The Federal Trade Commission (FTC) reaffirmed it will pursue aggressive enforcement against noncompete agreements on a case-by-case basis rather than seek a nationwide ban.
In a recent public hearing, the agency’s leadership said that it will target overly broad, unjustified noncompetes, especially for lower-wage workers, and urged employers to review agreements to ensure they are narrowly tailored and tied to legitimate business interests.
FTC Chairman Andrew Ferguson reiterated his belief that noncompete agreements — contractual terms that block a worker from working for a competing employer, or starting a competing business, within a certain geographic area and period of time after the worker’s employment ends — can have anti-competitive effects. But he objected to the Biden administration’s 2024 rule that would have banned nearly all noncompete agreements nationwide as overreach. The rule was struck down by a federal court in August 2024.
Ferguson said the FTC would take an “education through enforcement” approach instead.
“The case-by-case approach will have effects beyond each individual case,” he said. “Once firms see that unjustified or overbroad noncompete agreements increase the risk of FTC enforcement, they will not enter into those agreements without giving serious consideration to whether those agreements are necessary to advance some legitimate business interest, and whether a less restrictive agreement could achieve that same end.”
He added that the agency...
Copyright 2026, Northwest Arkansas Newspapers LLC. (NWA Media) All rights reserved. This document may not be reprinted without the express written permission of Northwest Arkansas Newspapers LLC ...