In 2024, the Federal Trade Commission promulgated a nationwide rule banning most non-competition agreements. After more than a year of litigation holding up enforcement of the FTC’s rule, the Trump administration, on September 5, 2025, announced that it would dismiss its attempts to overturn the injunctions that ban the enforcement of the rule.
Surprisingly, however, the FTC has also taken several actions indicating that the agency will continue to try to curb the use of noncompetes, especially in the health care industry.
On September 4, 2025, the FTC launched a public inquiry “to better understand the scope, prevalence, and effects of employer noncompete agreements, as well as to gather information to inform possible future enforcement actions.”
The inquiry is soliciting comments from the public “to help shine a light on unfair and anticompetitive agreements.” In a statement announcing the inquiry, the FTC acknowledged that “[w]hile noncompete agreements can serve valid purposes in some circumstances, available evidence indicates that they are often subject to abuse” and can lead to unwanted consequences.
The inquiry goes on to state that noncompetes “may unjustifiably prevent workers from moving to better jobs, impede new business formation, prevent the shift of labor from over-served to under-served markets, and harm rival employers’ ability to compete” leading to “lower worker earnings, lost innovation, higher consumer prices, and overall negative...
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