While a federal court enjoined the Federal Trade Commission’s (FTC) prohibition on most non-compete agreements in August 2024, it appears that the new administration has not completely abandoned its focus on how such agreements may impact the American labor market. The prior administration appealed the nationwide injunction to the Fifth Circuit Court of Appeals in October 2024. On March 12, 2025, the Fifth Circuit granted the new administration’s request to stay the appeal for 120 days. In moving to the 120 day stay, the FTC cited President Trump’s position that “the Commission . . . basically needs to decide whether [the rule] is a good idea [and whether] it’s in the public interest to continue defending this rule.”
FTC Forms Joint Labor Task Force
On February 26, 2025, FTC Chair Andrew Ferguson released a memorandum directing the heads of the FTC’s Bureaus of Competition, Consumer Protection, and Economics, as well as the Office of Policy Planning, to form a Joint Labor Task Force focused on scrutinizing certain labor-market practices that may harm American workers. More specifically, the directive called for the investigation and prosecution of unfair, deceptive, or anticompetitive labor conduct, including the investigation of non-compete clauses and agreements. Through this Joint Labor Task Force, the FTC Chair has made clear his intention to “ensure that the FTC prioritizes labor issues in both its consumer-protection and competition matters.”
Next Steps
At this time, the future of the original FTC ban remains unknown, but announcement of the Joint Labor Task Force signals that the FTC will continue to focus on antitrust enforcement during the current administration and may continue to zero in on non-compete agreements as part of that broader effort. Along with monitoring these developments, companies should continue to think about ways to protect legitimate business interests that are alternative to non-compete agreements, including non-solicitation agreements and non-disclosure agreements.
JAH Can Help
The experienced attorneys at Johnston Allison Hord are tracking the updates to the FTC’s focus on non-compete agreements and can assist your organization with any questions you may have. If you need assistance, contact a member of our Employment Practice Group by completing our General Contact Form.
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