Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC workshop stresses need for case-by-case enforcement of noncompete agreements, (Jan 27, 2026)

By Patricia K. Ruiz, J.D.

The speakers highlighted the harmful impact of non-compete agreements on lower paid and more vulnerable workers.

In an FTC workshop entitled Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements, agency leaders, commissioners, and experts convened to examine the ongoing impact of restrictive employment covenants in the wake of the vacated 2024 NonCompete Rule. The FTC used the forum to outline its forward-looking strategy—one rooted in traditional legal principles and case-by-case enforcement—and to spotlight how noncompete agreements continue to affect worker mobility, wages, and competition across the economy. The event brought together policymakers, economists, legal experts, and workers themselves to assess the real world consequences of noncompetes and to explore how existing antitrust laws can be leveraged to protect workers from practices deemed harmful or unjustified.

Non-compete rule. The FTC’s 2024 NonCompete Rule—intended to broadly ban most noncompete agreements nationwide—was vacated following a series of conflicting federal court rulings, leaving the rule unenforceable and restoring the patchwork of state laws governing noncompetes. Courts in Texas and Florida held that the FTC exceeded its statutory authority and that the rule triggered the major questions doctrine, while a Pennsylvania court upheld the FTC’s authority but denied injunctive relief. After dismissing its appeals in 2025, the FTC formally acknowledged the rule is not in effect but signaled it will continue targeting allegedly anticompetitive noncompetes through case-by-case enforcement under existing antitrust laws, including Section 5 and Sherman Act “rule of reason” analysis.

Enforcement through traditional principles. According to FTC Chairman Andrew N. Ferguson, understanding the real world effects of noncompete agreements requires grounding enforcement in the traditional principles that courts have applied for centuries. Ferguson acknowledged that noncompetes can have anticompetitive effects—particularly when they restrict skilled labor and suppress competition—but emphasized that addressing these harms must be done through lawful, targeted enforcement rather than through sweeping regulatory overreach. He pointed to longstanding common law rules requiring that noncompetes be limited in time and geography, narrowly tailored to protect a legitimate business interest, and balanced against the hardship imposed on workers and the public’s interest in open competition. Courts, he noted, have consistently required employers to justify noncompetes as truly necessary and not broader than required.

Ferguson explained that the FTC’s proper role is to proceed case by case, pursuing enforcement actions against noncompetes that harm workers or competition, and inviting the public to submit agreements they believe are abusive. While some critics argue that this approach is too incremental, he maintained that a piecemeal strategy is appropriate because the Commission lacks authority to impose a universal ban and must operate within the limits Congress set through common law principles and existing antitrust statutes. He further emphasized that a lawful noncompete must advance a legitimate procompetitive interest and be narrowly tailored—meaning the Commission will ask whether a less restrictive alternative could achieve the same goal. Through this approach, Ferguson argued, the FTC can curb harmful noncompetes while respecting legal boundaries and long established principles of reasonableness.

Noncompetes and affordability. Commissioner Mark R. Meador emphasized that the FTC’s interest in noncompete agreements stemmed from a core concern with “kitchen-table issues,” especially affordability for American households. He argued that affordability is fundamentally a demand side issue: workers need higher wages to meet rising costs. According to Meador, the widespread and expanding use of noncompetes across multiple sectors contributed to lower wages and reduced affordability because many of these agreements were used not to protect legitimate business interests, but as scare tactics to restrain vulnerable workers who could not afford to challenge them. These workers disproportionately bear the harms—wages remained suppressed, mobility declines, and the ripple effects ultimately impacts consumers.

Meador acknowledged that noncompetes could be appropriate for certain key employees who possess vital trade secrets but stressed that such cases are the exception, not the rule. He outlined a framework for evaluating whether a noncompete is reasonable, noting that such agreements are less appropriate for jobs involving limited specialized training or lower pay. He explained that the FTC considers whether the agreements have reasonable scope and duration and also considers factors such as the likelihood of free-riding, whether less restrictive alternatives (like nondisclosure agreements) would suffice, the employer’s market power, and the evidence of actual economic effects. Noncompete agreements should not be used in a way that limits worker mobility or depresses wages.

Workshop panels. The first panel centered on workers directly affected by restrictive noncompete agreements, illustrating how these contracts limit mobility and economic opportunity. Speakers included Dr. Selvam Mascarenhas, an internal medicine physician and health system leader; Cindy Holbrook, a cosmetologist whose noncompete prevented her from continuing her career independently; Dr. C.J. Caniglia, a large animal surgeon who successfully advocated for Maryland’s prohibition of veterinary noncompetes; and Dr. Jennifer Kendall, a PM&R specialist and national leader in osteopathic medicine. The discussion was moderated by Logan Wilke, an FTC attorney with expertise in labor market antitrust issues.

The second panel detailed policy, enforcement, and regulatory perspectives on noncompetes and their broader impact on labor markets. The lineup included Mark Woodward, an FTC assistant director focused on anticompetitive conduct; Jonathan Berry, U.S. Department of Labor Solicitor and former senior federal regulatory official; John W. Lettieri, President and CEO of the Economic Innovation Group, bringing economic development expertise; and Chris Griswold, policy director at American Compass with research experience spanning labor, economics, and public policy. Kelse Moen, Deputy Director of the FTC’s Bureau of Competition and cochair of the Joint Labor Task Force, served as moderator.

The final panel examined how noncompete agreements affect labor markets, competition, and economic outcomes. Speakers include Dr. Evan Starr, a University of Maryland researcher widely published on restrictive covenants; Dr. Devesh Raval, FTC Deputy Director of the Bureau of Economics with expertise in industrial organization; Dr. David Balan, a longtime FTC economist and current Managing Director at Econ One Research; and Dr. Bruce H. Kobayashi, a law-and-economics scholar and former Director of the FTC’s Bureau of Economics. The session was moderated by Miriam Larson-Koester, a Deputy Assistant Director in the FTC’s Bureau of Economics specializing in labor market impacts of mergers.

News: Antitrust ConsumerProtection FederalTradeCommissionNews