On September 5, 2025, the Federal Trade Commission ended its multi-year effort to implement a nationwide ban on non-compete agreements. Although the proposed nationwide ban is, at least for now, no longer a threat...
On September 5, 2025, the Federal Trade Commission ended its multi-year effort to implement a nationwide ban on non-compete agreements. Although the proposed nationwide ban is, at least for now, no longer a threat, non-compete agreements remain subject to Section 5 of the FTC Act, as well as to state statutes and common law. Despite this setback for the FTC, employers should be alert that non-compete agreements will be subject to heightened scrutiny at the federal level, and state legislatures have shown increasing interest in imposing additional restrictions on the use of such covenants. FTC Chairman Andrew N. Ferguson emphasized in his statement that the FTC will continue to pursue enforcement actions against "unlawful non-compete agreements" and that FTC intends to distribute warning letters encouraging businesses to reconsider overly broad non-compete provisions while the FTC prepares future investigations and enforcement actions.
Recent actions by the FTC evidences its intent to sustain this heightened level of scrutiny. On September 4, 2025, FTC filed a complaint against a national pet cremation company alleging a violation of Section 5 of the FTC Act based on its non-compete agreements with its employees. In addition, on September 10, 2025, just five...
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