On Friday, the Federal Trade Commission abandoned its defense of the nationwide non-compete ban that it enacted last year. Although the ban rested on solid legal ground—the FTC’s Section 5 authority clearly encompasses unfair methods of competition that trap workers in jobs—the agency’s new leadership has decided to retreat.
This decision is a major setback in the struggle for worker mobility. Consider the nurse who couldn’t take a better paying position at a rural hospital because her non-compete made her “forcibly unemployed.” Or the dog groomer who paid $5,500 for what PetSmart called “free” training, only to be hounded by a debt collector for repayment after she left before reaching two years on the job. These workers represent millions trapped by contractual restrictions that prevent them from seeking better opportunities, a fundamental violation of economic freedom in what’s supposed to be a free market economy.
FTC Chair Andrew Ferguson claims that the Commission can more effectively protect worker mobility through individual enforcement actions and has asked the public to report employers that use non-competes. But such one-off actions won’t be nearly as effective as the blanket ban because they’ll require litigation and, more importantly, won’t clearly signal to thirty million workers that their non-competes are void.
While there is no sugar-coating this development, there is a silver-lining: states are now filling the void with remarkable creativity, both enacting new legislation and pulling from their own existing cache of competition and consumer laws. This state-led movement isn’t merely compensatory—it’s transformative. From Wyoming’s new statutory limitations on non-competes to Colorado’s prosecution of training debt schemes that lock workers into bad jobs, we’re witnessing a reconceptualization of how worker mobility gets protected. These states are advocating for workers by embracing free markets—in the case of Wyoming—and consumer protection—in the case of Colorado. If the private bar, public agencies, and unions vigorously enforce these laws, workers will surely enjoy greater bargaining power.
The State Laboratory
In 2025 alone, nine new laws have been enacted that target non-competes, with dozens more introduced across over half of the states. Four states now maintain fairly robust bans (California, Minnesota, North Dakota, and Oklahoma), and several other states (Colorado, Oregon, Washington, Rhode Island, Maryland, Maine, New Hampshire, and Illinois) ban non-competes for workers below certain income thresholds. Nevada prohibits them for hourly workers. Virginia recently expanded its ban to all FLSA non-exempt employees. Oregon requires employers to pay departing employees during restricted periods—so called “garden leave.” And thirty-two states now restrict non-competes for healthcare workers specifically, responding to physician and nurse shortages and rural access concerns.
With respect to Training Repayment Agreement Provisions (TRAPs), which are often used as workarounds to traditional non-competes, movement is accelerating. California and New York are the latest states on the cusp of banning them. Connecticut has long banned TRAPs for all workers, and Indiana and California have banned them for health care workers. Meanwhile, Nevada, Ohio, Vermont, Washington, Massachusetts, and Minnesota have all introduced statutory limitations on TRAPs and other “stay-or-pay” contracts.
While not all movement has been forward—Florida recently made it easier to enforce non-competes—the issue has transcended partisan divides. In Wyoming, Republican Senator Tara Nethercott championed statutory restrictions by arguing that non-competes are “antithetical to Wyoming’s free market values.” This framing, which presents worker mobility as market efficiency rather than labor protection, proves effective across ideological lines and even speaks to libertarian arguments for “the right to earn a living.” When rural hospitals can’t recruit nurses, when small businesses can’t hire skilled workers, and when entrepreneurs can’t leave to start competing ventures, these become economic development issues that resonate beyond traditional labor constituencies.
Consumer and Antitrust Law as Worker Protection
Several recent multi-state enforcement actions demonstrate how existing consumer and antitrust laws can also be enforced to promote worker mobility. For example, when seven attorneys general secured $3.5 million from Valvoline for imposing non-competes on hourly workers, they used state UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) statutes. This approach recognizes what I’ve termed the “worker-consumer” framework: when employers sell workers training services or financial products, the workers become consumers entitled to protection. One advantage of this approach is that it offers workers access to more safeguards than employment law alone. For instance, the Colorado attorney general’s lawsuit against PetSmart for its TRAPs seeks $50,000 per violation under consumer fraud theories, far exceeding typical employment law penalties.
Antitrust law provides another avenue. The FTC’s non-compete ban, which relied on its “unfair methods of competition” (UMC) authority, reflects antitrust law’s potential to address worker mobility restrictions. This approach recognizes that non-competes restrict competition for workers just as effectively as price-fixing restricts competition for customers.
Antitrust offers some advantages over employment law. For example, the Sherman Act applies to all workers regardless of classification—independent contractors receive the same protection as formal employees. Indeed, in recent years, private plaintiffs have started bringing Sherman Act claims against non-competes, arguing they illegally maintain employer market power. Courts have found these theories plausible, particularly where employers dominate local labor markets.
Yet antitrust has limitations. Its focus on consumer welfare and economic efficiency doesn’t always align with worker protection. Antitrust law aims to perfect competition, not necessarily enhance worker welfare. These are goals that can occasionally conflict. When hospitals merge to achieve efficiencies, antitrust might approve combinations that reduce worker bargaining power. Or a union that negotiates a neutrality agreement with merging companies—thus augmenting the workers’ bargaining power—may find the merger blocked by competition authorities. And proving anticompetitive effects requires economic analysis beyond most workers’ resources. Still, antitrust provides a powerful tool for challenging mobility restrictions, particularly when combined with consumer protection and employment and labor law approaches.
Likewise, consumer law’s framing of workers as consumers of jobs rather than as producers of labor may prove inadequate against structural power imbalances in work. Still, given how heavily the legal deck is stacked against workers, deploying every available tool makes strategic sense. In other words, advocates can apply a combination of approaches, in addition to traditional employment and labor laws, to rein in workplace abuses.
Drawing the Federal Blueprint
Current state experimentation provides crucial groundwork for eventual federal action. Different approaches—comprehensive bans, income thresholds, sector-specific restrictions—generate evidence about what works. State attorneys general develop expertise and precedents that federal enforcers can later adopt. Even municipal actions can have important effects, such as New York City mayoral candidate Zohran Mamdani’s pledge to ban non-competes for all workers, regardless of their status as formal employees or independent contractors.
Similarly, multi-state enforcement actions demonstrate the inefficiency of patchwork regulation, building support for federal uniformity. For instance, the recent HCA Healthcare settlement—$2.9 million across three states for the company’s use of TRAPs—shows how coordinated state action creates pressure for nationwide policy changes.
When political conditions shift, this state-level infrastructure could enable rapid federal action. A future FTC could justify a quick resuscitation of its non-compete ban using evidence from state experiences, especially because the current FTC did not follow the Administrative Procedure Act’s requirement of notice and comment before abandoning its defense of the ban. Congress could codify successful state approaches, as it recently did by banning forced arbitration of sexual harassment claims. The Department of Justice could expand antitrust enforcement against mobility restrictions based on state attorney general victories. And a revived Consumer Financial Protection Bureau could enforce the Dodd-Frank Act on behalf of worker-consumers by picking up on state consumer protection agencies’ actions.
The FTC’s retreat may have closed one door, but states are kicking open dozens of others. And when federal opportunity returns, states will have provided the blueprint.
