these reasons, the Villages court reasoned the FTC’s noncompete ban was outside its statutory authority.[61] On September 24, 2024, the FTC appealed this result to the 11th Circuit Court of Appeals.[62]

• N.D. Tex: Ryan LLC v. FTC (Part II)Subsequently, the Northern District of Texas granted Ryan LLC and the Chamber summary judgment generally echoing the legal conclusions it previously reached as to the noncompete ban with the preliminary injunction.[63] Importantly, it issued a nationwide injunction, prohibiting the noncompete ban from going into effect in September 2024 or thereafter.[64] The FTC appealed this decision to the Fifth Circuit, where the appeal currently remains pending.[65]

National Labor Relations Board Simultaneously Gets in on the Action

While the FTC issued its rulemaking, the NLRB also jumped into the fray on noncompetes.[66] Passed in the 1930s, the National Labor Relations Act (NLRA) applies to most private-sector non-supervisory employees.[67] Colloquially known as Section 7 of the NLRA, 29 U.S.C. §157, “protects employees’ rights ‘to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.’”[68] These rights are enforced through 29 U.S.C. §158 (colloquially known as Section 8 of the NLRA), which prohibits an employer from “interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of” Section 7 rights.[69] Under these statutory provisions, the NLRB has concluded that “Section 7 affords protection for employees who engage in communications with a wide range of third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the [NLRA’s] protection.”[70]

In McLaren Macomb, 372 NLRB No. 58, 2023 WL 2158775 at 1* (Feb. 21, 2023), the NLRB considered the legality of the confidentiality and non-disclosure clauses in an employer’s severance agreement offered to 11 bargaining unit employees. Responding to the COVID-19 pandemic, the employer temporarily furloughed and then permanently furloughed the 11 employees and presented each with a severance agreement, waiver, and release (the severance agreement) containing non-disclosure and confidentiality clauses “prohibiting disparagement” and “requiring confidentiality about the terms of the agreement.”[71] The employer conditioned severance payments on the employees executing the respective agreements.[72] The non-disclosure clause of the severance agreement stated, “At all times hereafter, the [e]mployee agrees not to make statements to [e]mployer’s employees or to the general public which could disparage or harm the image of [e]mployer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.”[73]

Considering these events, the NLRB concluded that the employer violated Section 8 of the NLRA by: 1) permanently furloughing the employees without notifying and giving the union an opportunity to bargain on the employees’ behalf (failure-to-bargain); 2) communicating and directly dealing with the employees, entirely bypassing and excluding the union (direct-dealing); and 3) proffering the severance agreement to the employees and conditioning severance benefits upon acceptance thereof, because the non-disclosure and confidentiality provisions interfered with, restrained, and/or coerced the employees’ exercise of Section 7 rights.[74]

In reaching this decision, the NLRB noted that it is unlawful to condition the “receipt of severance benefits on the forfeiture of statutory rights” under the NLRA, regardless of whether the employee accepts the terms of the agreement.[75] The NLRB reasoned that the broad language of the severance agreement would have the tendency to chill an employees’ rights to assist fellow employees, to cooperate with the NLRB in investigations or litigation, and to raise or assist complaints under the NLRB.[76]

Within weeks of the NLRB deciding McLaren Macomb, the NLRB’s then general counsel, Jennifer Abruzzo, prepared a memorandum to the NLRB’s regional offices directing them on how to apply the decision (GC Memo 23-05).[77] The memo extends the decision’s logic beyond the severance agreement context, suggesting that “overly broad provisions in any employer communication to employees that tend to interfere with, restrain or coerce employees’ exercise of Section 7 rights would be unlawful if not narrowly tailored to address a special circumstance justifying the impingement on workers’ rights.”[78] Moreover, Abruzzo opined that the McLaren Macomb decision applied retroactively and that maintaining such agreements with either current or former employees violated the NLRA.[79]

A few months later, Abruzzo issued another memorandum to specifically address noncompetes as potentially violating the NLRA (GC Memo 23-08).[80] Abruzzo offered five rationales for this conclusion, stating that such provisions: 1) chill employees from concerted threatening to resign to demand better working conditions; 2) chill employees from carrying out concerted threats to resign to improve working conditions; 3) chill employees from concertedly seeking or accepting new employment with a competitor to obtain better working conditions; 4) chill employees from soliciting co-workers to work for a competitor to achieve better working conditions; and 5) chill employees from seeking employment with a competitor to specifically engage in protected activities.[81]

Over a year later, on October 7, 2024, Abruzzo issued yet another memorandum (GC Memo 25-01), which built upon GC Memo 23-05 and GC Memo 23-08 by urging the NLRB “not only to find certain non-compete provisions unlawful but also, as fully as possible, to remedy the harmful effects on employees when employers use and apply them.”[82] In GC Memo 25-01, Abruzzo advocated for “make whole” remedies where employers are found to have continued to maintain unlawful non-competes because merely voiding such agreements was not enough and employees should seek compensatory relief.[83]

In GC Memo 25-01, Abruzzo also sought to include “stay-or-pay” provisions (i.e., agreements requiring employees to repay their employers for certain expenses — for example, training costs, education expenses, sign-on bonuses — if they separate from employment) within the ambit of McLaren Macomb, making them presumptively unlawful.[84] Further, Abruzzo suggested that employers would have 60 days, or until December 6, 2024, to review and “cure” existing agreements to ensure they comply with the requirements outlined in GC Memo 25-01 before issuing complaints or prosecuting unlawful stay-or-pay provisions.[85]

Federal Actions Appear to Have Been Upended with President Trump Reelected

Against this backdrop, President Donald Trump was re-elected on November 5, 2024, [86] which has and will likely continue to impact the FTC and NLRB’s efforts to invalidate restrictive covenants.

On January 20, 2025, President Trump nominated Andrew Ferguson as the FTC’s chair.[87] Ferguson was a vocal critic of the FTC’s noncompete ban, concluding the ban was unlawful.[88] Based on these actions, this author initially believed the FTC would seek to dismiss its appeals, before seeking rulemaking to withdraw the noncompete ban, but a recent news report suggests otherwise.[89] On February 24, 2025, a news report suggested that Ferguson had stated the FTC would be creating a task force to investigate corporate behavior affecting workers, including particularly reviewing noncompetes along with no-hire and no-poach contracts.[90] Ferguson was quoted as stating that the FTC would be “on the lookout for noncompetes that violate the antitrust laws, and we’re going to do something about them.”[91]

Since taking office, President Trump has removed two NLRB officials.[92] On January 27, 2025, President Trump dismissed Jennifer Abruzzo, leaving Deputy General Counsel Jessica Rutter to serve as acting general counsel, which some believe was expected as it followed a similar move by President Biden who dismissed the prior NLRB general counsel upon taking office in 2020.[93]

The same day, in an unprecedented move, President Trump sought to remove a sitting Democrat appointed board member, Gwynne Wilcox.[94] Based on this step, the NLRB lacks a quorum to hear challenges or reverse any prior precedent, such as McLaren Macomb.[95] While further changes to NLRB precedent are expected, they are on hold until new NLRB board members are appointed and confirmed. Until then, McLaren Macomb remains binding precedent at the NLRB.[96]

That was not the end of President Trump’s changes at the NLRB. On February 1, 2025, President Trump dismissed Rutter[97] and replaced her by appointing acting General Counsel William Cowen, who had served as the regional director for the NLRB’s Los Angeles Regional Office since 2016 and previously served as an NLRB Board member in 2002 under President George W. Bush.[98]

While the NLRB itself could not overrule McLaren Macomb, the acting general counsel could withdraw the prior guidance memorandum on this topic. In fact, that is exactly what happened. On February 14, 2024, Cowen issued a memorandum rescinding numerous prior NLRB general counsel memorandum, including the previously discussed GC Memo 23-05, GC Memo 23-08, and GC Memo 25-01.[99] As such, the extended interpretations that Abruzzo provided are no longer, leaving only McLaren Macomb’s specific holding in place.

Less Traction on the Florida Front

There have been limited legislative amendments to F.S. §542.335 since 1996. The most recent Florida legislative actions have focused on restrictive covenants involving physicians; specifically in 2019, the Florida Legislature added F.S. §542.336 to prohibit certain types of restrictive covenants for physicians.[100] Section 542.336 prevents restrictive covenants between physicians who practice in a medical specialty and are employed by an entity that employs or contracts with all physicians who practice in that same specialty within the same county.[101]

Various members of the Florida Legislature have proposed bills to amend §542.335 several times over the last few years — albeit, as discussed below, the efforts have not proved fruitful. For instance, in 2022, the Florida House and Senate filed bills completely prohibiting noncompete agreements; however, the House bill died in subcommittee, and the Senate bill died in the judiciary.[102]

Still, a recuring topic with the Florida Legislature is how restrictive covenants apply to physicians,[103] which was re-introduced again in the 2024 regular legislative session.[104] During that session, two main bills were proposed in the House and Senate, respectively. In the Florida House, Reps. Joel Rudman, M.D. (R-District 3) and Alina Garcia (R-District 115) proposed H.B. 11, which would declare all restrictive covenants involving physicians as lacking any legitimate business interests, making them void and unenforceable.[105] At the same time in the Florida Senate, Sen. Jason Brodeur (R-District 10) proposed a similar amendment to F.S. §542.336, but with certain exceptions and which would apply prospectively after enactment.[106] The proposed Senate bill provides for exceptions, declaring that there would be legitimate business interests supporting noncompete agreements with physicians when restrictive covenants involve 1) restrictions on research conducted so long as the physician can still provide continuing patient care; 2) a physician making $250,000 or more per year; or 3) the sale of goodwill, ownership interests, or assets of such business by physicians with ownership interests in a medical business, management services organization, practice, or entity.[107] Neither bill passed. The Florida House bill never left committee, and the Senate bill languished with the Senate Rules Committee.[108]

As of February 2025, at least four bills addressing restrictive covenants had been filed for consideration by the Florida Legislature in the 2025 regular legislative session.[109] Rep. Kelly Skidmore (D-District 92) submitted H.B. 485, which once again sought to address restrictive covenants for physicians.[110] A companion bill, S.B. 942, was filed in the Florida Senate by Sen. Colleen Burton (R-District 12).[111] Somewhat like the proposed 2024 legislation, these companion bill proposals would invalidate all restrictive covenants that prohibit physicians from practicing medicine within any geographic area for any period after the termination of a contract, partnership, employment relationship, or professional relationship, making such restrictive covenants void and unenforceable.[112]

More substantially, Sen. Thomas Leek (R-District 7) filed S.B. 922 — with a companion bill filed in the House by Rep. Traci Koster (R-District 66), H.B. 1219, that would create a new type of restrictive covenant protected by Florida law.[113] This proposal would create the Florida Trade Secret Protection Act[114] that seeks to create a “garden leave agreement” for “covered employees,” which is defined by the bills as an employee or contractor “who earns or is reasonably expected to earn a salary greater than twice the annual mean wage, or who has access to his or her employer’s or client’s confidential information or customer relationships.”[115]

Under the proposed garden leave agreement statute, employees could agree to not resign before the end of a notice period, which could be up to, but no more than, four years.[116] In turn, under a valid garden leave agreement, employers would be required to continue to pay the employee’s salary and benefits through the notice period.[117] In other words, the employers that enter a valid garden leave agreement with an employee could relieve the employee of duties and responsibilities during the notice period, effectively placing them on a paid leave through the notice period.[118] This legislation would also seek to modify noncompetes by allowing them to last up to four years but would be reduced day-for-day for any nonworking portions of a garden leave agreement period.[119] It is unclear whether any of the 2025 legislative proposals will become law.

All Sound and Fury Signifying Nothing?

In “The Scottish Play,” the main character, Macbeth, provides a soliloquy upon learning of his wife’s death in which he describes life as “a tale [that is] full of sound and fury, [s]ignifying nothing.”[120] With the election of President Trump and the seeming success of legal challenges, one wonders whether the efforts by the FTC and the NLRB to eviscerate noncompetes at the federal level were much sturm und drang that amounted to nothing. Thus, to the extent opponents of noncompetes seek to address their use in the modern economy, efforts may prove more fruitful at the state level.

[1] See Fla. Stat. §542.335 (2024); see also “Covenant,” Black’s Law Dictionary (12th ed. 2024).

[2] See Fla. Stat. §542.335; see also Marsh USA Inc. v. Cook, 354 S.W. 3d 764, 771 (Tex. 2011) (observing that Texas courts have enforced restrictive covenants since 1899 to the extent they do not violate public policy); Team Environmental Services, Inc. v. Addison, 2 F.3d 124, 126 (5th Cir. 1993) (discussing enforceability of noncompetes under Louisiana law).

[3] See Non-Compete Clause Rule, 89 Fed. Reg. 38342-01, *38472-3 (May 7, 2024) (hereinafter Non-Compete Clause Rule 2) (citing Cal. Bus. & Prof. Code §16600; N.D. Cent. Code §9-08-06; Okla. Stat. Ann. tit. 15, §219A; Minn. Stat. Ann. §181.988).

[4] See Non-Compete Clause Rule 2, at *38465 (citing Beck Reed Riden LLP, Employee Noncompetes: A State-by-State Survey (Feb. 19, 2024), available at https://beckreedriden.com/wp-content/uploads/2024/02/BRR-Noncompetes-20240219-50-State-Noncompete-Survey-Chart.pdf).

[5] See Love v. Miami Laundry Co., 160 So. 32 (Fla. 1935) (refusing to enjoin former employees); see also Ronner, Amy D., Healers Barred from Healing: Physician Noncompete Agreements (“Healers Barred”), 92 Fla. B. J. 18 (Mar. 2018).

[6] See Capelouto v. Orkin Exterminating Co. of Fla., 183 So. 2d 532, 534 (Fla. 1966); Miller Mech., Inc. v. Ruth, 300 So. 2d 11, 12 (Fla. 1974).

[7] See John A. Grant, Jr. & Thomas T. Steele, Restrictive Covenants: Florida Returns to the Original “Unfair Competition” Approach for the 21st Century, 70 Fla. B. J. 53, 53 (Nov. 1996).

[8] Fla. Stat. §542.335(1)(b).

[9] Id.

[10] Id.

[11] See Fla. Stat. §542.335(1).

[12] See Fla. Stat. §542.335(1)(d), (e).

[13] Fla. Stat. §542.335(1)(d)(1).

[14] See Fla. Stat. §42.335(1)(d)(3).

[15] 15 U.S.C. §41.

[16] See 15 U.S.C. §45(a)(2).

[17] Id.

[18] See 15 U.S.C. §46(g).

[19] See Non-Compete Clause Rule 2 at *38343-44,

[20] See Promoting Competition in the American Economy, Exec. Order No. 14036, 86 Fed. Reg. 36987 (July 9, 2021).

[21] See Non-Compete Clause Rule 2 at *38343-44.

[22] Non-Compete Clause Rule, 88 Fed. Reg. 3482-01, *3483 (Jan. 19, 2023).

[23] See Federal Trade Commission, FTC Announces Rule Banning Noncompetes, (Apr. 23, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes. In issuing the ban, the FTC estimated that the average worker would earn an additional $524 each year. Id. The FTC also estimated that the noncompete ban would lead to a 2.7% increase in new business formation each year, or greater than 8,500 additional new businesses created each year. Id. Moreover, the FTC expected that during the next decade after the ban’s enactment, the noncompete ban would lower health care costs by up to $194 billion. Id. Beyond that, the FTC noted that the final rule was expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule. Id.

[24] 16 C.F.R. §910.1.

[25] Id.

[26] Non-Compete Clause Rule 2 at *38363-65.

[27] See id.

[28] 16 C.F.R. §910.2(a)-(b).

[29] See 16 C.F.R. §910.3(a).

[30] See 16 C.F.R. §910.2(b).

[31] See 16 C.F.R. §910.4(a).

[32] See Ryan LLC v. Federal Trade Commission, 739 F. Supp. 3d 496, 507 (N.D. Tex. 2024).

[33] The U.S. Chamber of Commerce and several other entity trade groups sued the FTC to challenge the noncompete ban; however, Ryan LLC was the first to file and the business trade group’s case was stayed. See Chamber of Commerce v. FTC, 732 F. Supp. 3d 674, 684 (E.D. Tex. 2024). Because of that, the business trade groups intervened. Ryan LLC, 739 F. Supp. 3d at 507.

[34] Id. at 509.

[35] Id.

[36] Id.

[37] Id.

[38] Id. at 514, 516.

[39] Id. at 521-22.

[40] See id.

[41] Id. at 503, 522.

[42] See ATS Tree Services, LLC v. Federal Trade Commission, No. 24-1743, 2024 WL 3511630 (E.D. Penn. July 23, 2024).

[43] Id. at *19.

[44] See id. at **12-19.

[45] See West Virginia v. Environmental Protection Agency, 597 U.S. 697, 732 (2022) (quoting Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324 (2014)).

[46] West Virginia, 597 U.S. at 700 (citations omitted).

[47] Id. at 743-746.

[48] Id. at 746.

[49] See id. at 746-748.

[50] ATS Tree, 2024 WL 3511630, at *17.

[51] Id. at *18.

[52] See Notice of Voluntary Dismissal by All Plaintiffs, ATS Tree, E.D. Pa. Docket 2:24CV01743, Docket Entry No. 92.

[53] See Villages, 2024 WL 3870380 at *1.

[54] Id. at *5.

[55] Id.

[56] Id. (internal citations omitted).

[57] Id. at **6-9.

[58] Id. at *7 (noting that the FTC estimated employers will pay between $400 and $488 billion more dollars over 10 years under the noncompete ban).

[59] See id. at **7-8.

[60] See id.

[61] Id. at *9.

[62] See FTC v. Properties of the Villages, Inc., 5:24-cv-00316-TJC-PRL (M.D. Fla. 2024), appeal docketed, No. 24-13102 (11th Cir. Sept. 24, 2024).

[63] Ryan LLC v. FTC, — F. Supp. 3d —-, 2024 WL 3879954, at **8-14 (N.D. Tex., Aug. 20, 2024).

[64] Id. at *14.

[65] See FTC v. Ryan LLC, 3:24-CV-986 (N.D. Tex. 2024), appeal docketed, No. 24-10951 (5th Cir. Oct. 18, 2024).

[66] See McLaren Macomb, 372 NLRB No. 58, 2023 WL 2158775, at *1 (overruling Baylor University Medical Center, 369 NLRB No. 43, 2020 WL 1250208 (Mar. 16, 2020) and IGT d/b/a International Game Technology, 370 NLRB No. 50, 2020 WL 6940902 (Nov. 24, 2020)); see also NLRB v. McLaren Macomb, 2024 WL 4240545, at *7 (6th Cir. Sept. 19, 2024) (per curiam) (enforcing board’s finding that employer violated the National Labor Relations Act (NLRA), even under prior precedent of Baylor and IGT).

[67] 29 U.S.C. §152(3) (defining the term “employee” under the NLRA).

[68] Glacier Northwest, Inc. v. International Brotherhood of Teamsters Local Union No. 174, 598 U.S. 771, 775 (2023) (quoting 29 U.S.C. §157).

[69] 29 U.S.C. §158(a)(1).

[70] McLaren Macomb, 372 NLRB No. 58, 2023 WL 2158775, at *7 (Feb. 21, 2023).

[71] Id. at **1-2.

[72] Id.

[73] Id. at *2.

[74] Id. at *2, *9.

[75] Id. at *9.

[76] Id. at *10. The employer appealed to the Sixth Circuit, which declined to address the NLRB’s conclusions on the confidentiality or non-disclosure clauses but upheld the NLRB’s decision based on its findings that the employer violated the NLRA by “fail[ing] to bargain with the [u]nion over its employees’ permanent furloughs,” and “directly deal[ing] with the furloughed employees.” NLRB v. McLaren Macomb, No. 23-1335, 2024 WL 4240545, at *7 (6th Cir. Sept. 19, 2024).

[77] N.L.R.B. Gen. Couns. Memo. 23-05, Guidance in Response to Inquiries About the McLaren Macomb Decision (Mar. 22, 2023).

[78] Id.

[79] Id.

[80] N.L.R.B. Gen. Couns. Memo. 23-08, Non-Compete Agreements that Violate the National Labor Relations Act (May 30, 2023).

[81] Id.

[82] N.L.R.B. Gen. Couns. Memo. 25-01, Remedying the Harmful Effects of Non-Compete and “Stay-or-Pay” Provisions that Violate the National Labor Relations Act (Oct. 7, 2024).

[83] Id. In GC Memo 25-01, General Counsel Abruzzo details several methods by which an employee may demonstrate entitlement to make-whole relief. Id. By way of example, Abruzzo suggested that one way an employee may demonstrate entitlement to make-whole relief is by simply showing “that there was a position available during their job search for which they were qualified but that they were discouraged from applying or accepting the position as a result of the non-compete provision.” Id.

[84] Id.

[85] See id.

[86] See Steve Holland, Nandita Bose, Stephanie Kelly & Joseph Ax, Donald Trump Elected U.S. President in Stunning Comeback, Reuters, Nov. 6, 2024, https://www.reuters.com/world/us/trump-vs-harris-us-voters-head-polls-turbulent-campaign-concludes-2024-11-05/.

[87] See FTC, Andrew N. Ferguson Takes Over as FTC Chairman (Jan. 22, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/01/andrew-n-ferguson-takes-over-ftc-chairman.

[88] See FTC, Dissenting Statement of Commissioner Andrew N. Ferguson, (June 28, 2024), available at https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-noncompete-dissent.pdf; see also Paul Mulholland, Non-Compete Agreement Ban is All but Dead Under Trump, PSCA, Jan. 28, 2025, https://www.psca.org/news/psca-news/2025/1/non-compete-agreement-ban-is-all-but-dead-under-trump/.

[89] See Justin Wise, Trump FTC Launching Task Force Focused on Corporate Labor Harms, Bloomberg Law, Feb. 24, 2025, https://news.bloomberglaw.com/antitrust/trump-ftc-launching-task-force-focused-on-corporate-labor-harms.

[90] See id.

[91] Id.

[92] See Daniel Wissner, Trump Paralyzes U.S. Labor Board by Firing Democratic Member, Reuters, Jan. 28, 2025, https://www.reuters.com/world/us/trump-fires-us-labor-board-member-hobbling-agency-amid-legal-battles-2025-01-28.

[93] See Josh Eidelson, Trump Ousts NLRB Leaders Who Pushed Broader Worker Rights (2), Bloomberg Law, Jan. 28, 2025, https://news.bloomberglaw.com/daily-labor-report/trump-ousts-labor-prosecutor-who-pushed-broader-worker-rights; see also NLRB, Statement from Departing NLRB General Counsel Jennifer Abruzzo, Jan. 28, 2025, https://www.nlrb.gov/news-outreach/news-story/statement-from-departing-nlrb-general-counsel-jennifer-abruzzo.

[94] Robert Iafolla, Trump Stymies Labor Board by Firing Democrat Gwynne Wilcox (2), Bloomberg Law, Jan. 28, 2025, https://news.bloomberglaw.com/daily-labor-report/trump-terminates-one-labor-board-democrat-leaving-two-members.

[95] See New Process Steel v. NLRB, 560 U.S. 674, 686-687 (2010) (concluding that NLRB must have at least three members to have a legal quorum to review and decide cases).

[96] See id.

[97] Parker Purifoy & Robert Iafolla, Trump Fires Labor Board Acting General Counsel Jessica Rutter, Bloomberg Law, Feb. 1, 2025, https://news.bloomberglaw.com/daily-labor-report/trump-fires-labor-board-acting-general-counsel-jessica-rutter.

[98] See NLRB, President Trump Appoints William B. Cowen Acting General Counsel of the National Labor Relations Board (Feb. 3, 2025), https://www.nlrb.gov/news-outreach/news-story/president-trump-appoints-william-b-cowen-acting-general-counsel-of-the.

[99] N.L.R.B. Gen. Couns. Memo. 25-05, Rescission of Certain General Counsel Memorandum (Feb. 14, 2025).

[100] Fla. Stat. §542.336 (2019).

[101] Id.

[102] See Fla. H.B. 1191 (2022) (filed Jan. 5, 2022), available at https://www.flsenate.gov/Session/Bill/2022/1191/BillText/Filed/PDF (proposing the addition of the following language, amongst other additions, to Fla. Stat. §542.335(3) “(a) A restrictive covenant is only enforceable against a former employee, agent, or independent contractor who voluntarily resigns or is terminated because of misconduct.”); Fla. S.B. 1618 (2022) (amended Jan. 24, 2022), available at https://www.flsenate.gov/Session/Bill/2022/1618/BillText/c1/PDF (proposing the addition of the following language, amongst other additions, to Fla. Stat. §542. 225(a) (“(a) A restrictive covenant is only enforceable against a former employee, agent, or independent contractor who voluntarily resigns, is terminated for misconduct, or does not satisfy reasonable performance standards or goals which were set in advance.”)).

[103] See, e.g., Fla. S.B. 842 (2022) (filed Nov. 5, 2021) available at https://www.flsenate.gov/Session/Bill/2022/1191/BillText/Filed/PDF; Fla. H.B 1449 (2022) (filed Jan. 10, 2022), available at https://www.flsenate.gov/Session/Bill/2022/1449/BillText/Filed/PDF (amending Fla. Stat. §542.336 to include an additional provision that “[a] restrictive covenant in an employment agreement between a physician and a hospital is not supported by a legitimate business interest if it does not include an option for the physician to buy out of the restrictive covenant at a reasonable price”).

[104] See Fla. H.B. 11 (2024) (filed Aug. 21, 2023), available at https://www.flsenate.gov/Session/Bill/2024/11/BillText/Filed/PDF; Fla. S.B. 458 (2024), available at https://www.flsenate.gov/Session/Bill/2024/458/BillText/Filed/PDF.

[105] See Fla. H.B. 11 (2024); see also The Florida Senate, HB 11: Invalid Restrictive Covenants with Physicians, https://www.flsenate.gov/Session/Bill/2024/11/?Tab=RelatedBills.

[106] See Fla. S. 458 (2024) (amended Feb. 7, 2025), available at https://www.flsenate.gov/Session/Bill/2024/458/BillText/c2/PDF.

[107] Id.

[108] See Fla. H.B. 11 (2024), available at https://www.flsenate.gov/Session/Bill/2024/11/?Tab=BillHistory; see also Fla. S.B. 458 (2024), available at https://www.flsenate.gov/Session/Bill/2024/458/?Tab=BillHistory.

[109] See Florida Senate 2025 Session Bill Search (searching for the term “restrictive covenant”), https://www.flsenate.gov/Session/Bills/2025?chamber=both&searchOnlyCurrentVersion=True&isIncludeAmendments=False&isFirstReference=True&searchQuery=restrictive%20covenant&citationType=FL%20Statutes&pageNumber=1.

[110] Fla. H.B. 485 (2025) (filed on Feb. 7, 2025), available at https://www.flsenate.gov/Session/Bill/2025/485/BillText/Filed/PDF.

[111] Fla. S.B. 485 (2025) (filed on Feb. 7, 2025), available at https://www.flsenate.gov/Session/Bill/2025/485/BillText/Filed/PDF.

[112] See Fla. H.B. 485 (2025); see also Fla. H.B. 11 (2024).

[113] Fla. S.B. 922 (2025) (filed on Feb. 19, 2025), available at https://www.flsenate.gov/Session/Bill/2025/922/BillText/Filed/PDF; see also Fla. H.B. 1219 (2025) (filed on Feb. 26, 2025) available at https://www.flsenate.gov/Session/Bill/2025/1219/BillText/Filed/PDF.

[114] Fla. H.B. 1219 (2025); Fla. S.B. 922 (2025) (creating Fla. Stat. §§542.41-542-45).

[115] Fla. H.B. 1219 (2025); Fla. S.B. 922 (2025) (Fla. Stat. §542.43(3), (5)).

[116] Fla. H.B. 1219 (2025); Fla. S.B. 922 (2025) (Fla. Stat. §§542.43(5), 542.44(2)).

[117] See id.

[118] Peter A. Steinmeyer and Lauri F. Rasnick, Garden Leave Provisions in Employment Agreements (Oct. 2020), available at https://www.ebglaw.com/assets/htmldocuments/uploads/2021/07/Steinmeyer-Rasnick-October-2020-Garden-Leave-Provisions-in-Employment-Agreements-w-007-3506.pdf.

[119] Fla. H.B. 1219 (2025); Fla. S.B. 922 (2025) (Fla. Stat. §542.45).

[120] The full line is, “It is a tale [t]old by an idiot, full of sound and fury, [s]ignifying nothing.” William Shakespeare, Macbeth, Act V, Scene V. However, the author did not wish to suggest ill will to the agencies in their actions, hence the alteration.

John Getty is of counsel in the Tampa office of Ogletree Deakins. He represents clients on restrictive covenant and unfair trade practices litigation and advises employers on labor matters along with transactional work. Getty works in both Tampa and Sarasota, serving on the Sarasota County Bar Association’s Board of Directors.

This column is submitted on behalf of the Labor and Employment Law Section, Yvette D. Everhart, chair, and Alicia Koepke, editor.


Labor and Employment Law