The U.S. Federal Trade Commission (FTC)’s attempt to ban non-compete agreements nationwide has not made it off the launchpad. Following the FTC’s dismissal of its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC, non-compete agreements remain governed under a patchwork of state laws. This is notable for the space industry, where a limited pool of highly specialized talent makes non-compete agreements common.
In 2024, the FTC proposed a Non-Compete Rule that would have banned post-employment non-compete agreements for most workers. In Ryan, LLC, however, the Northern District of Texas vacated the rule on a nationwide basis, holding that the FTC lacked substantive rulemaking authority under Section 6(g) of the FTC Act and that the rule was “arbitrary” and “capricious” under the Administrative Procedure Act. The FTC initially appealed the decision to the Fifth Circuit but eventually declined to pursue further appellate challenge.
Accordingly, employers may continue to use non-compete agreements subject to the various state laws that govern enforceability, creating a complex patchwork for a space industry workforce that routinely crosses state lines.
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