Moving Forward on Noncompetes: Key Takeaways from the Federal Trade Commission’s Noncompete Workshop

On January 27, 2026, the Federal Trade Commission (“FTC” or the “Commission”) held a noncompete workshop (the “Workshop”) that discussed the Commission’s role in addressing noncompete agreements under the Trump-Vance administration.

Not surprisingly, the FTC expressed a shift in its policy from the Biden-Harris administration’s approach that advanced the Noncompete Rule that would have banned most noncompete agreements nationwide.  

Under the Trump-Vance administration, the FTC will attempt to reduce anticompetitive uses of noncompetes through its existing enforcement authority on a case-by-case basis. Based on the FTC’s comments during the Workshop, it is likely that the Commission will seek to bring enforcement actions against employers who try to enforce noncompetes in particular industries, including the healthcare industry, sectors that the FTC believes confidential information does not play a big role, and against employers who seek to enforce noncompetes against low-wage employees.

The End of the Noncompete Rule and The FTC’s New Policy to Reduce Anticompetitive Noncompete Agreements

At the outset of the Workshop, the FTC’s Chairman, Andrew N. Ferguson explained that the Biden-Harris administration FTC’s attempt to promulgate the Noncompete Rule went beyond the Commission’s statutory authority by attempting to ban essentially all noncompetes through agency action instead of through the legislative process by elected representatives. Thus, the FTC will not move forward with respect to the Noncompete Rule, which in any event had failed in the courts. Chairman Ferguson did note that he did not necessarily oppose the substance of the Noncompete Rule and expressed his opinion that many noncompetes are harmful and anticompetitive.

The FTC emphasized that its case-by-case, targeted enforcement approach will focus on employers who restrict employees’ mobility through oppressive noncompetes that are not intended to protect the employer’s legitimate business interests. The following types of noncompete agreements may be subject to an FTC enforcement action because, according to the FTC, they may not protect the employer’s legitimate business interests: (1) those that solely protect an employer’s financial interests; (2) those that are required to be executed by employees employed in industries that generally lack legitimate business reasons for a noncompete, or (3) those that are required to be executed by low-wage employees. Although not expressly stated by the FTC, the amount of time spent discussing the healthcare industry during the Workshop’s seminars intimate that the FTC intends to scrutinize closely noncompetes in the healthcare industry.

The Commission encouraged employees to report anticompetitive noncompetes via its email address at noncompete@ftc.gov.

Healthcare Industry

The use of noncompetes in the healthcare industry has traditionally been a focus of the FTC. As we reported, in September 2025, the FTC sent warning letters to several large healthcare employers and staffing firms, urging them to review their employment contracts — including noncompetes — to ensure they are appropriately tailored and lawful. The letters emphasized concerns that overly broad noncompete provisions for nurses, physicians, and other medical professionals can limit employment options and reduce patients’ choices, particularly in rural areas. Also in September 2025, the FTC launched a public inquiry to gather information on noncompete practices to inform future enforcement actions.

The prominence of healthcare panelists—physicians, veterinarians, and other allied health professionals—at the Workshop, along with related discussions about the negative impact of such noncompetes to the public at large, indicates that noncompetes in the healthcare industry will continue to be scrutinized. The FTC also referred to its antitrust action involving U.S. Anesthesia Partners, where a healthcare and technology company, through its portfolio company, engaged in anticompetitive conduct to suppress competition and increase prices in the anesthesiology industry.

Industries with Limited Business Justification for Noncompetes         

The FTC also expressed its intention to bring enforcement actions against employers in industries where noncompetes lack clear business justification. During the Workshop, panelists highlighted examples of such industries, including hair salons and pet cremation services, where protecting confidential information is typically not a core concern. One panelist in the haircare industry shared how an expansive geographic restriction in her noncompete limited her ability to work near her home, forced her to relocate, and would have been overly expensive to fight in court.  

Low-Wage Employees

The FTC also signaled that noncompetes for low-wage employees will be another key area subject to scrutiny. This aligns with state legislation enacted in many jurisdictions that bars noncompetes for low-wage employees. Through panelist discussions, the Workshop highlighted examples of noncompetes being improperly used for low-wage employees, including  janitors, interns, part-time employees, and volunteers. The panelists remarked that broad geographic restrictions, high legal costs to challenge agreements, forced pay reductions, and relocation burdens caused by noncompetes disproportionately affect low-wage workers.

Additionally, representatives from the FTC’s Bureau of Competition, the U.S. Department of Labor (DOL), and policy directors discussed the negative impact of noncompetes on American workers—particularly low-wage employees, entry-level staff such as medical residents, and employees in industries with limited competition. The DOL emphasized its intention to support the FTC by reporting suspicious noncompete agreements identified during investigations, reinforcing the agencies’ collaborative effort to curb anticompetitive practices.

What Employers Should Do Now

With the FTC’s position on noncompetes and enforcement priorities now established, employers should carefully review their agreements to ensure they are narrowly tailored and compliant with the law. Key steps include:

• Ensuring noncompetes are related to a legitimate business interest;
• Discussing with counsel the FTC’s enforcement priorities;
• Developing reasonable alternatives to noncompetes, such as confidentiality agreements and non-solicitation provisions;
• Keeping the scope, geographic restrictions, and time limits narrow to reduce the risk that a noncompete will be subject to additional scrutiny; and
• Monitoring FTC and DOL guidance, warning letters, and public inquiries to proactively adjust policies and stay compliant.

We will continue to monitor and report any further FTC noncompete guidance.