Hey friend,

Remember when we thought non-compete agreements were going away? That beautiful moment in April 2024 when the FTC announced they'd ban nearly all non-competes nationwide? Yeah, that didn't age well.

On September 5, 2025, the FTC officially dropped its appeal and walked away from the nationwide non-compete ban. The agency voted 3-1 to withdraw, effectively killing the rule before it ever took effect. And now? You're navigating a patchwork of 50 different state laws while companies simultaneously pivot to a new weapon: Training Repayment Agreement Provisions, or TRAPs.

If you just got laid off and you're staring at a non-compete clause wondering if you can take that perfect job offer, or if your former employer is demanding $5,000 for the "training" you received during your two-month stint, this one's for you.

Meet Sarah (not her real name), a healthcare IT professional who found herself trapped after her October 2025 layoff from a major tech company. Here's what she tried:

✔️ Applied to a competitor offering 30% more salary
✔️ Got the verbal offer
✔️ Reviewed her employment contract (oops—found the 12-month, statewide non-compete)
✔️ Consulted a lawyer who said her state still enforces non-competes even for laid-off workers
✔️ Tried to negotiate with her former employer to waive it
✔️ Hit a wall when HR said "policy is policy"

The job offer was rescinded. The competitor didn't want legal trouble. Sarah's been unemployed for three months now, watching her savings evaporate while her non-compete clock runs down. And here's the brutal part: she wasn't even fired for cause. She was laid off during a routine "workforce optimization."

Her story isn't unique. Since the FTC ban died, laid-off workers across the country are discovering that the companies that just eliminated their jobs still claim ownership over where they can work next.

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The FTC's Retreat
The agency withdrew its appeal on September 5, 2025 (APTA, October 8, 2025), but on the same day filed an enforcement action against Gateway Services for restricting 1,800 workers. The message: case-by-case enforcement only, not blanket worker protection (PSCA, September 9, 2025).

The State-by-State Mess
Workers now face 50 different state laws (The HR Digest, November 2025):

The TRAP Explosion
Nearly 1 in 12 U.S. workers now face agreements to repay $3,000-$10,000+ for routine training (Protect Borrowers, October 13, 2025). Hardest hit: healthcare, aviation, trucking, retail, tech. PetSmart forced grooming workers into $5,000 TRAPs for training they advertised as "free."

The 2025 State Rebellion
Two major states fought back:

California AB 692 (signed October 13, 2025): Bans most TRAPs effective January 1, 2026. Narrow exceptions only for legitimate educational credentials.

New York Trapped at Work Act (signed December 19, 2025, effective immediately): Deems training repayment agreements "unconscionable." Violators face $1,000-$5,000 per worker.

1. Know Your State's Rules (10 minutes)
Check if your state bans non-competes entirely, voids them for laid-off workers, or enforces them regardless. Journey Payroll has the current state-by-state breakdown.

2. Test the Reasonableness
Even enforcing states require your agreement to be reasonable:

The laid-off worker leverage: If they didn't think you were valuable enough to keep employed, how can they claim you're valuable enough to restrict?

3. Document Your Layoff
Save everything:

Maryland courts scrutinize non-competes more heavily for involuntary separations (Smithey Law Group, June 2025).

4. Check Your TRAP Status

California (Jan 1, 2026+): TRAP likely void unless it meets AB 692's strict exceptions—separate agreement, transferable credential, prorated, no repayment if terminated.

New York (Dec 19, 2025+): TRAP void under Trapped at Work Act unless narrow exceptions apply.

Other states: TRAPs increasingly challenged as disguised non-competes.

5. Negotiate With Your New Employer

6. Run Your Numbers: Wait vs. Challenge vs. Risk

Wait it out: Can you survive 6-12 months on savings/temp work/unemployment?
Challenge it: Employment lawyer consultation ($200-$500, many free initial calls). If your state protects laid-off workers or your agreement is overbroad, you might win. But litigation is expensive.
Take the risk: Some companies don't enforce, especially for laid-off workers. But if they sue, you're facing legal fees even if you win.

7. Document Job Search Impact
Log jobs you couldn't apply for, income lost, and withdrawn offers. This creates evidence if you challenge the restriction's reasonableness.

"Noncompete agreements can be pernicious... The legal standard by which the FTC will assess non-competes under federal law is much like the common-law rule of reasonableness in the enforcement context."
— FTC Commissioner Mark Meador, September 2025

The death of the federal non-compete ban wasn't the end of worker protection it was the beginning of a state-level revolution.

California, New York, and others are building stronger, more specific protections than the FTC's rule would have provided. And the patchwork nature of these laws creates opportunities: if your state doesn't protect you yet, it might by next month.

The companies betting you don't know your rights or won't fight back are losing that bet. In 2025, knowledge is leverage.

Check your contract. Know your state's law. And remember: if they laid you off, they've already told you what they think you're worth to them. Don't let them also control what you're worth to everyone else.

-Win
Fellow layoff survivor, creator of Let Go Weekly