The big picture: The Federal Trade Commission (FTC) has formally abandoned its proposed nationwide non-compete ban, opting instead for a strategy of targeted, case-by-case enforcement. This decision ends a significant legal battle over the broad prohibition.

Why it matters: This shift means businesses, particularly staffing firms, must proactively review their non-compete agreements for compliance to avoid individual enforcement actions and potential legal challenges.

Between the lines:

• The FTC voted 3-1 to dismiss its appeals, letting stand an August 2024 court decision that stalled the ban.
• State laws will continue to govern non-compete agreements, but the FTC retains authority to investigate unreasonable or anticompetitive clauses.
• The FTC's first action under this new approach targeted Gateway Services, Inc. for blanket, overbroad non-competes applied to low-wage workers.

Staffing & HR impact: Staffing firms must audit existing non-compete clauses, especially for low-wage or non-specialized roles, to mitigate compliance risks and ensure recruiter mobility isn't unduly restricted. Misuse could lead to significant penalties and operational disruption.

The bottom line: The threat of non-compete enforcement is now localized and specific, requiring continuous vigilance from employers.