Noncompete agreements will remain under FTC scrutiny

As many employers likely recall, the Federal Trade Commission (FTC) under the Biden administration adopted a final rule in April 2024 that banned almost all noncompete agreements between companies and workers on the grounds that such agreements are an unfair method of competition. In August 2024, a federal judge in Texas issued an injunction that blocked the noncompete rule from taking effect nationwide, a decision the FTC appealed to the U.S. 5th Circuit Court of Appeals.

It’s widely expected that the injunction will be affirmed if the FTC under the Trump administration doesn’t drop the appeal first. (The new FTC Chair, Andrew Ferguson, was a member of the commission in 2024 and strongly dissented from the issuance of the rule.) But even assuming the noncompete rule officially dies, the FTC recently made clear it will continue to scrutinize noncompete agreements as part of a broader focus on labor practices.

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