KEY TAKEAWAYS:

• The FTC continues to scrutinize non-compete agreements on a case-by-case basis after abandoning its defense of a broader federal ban.
• Recent FTC consent orders targeted restrictions affecting thousands of employees at Gateway Services and Rollins.
• The FTC has also challenged no-hire agreements that restrict businesses from employing current or former workers.
• Employers may consider narrowly tailored non-solicitation, confidentiality and intellectual property protections as alternatives to broad non-competes.

During the Biden administration, the National Labor Relations Board (NLRB) and Federal Trade Commission (FTC) took aggressive positions against employment non-competes. The NLRB issued Memorandum GC 23-08 positing that non-competes generally violate the National Labor Relations Act (NLRA) by interfering with Section 7 rights. The FTC went further by issuing a final rule to ban most non-competes. A Texas federal court struck it down in 2024 as beyond the FTC’s authority, and the FTC appealed. In the second Trump administration, the NLRB rescinded GC 23-08, and the FTC abandoned its appeal. In 2026, however, the agencies went in different directions, with the NLRB stating that non-competes generally do not affect Section 7 rights, while the FTC continued case-by-case enforcement through consent orders and other actions. As a result, employers should review agreements for non-compete provisions that the FTC may view as unlawful, which could expose them...

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