FTC Scraps Non-Compete Ban: Courts Force Rule Reversal Frenzy
Published Date: 2/12/2026
Rule
Summary
The FTC is rolling back some recent rules after courts said so. They’re restoring the old Negative Option Rule, canceling the CARS Rule about car sales, and removing the Non-Compete Rule. These changes take effect February 12, 2026, and affect businesses and consumers dealing with subscriptions, car buying, and job contracts.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 0 costs, 3 mixed.
Non-Compete Rule Removed from CFR
The FTC removed the Non-Compete Clause Rule from the Code of Federal Regulations effective February 12, 2026. The May 7, 2024 rule had treated entering non-competes with workers on or after September 4, 2024 as an unfair method of competition and had different rules for existing non-competes involving senior executives versus other workers; that rule is now removed from the CFR.
Subscription (Negative Option) Rule Restored
The FTC restored the earlier Negative Option Rule effective February 12, 2026, recodifying the pre-2024 text titled "Use of Prenotification Negative Option Plans." The restored rule requires sellers using negative-option subscription plans to give subscribers at least ten (10) days to mail a refusal form and to mail announcements at least 20 days before a return date (or 15 days before a mailing date), and to ship introductory items within 4 weeks, among other specified practices.
CARS Rule Withdrawn — Car Sale Rules Removed
The FTC withdrew the CARS Rule effective February 12, 2026, removing the January 4, 2024 rule that had prohibited certain dealer misrepresentations, required accurate pricing disclosures and express informed consent for charges, barred sale of add-ons that confer no consumer benefit, and required recordkeeping. Dealers and car buyers dealing with advertising, add-ons, and financing are affected by this withdrawal.
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