On August 13, 2025, President Trump issued an executive order revoking former President Biden’s July 9, 2021 Executive Order 14036 “Promoting Competition in the American Economy” (the “Biden Order”).
Comprised of 14 pages of exposition, mission-setting, and agency directives, the Biden Order affirmed that administration’s aim to “enforce the antitrust laws to combat excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony—especially as these issues arise in labor markets, agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity[.]” The Biden Order set out a “Whole-of-Government competition Policy” that directed federal agencies, such as the Federal Trade Commission (“FTC”), to adopt pro-competitive regulations and rescind regulations that “create unnecessary barriers to entry that stifle competition,” including narrowing or eliminating the scope of enforceable restrictive covenants.
In three succinct paragraphs, President Trump’s August 13, 2025 executive order (the “Trump Order”) signals a shift in federal policy from the Biden Administration to deregulate restrictive covenants and promote robust protections of the legitimate business interests of employers. The FTC is still defending several ongoing legal battles regarding the legality of its 2024 near-total ban on noncompetes in several different federal courts, which we have previously discussed. The legal disputes have been on hold since the spring, seemingly awaiting direction from the President regarding his Administration’s vision for regulating competition in the employment marketplace. The FTC’s current Chair, Andrew N. Ferguson, took office just two days after President Trump’s second inauguration. While an FTC Commissioner in 2024, Chair Ferguson strongly disagreed with the 2024 non-compete ban. His promotion to Chair, coupled with the Trump Order, likely sounds the death knell for the FTC’s 2024 noncompete ban.
Though the Trump Order sets a tone for a potential unified federal policy against stronger regulations for restrictive covenants such as noncompetes and, in particular the FTC’s 2024 noncompete ban, it is in direct contrast with a wave of state-level legislation seeking to enact additional restrictions on noncompetes generally, and in different sectors, in the wake of legal challenges to a federal approach.
The current lack of federal regulation of noncompetes confirms that employers must remain diligent in complying with the patchwork of various state laws addressing noncompetes. With a flurry of new noncompete laws at the state level, along with many states prohibiting choice-of-law clauses to get around a particular state’s noncompete law, a one-size-fits-all approach to noncompetes is no longer advisable. Employers with employees located in multiple states are encouraged to review their restrictive covenant agreements to ensure compliance with state law.
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