It’s Not Over Until It’s Over: The FTC Revives Its Battle Against Non-Competition Agreements

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Helena I. Poch Ciechanowski

April 14, 2025

In a move that is surprising primarily because of its alignment with the priorities of the former administration, new Federal Trade Commission (FTC) Chairman Andrew Ferguson is wasting no time firing a warning shot to employers whose labor practices he deems to be “deceptive, unfair, and anticompetitive.”  As the FTC’s infamous Non-Compete Ban remains in appeals court limbo, and the NLRB focuses its efforts away from non-competition agreements (see our article here), the FTC appears poised to intensify its efforts to “fight” employment-related restrictive covenants.  Specifically, in a directive dated February 26, 2025, Ferguson ordered “the FTC’s Bureau of Competition, Bureau of Consumer Protection, Bureau of Economics, and Office of Policy Planning to work together to prioritize rooting out and prosecuting unfair labor-market practices that harm American workers.”  According to Ferguson, harmful practices include all of the following:

• “No-poach, non-solicitation, or no-hire agreements,” which are defined as agreements among employers not to hire from one another
• “Wage-fixing agreements,” which, as the name suggests, are defined as agreements among employers to lock in the compensation of employees, thereby eliminating variances and dampening employees’ negotiating power
• “Noncompete agreements,” which prevent workers from accepting jobs in the same industry for a period of time
• “Labor-contract termination penalties,” which impose fees for ending contracts or switching employment
• “Collusion or unlawful coordination on DEI metrics,” which are efforts to promote Diversity, Equity & Inclusion that have the effect of excluding workers and students who do not possess certain characteristics

For a complete listing of the labor practices specifically identified in Chairman Ferguson’s Directive, please click here.

So what does this mean?  For the time being, it means that employers should not be lulled into a false sense of security about the non-competition, non-solicitation, forfeiture for competition, and training cost reimbursement provisions in their contracts.  While the nationwide Non-Compete Ban is unlikely to return in the near future, the FTC appears poised to continue investigating and prosecuting workplace practices and contractual arrangements that it believes impede worker mobility.

This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice.  Always consult an attorney with specific legal issues.