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Key Takeaways

  • Texas imposes new limits on non-compete agreements with licensed physicians and health care professionals that takes effect September 1, 2025.
  • To be enforceable, non-competes with these individuals must now meet strict geographic and time limitations, have a buyout cap, and use clear contract language.
  • The law reflects a trend toward narrowing or prohibiting non-competes in health care.

On June 20, 2025, Texas enacted S.B.1318, which limits the scope of non-compete agreements applicable to licensed physicians and now, other “health care professionals.”  The law builds upon existing limitations for non-competes under Texas law, by further narrowing time and geographic limitations for practitioners, and it caps the existing buyout provision at a practitioner’s total annual salary and wages at the time of termination.

The law only applies to non-competes entered into or renewed on or after September 1, 2025.

Keys to Enforceability

The new law applies only to licensed physicians and “health care practitioners,” including dentists, RNs and vocational nurses, and physician assistance.  It excludes administrative roles or those managing or directing care in a non-clinical capacity.

To be enforceable, non-compete agreements with physicians and health care practitioners must include a –

  • Limited Buyout Cap: Employers must now offer a buyout option that is capped at no more than a practitioner’s total annual salary and wages at the time of termination.   
  • Five-Mile Geographic Restriction: The restricted area must be limited to a five-mile radius from physician’s primary practice location. This sharply narrows the enforceable footprint, potentially preventing employers from imposing broad restrictions to encompass multiple sites.
  • One-Year Maximum Duration: Non-competes must expire no later than one year after the end of employment. 

All terms and conditions must be stated clearly and conspicuously in writing, reducing ambiguity and strengthening enforceability by ensuring both parties understand their obligations.

Additionally, non-compete agreements with a physician are automatically void if the physician is involuntarily terminated without “good cause.”  Once in effect, employers must clearly document and justify terminations or else risk losing protections offered by a non-compete agreement.

From Lone Star to Lockstep

S.B. 1318 joins at least 15 other states that have enacted limitations on non-competes governing health care professionals. States like Connecticut, Montana, New Mexico, and South Dakota have already enacted broad or profession-specific bans, particularly for physicians, nurses, and other licensed providers.  While Texas stops far short of a full prohibition, its new law signals a shift toward tighter guardrails—balancing legitimate employer interests with those of departing practitioners and the public.

Locking-In Compliance: Employer Action Items

  • Apply the Law Prospectively: The new requirements only apply to non-competes entered into or renewed on or after the effective date, September 1, 2025, but all future agreements must comply.
  • Update Contract Language: Employers should review formatting, language, and placement of key provisions to ensure compliance and reduce litigation risk. Agreements must clearly and conspicuously state the terms and contain the buyout cap, expiration, five-mile geographic limitation, and continue to provide physicians with access to patient lists, records, and the ability to continue to see patients.
  • Define and Document Primary Practice Location: Employers with multiple sites or regional operations should define what is a “primary practice location” and carefully document primary practice locations in a way that preserves enforceability.  

To ensure compliance and reduce risk, we recommend reaching out to a Seyfarth attorney for guidance tailored to your organization.

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We’re pleased to announce that Seyfarth’s Trading Secrets blog has been named one of FeedSpot’s Top 10 Trade Secrets Blogs.

Compiled from thousands of blogs, FeedSpot’s list highlights leading sources based on web traffic, social media engagement, domain authority, and content freshness.

Edited by Dawn Mertineit, Trading Secrets offers timely updates and in-depth analysis on trade secrets, non-compete laws, and computer fraud developments.

Chambers

We are pleased to share that Seyfarth partner Dawn Mertineit authored the “USA Trends and Developments” section in the recently released Chambers Trade Secrets Global Practice Guide. This highly regarded publication provides timely insights and analysis on the evolving legal landscape of trade secrets law across the globe.

Dawn addresses the growing challenges businesses face in protecting their trade secrets amid rapid technological change and increasing legal limitations on the use of restrictive covenants. She emphasizes the need for companies to stay proactive in reviewing and revising their agreements to ensure compliance with shifting federal and state laws, as well as judicial trends.

As courts and legislators across the U.S. continue to scrutinize non-compete and non-solicitation agreements, the importance of trade secret protection has never been greater. Dawn’s contribution offers practical guidance for companies looking to fortify their competitive edge in this changing environment.

For those navigating the complexities of trade secret protection and restrictive covenant enforcement, the Chambers Trade Secrets Global Practice Guide is an essential resource.

Read the full guide here.

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With the FTC Ban on non-competes essentially dead in the Courts of Appeal, various states and agencies have taken up the mantle to further limit or expand the use of restrictive covenants for certain populations in 2025. 

Below is a list of major legislative changes, judicial decisions, and agency actions at the state and federal level affecting non-compete agreements in the first four months of 2025.

KEY TAKEAWAYS

  1. Compensation thresholds continue to shift, with states like Colorado, D.C., Maine, and Washington updating eligibility levels.
  2. Healthcare remains a focus: several states are restricting non-competes for physicians, nurses, and other providers.
  3. States are moving faster than federal agencies, creating a patchwork of evolving standards.
  4. Employers should proactively audit existing agreements for compliance and consult legal counsel before enforcement.

STATE LEGISLATIVE DEVELOPMENTS

Arkansas

  • On March 4, 2025, Arkansas amended its non-compete law to prohibit and void non-compete agreements that restrict the right of a physician to practice within their field.  The law takes effect 90 days after the legislative session ends (May 5, 2025).  (S.B. 139 [arkleg.state.ar.us]; Eff. est. 8/3/25)

Colorado

  • Colorado updated the highly compensated employee threshold: non-competes may only be entered into with employees earning $127,091 or more and covenants not to solicit customers may only be entered into with an employee earning approx. $76,254.60.  (7 CCR 1103-14 [cdle.colorado.gov]; Eff. 1/1/25)
  • On April 21, 2025, the Colorado legislature passed a bill that excludes certain doctors, dentists, and nurses from the highly compensated workers exemption to the state’s non-compete and customer non-solicitation laws. Covered healthcare providers may not be prohibited from disclosing their new professional contact information to their patients.  Also, the bill allows a non-compete agreement to include the recovery of certain recruiting expenses (e.g., relocation expenses, signing bonuses), so long as the employer’s recovery decreases proportionally over the course of not more than 3 years.  Colorado’s Governor has not signed the bill, but if enacted, it will take effect 90 days after adjournment of the legislative session on August 6, 2025.  (S.B. 83)

District of Columbia

  • In early February 2025, the Consumer Price Index for the Washington D.C. Metro area dropped from 2.8% to 2.7%.  Consequently, restrictions on non-compete clauses now apply to employees who earn $158,364 or less and medical specialists earning $263,939 or less.  (Index [bls.gov]; Update [does.dc.gov]; Eff. 1/1/25)

Florida

  • On April 24, 2025, the Florida legislature passed a bill governing non-compete agreements between employers and “covered employees,” defined as individuals, other than health care practitioners, earning a salary greater than twice the annual mean wage for their respective county. “Covered non-competes agreements” between covered employees and their employers will be required to be in writing, last no longer than 4 years, and the agreement must define the geographic area in which the employee agrees not to provide services similar to those provided to the employer during the preceding 3 years or in a role in which it is reasonably likely that the employee would use confidential information or customer relationships of the employer.  If the bill is signed into law, it will take effect on July 1, 2025.  (H.B. 1219 [flsenate.gov])

Illinois

  • Non-compete and non-solicitation provisions entered into after January 1, 2025 are unenforceable if the provision is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services from a mental health professional licensed in Illinois.  Effective February 7, 2025, Illinois enacted a law that revises the definition of “first responder” to include persons formerly employed as emergency medical services personnel, firefighters, and law enforcement officers. (S.B. 2737 [ilga.gov]; H.B. 2840 [ilga.gov]; Eff. 1/1/25 and 2/7/25)
  • Non-competes and non-solicitation agreements with a person employed in construction are void and illegal, regardless of whether the employee is covered by a collective bargaining agreement.  (S.B. 2770 [ilga.gov]; Eff. 1/1/25)

Kansas

  • On April 8, 2025, Kansas enacted a law amending its restraint of trade statute.  The amended law (1) directs the judiciary to modify contracts that are overbroad or otherwise not reasonably necessary to protect a business’s business interest, and grant only the relief reasonably necessary to protect such interests; (2) creates a presumption of enforceability for written non-solicitation agreements between a business owner and a business entity, including employee and material contact customer non-solicitation agreements, that does not last more than four years following the end of the owner’s business relationship with the business entity; and (3) creates a presumption of enforceability for written non-solicitation agreements with employees that lasts no more than 2 years following employment, if the agreements prohibit either (a) solicitation of employees, if it seeks to protect trade secrets or customer or supplier relationships, goodwill, or loyalty or (b) solicitation of material contact customers.  (S.B. 241 [kslegislature.gov]; Eff. 7/1/25)

Louisiana

  • Louisiana added restrictions to non-compete agreements with physicians that limit their ability to practice medicine, excluding certain physicians in rural hospitals or under certain federal contracts in rural parishes.  Non-competes with primary care physicians may not exceed 3 years, or 5 years for all other physicians, beginning from the effective date of the initial contract.  Agreements must include qualified parish-specific geographic limitations, and subsequent agreements between the employer and physician executed after the initial restricted period may not contain a non-compete provision.  (S.B. 165 [legis.la.gov]; Eff. 1/1/25)

Maine

  • The non-compete threshold was updated: employers may not enter into a non-compete agreement with an employee earning at or below $62,600 per year, which is based on the 2025 Poverty Guidelines published on January 15, 2025.  (HHS Poverty Guidelines [aspe.hhs.gov]; Eff. 1/1/25)

Maryland

  • Effective June 1, 2024, Maryland expanded its non-compete statute to prohibit non-compete agreements with healthcare providers who provide direct care to patients and earn $350,000 or less in annual compensation, as well as veterinary practitioners and technicians.  Noncompete and conflict of interest provision for those covered under the exemption may not exceed one year and a ten mile radius.  The prohibition applies to agreements executed on or after July 1, 2025.  (H.B. 1388 [mgaleg.maryland.gov])

Montana

  • On April 16, 2025, Montana amended its non-compete law, expanding its prohibition on non-competes to include naturopathic physicians, registered nurses, advance practiced nurses, and physician assistants.  (H.B. 198 [bills.legmt.gov]; Eff. 4/16/25)

Oregon

  • In late January 2025, Oregon increased the salary threshold for non-compete agreements from $113,241 to $116,427.  (Announcement [oregon.gov]; Eff. 1/1/25)

Pennsylvania

  • Pennsylvania prohibits non-competes with health care practitioners entered into after January 1, 2025.  Non-compete covenants are defined as agreements between employers and health care practitioners that have the effect of impeding the health care practitioners’ ability to continue treating patients or accepting new patients, either independently or with a competing employer.  Patients with an ongoing relationship with the practitioner of 2 or more years must be notified of their practitioner’s departure within 30 days.  (H.B. 1633 [legis.state.pa.us]; Eff. 1/1/25)

Rhode Island

  • The non-compete threshold for low-wage employees is increased to $39,125, which is based on the 2025 Poverty Guidelines published on January 15, 2025.  (Poverty Guidelines [aspe.hhs.gov]; Eff. 1/1/25)

Virginia

  • Virginia updated its average weekly wage for 2025 to $1,463.10.  Employers are prohibited from entering into non-compete agreements with “low wage employees” (including independent contractors) earning less than $1,463.10 per week.  (Announcement [doli.virginia.gov]; Eff. 1/1/25)
  • On March 24, 2025, Virginia  enacted a law that expands the definition of “low wage worker” under its non-compete law to include any person, regardless of weekly earnings, who is entitled to overtime under federal law for working in excess of 40 hours per week.  The bill does not apply to agreements entered into or renewed prior to July 1, 2025.  (S.B. 1218 [lis.virginia.gov]; Eff. 7/1/25)

Washington

Wyoming

  • On March 19, 2025, Wyoming enacted a law that voids non-compete agreements entered into on or after July 1, 2025, unless it relates to (1) executive and management personnel, their professional staff, and officers; (2) rights of a physician to practice medicine upon termination; (3) recovering qualified expenses related to relocating, education, and training; (4) the sale of a business/asset; and (5) trade secret protections.  Physicians may share their new contact information to existing patients with a rare disorder.  (S.F. 107 [wyoleg.gov]; Eff. 7/1/25)

FEDERAL AND JUDICIAL DEVELOPMENTS

U.S. Court of Appeals in the Seventh Circuit

  • On January 22, 2025, the 7th Circ. held that courts do not review forfeiture-for-competition provisions for reasonableness if the employee voluntarily terminated their employment.  (LKQ Corp. v. Rutledge [media.ca7.uscourts.gov])

Washington Supreme Court

  • On January 23, 2025, the Washington State Supreme Court held that the state of Washington’s moonlighting law protects employees who earn less than twice the state minimum wage from unreasonable restrictions on obtaining supplemental employment, and permits employers to impose only narrow restrictions consistent with the employee’s duty of loyalty. Consequently, a non-compete agreement with a low-wage worker cannot bar employees from providing both direct and indirect assistance to competitors.  (David and Springer v. Freedom Vans, LLC. [courts.wa.gov]; Seyfarth Post)

NLRB

FTC

  • On February 26, 2025, the FTC announced that it created a joint task force that will focus on rooting out and prosecuting anti-competitive labor practices, including the use of non-competes, no poach, no-solicitation, and no-hire agreements.  (Announcement [ftc.gov]; Seyfarth Post)

Stay tuned for continued developments as the legal landscape for restrictive covenants continues to evolve throughout 2025.

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2025 Trade Secrets Webinar Series

REGISTER HERE

Thursday, May 1, 2025
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

About the Program

In today’s always-online world, a single social media post, GitHub upload, or Slack message can put millions of dollars in proprietary data at risk.

Join Seyfarth’s Trade Secrets team for our next webinar in the 2025 Trade Secrets Webinar Series, where we’ll explore how digital platforms—from LinkedIn to messaging apps—can become high-risk zones for trade secret exposure.

This session will cover:

  • Common ways trade secrets are inadvertently leaked online
  • How to proactively train and guide employees on safe digital practices
  • Key policy, monitoring, and enforcement strategies for protecting IP
  • Practical steps to take when a potential disclosure occurs
  • Legal implications and what recent cases are telling us

This webinar is designed for in-house counsel, business leaders, and professionals overseeing trade secret protection, AI innovation, and intellectual property strategy.

Speakers

Kevin Mahoney, Partner, Seyfarth Shaw LLP
Mitch Robinson, Senior Counsel, Seyfarth Shaw LLP
Andrew Saxon, Senior Counsel, Seyfarth Shaw LLP

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If you have any questions, please contact Sela Sofferman at ssofferman@seyfarth.com and reference this event.

To comply with State CLE Requirements, CLE forms requesting credit in IL or CA must be received before the end of the month in which the program took place. Credit will not be issued for forms received after such date. For all other jurisdictions forms must be submitted within 10 business days of the program taking place or we will not be able to process the request.

Our live programming is accredited for CLE in CA, IL, and NY (for both newly admitted and experienced).  Credit will be applied as requested, but cannot be guaranteed for TX, NJ, GA, NC and WA. The following jurisdictions may accept reciprocal credit with our accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, AR, CT, HI and ME. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used for self-application. CLE decisions are made by each local board, and can take up to 12 weeks to process. If you have questions about jurisdictions, please email CLE@seyfarth.com.

Please note that programming under 60 minutes of CLE content is not eligible for credit in GA. programs that are not open to the public are not eligible for credit in NC.

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Tuesday, May 6, 2025
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

Register Here

About the Program

Join us for the third and final session of our Commercial Litigation Outlook webinar series, where we’ll examine key legal trends shaping the future of trade secrets, non-compete agreements, eDiscovery, and data privacy. This session will deliver practical insights into regulatory changes, litigation risks, and compliance strategies across these dynamic areas.

Key topics include:

  • Non-Compete Enforcement in Flux: Analyze shifting federal and state approaches to non-compete agreements, including the uncertain fate of the FTC’s proposed ban, ongoing legal challenges, and increased scrutiny in jurisdictions like California, Minnesota, and Delaware.
  • Prioritizing Trade Secret Protection: As non-compete agreements face greater limitations, discover how businesses can strengthen trade secret defenses through enhanced protocols, documentation, and technology—especially in the context of emerging AI-related risks.
  • GenAI’s Impact on eDiscovery: Explore how generative AI is transforming discovery workflows, prompting new expectations around transparency, defensibility, and the protection of work product—guided by recent case law and evolving ESI standards.
  • Litigating AI-Generated Evidence: Delve into the challenges posed by deepfakes and synthetic content, from authentication concerns to rising litigation costs, and the importance of proactive detection and preservation protocols.
  • Privacy Litigation on the Rise: Examine how evolving statutes such as CCPA, CIPA, and BIPA are being used to contest companies’ use of tracking technologies, biometric tools, and connected devices—and how courts are addressing harm and standing.
  • Managing Emerging Privacy Risks: Gain insight into the growing legal exposure tied to telematics, algorithmic decision-making, and sensitive health data—and explore proactive mitigation strategies like privacy audits, enhanced disclosures, and vendor oversight.

Speakers

Moderator:

Rebecca Woods, Partner, Seyfarth Shaw LLP

Panelists:

Dawn Mertineit, Partner, Seyfarth Shaw LLP
Jay Carle, Partner, Seyfarth Shaw LLP
Matthew Christoff, Partner, Seyfarth Shaw LLP
Jason Priebe, Partner and Associate General Counsel, Seyfarth Shaw LLP

Register Here

If you have any questions, please contact Sadie Jay at sjay@seyfarth.com and reference this event.

Learn more about our Commercial Litigation practice. To comply with State CLE Requirements, CLE forms requesting credit in IL or CA must be received before the end of the month in which the program took place. Credit will not be issued for forms received after such date. For all other jurisdictions forms must be submitted within 10 business days of the program taking place or we will not be able to process the request.

Our live programming is accredited for CLE in CA, IL, and NY (for both newly admitted and experienced).  Credit will be applied as requested, but cannot be guaranteed for TX, NJ, GA, NC and WA. The following jurisdictions may accept reciprocal credit with our accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, AR, CT, HI and ME. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used for self-application. CLE decisions are made by each local board, and can take up to 12 weeks to process. If you have questions about jurisdictions, please email CLE@seyfarth.com.

Please note that programming under 60 minutes of CLE content is not eligible for credit in GA. programs that are not open to the public are not eligible for credit in NC.

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Wyoming, with the introduction of Wyo. Stat. §1-23-108, banned most non-compete agreements for contracts signed on or after July 1, 2025, but with several meaningful exceptions. If you do business in Wyoming, here’s what you need to know:

Key Exceptions to the Ban

While the majority of non-compete agreements will be unenforceable, Wyoming’s new statute carves out several exceptions:

  1. High-Level Employees: Non-compete agreements can still apply to “executive and management personnel” and their professional staff. However, the law does not define these terms, leaving employers (and the courts) to assess which roles fall under this category.
  2. Sale-of-Business Agreements: When a business is sold or transferred, the buyer and seller can negotiate non-compete clauses. This provision ensures that buyers can safeguard the value of their investment.
  3. Trade Secrets: A non-compete agreement will be valid to the “extent the covenant provides for the protection of trade secrets as defined by W.S. §6-3-501(a)(xi).”
  4. Recovery of Expenses: Employers may require employees to repay training, education, or relocation costs if they leave within four years of their employment (a so-called “TRAP” agreement). Repayment percentages are tiered as follows:
    • Up to 100% if employment lasts less than two years.
    • Up to 66% for employment between two and three years.
    • Up to 33% for employment between three and four years.

Special Protections for Physicians

Non-compete agreements with physicians are prohibited outright. Additionally, doctors with patients who have rare disorders can inform them of their new practice location and contact details, ensuring continuity of care, with no fear of liability to the physician or any new employer.

What This Means for Wyoming Employers

The new statute applies prospectively to agreements signed on or after July 1, 2025. Employers should work with legal counsel prior to July 1, 2025 to ensure compliance, especially when defining roles for high-level employees, safeguarding trade secrets, or structuring repayment agreements for employee training, education and relocation costs.

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In our recent webinar, “Drafting Restrictive Covenants That Work – Insights from Recent Legal Battles,” Seyfarth’s Trade Secrets, Computer Fraud & Non-Compete partners Dawn Mertineit and Dallin Wilson explored the evolving legal landscape surrounding restrictive covenants. As courts and lawmakers continue to scrutinize non-competes, non-solicits, and NDAs, employers must adapt their agreements to remain enforceable while protecting critical business interests. The session provided key insights into judicial trends, legislative updates, and best practices for drafting enforceable restrictive covenants.

Key Takeaways from the Webinar

  • The legal landscape is shifting rapidly. Courts and legislatures are continually reshaping restrictive covenant law, requiring employers to stay informed and update their agreements accordingly.
  • Broad restrictive covenants are facing more judicial resistance. Many courts now refuse to narrow overbroad agreements, meaning employers should carefully draft restrictions to be no broader than necessary to protect legitimate business interests.
  • Jurisdiction matters. States are increasingly imposing venue and choice-of-law restrictions, making it more difficult for employers to enforce restrictive covenants in their preferred jurisdictions. Businesses should strategically consider where enforcement will be most effective.

Missed the live session? Click here to watch the full webinar recording.

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On March 7, 2025, lawyers for the Federal Trade Commission (FTC) filed motions requesting a 120-day stay of the agency’s appeal of district court decisions in the Fifth Circuit and Eleventh Circuit, which had blocked the FTC’s proposed ban on non-competes (the “Rule”) in the Ryan v. FTC and Properties of the Villages (“POV”) v. FTC cases, respectively. The nearly-identical filings cite the change in presidential administrations and the new FTC’s Chair, Andrew Ferguson, who has publicly stated that the agency should reconsider its defense of the Rule. The FTC plans to provide the Court with a status report on the case’s future steps at the end of the 120-day stay. As anticipated, the plaintiffs in both cases do not oppose the FTC’s motion.

Before ascending to lead the agency, then-Commissioner Ferguson opposed the Rule, arguing that it lacked the authority for broad rulemaking to ban non-compete agreements while also offering pro-business justifications against the ban. Chairman Ferguson’s recent comments, however, follow an apparent change of focus for the soon-to-be Republican majority of the FTC to pursue policies that “protect American workers,” which we previously discussed here. These include the announcement of the formation of a Joint Labor Task Force responsible for investigating and prosecuting deceptive, unfair, and anti-competitive labor market conduct, among other directives, including “non-compete agreements, which employers can use to impose unnecessary, onerous, and often lengthy restrictions on former employees’ ability to take new jobs in the same industry after they leave their employment” and “[n]o-poach, non-solicitation, or no-hire agreements, where employers agree to refrain from hiring each other’s employees.”

Chairman Ferguson’s recent remarks suggest that the current administration will prioritize individual prosecutions, rather than broad rulemaking, to police abusive and overreaching use of non-compete agreements. Where non-compete agreements falls on the new administration’s priority list, however, remains to be seen.

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As Republicans regain control of the Federal Trade Commission (“FTC”) under the Trump-Vance Administration, employers that looked to maintain and enforce their non-compete agreements with employees may have found solace in the statements of certain FTC Commissioners who vocally opposed the FTC’s nationwide ban on non-compete agreements. However, recent statements by the FTC’s newly-appointed Chair, Andrew Ferguson, along with the recent appointment of Commissioner Meador, have revealed that the FTC’s scrutiny of non-compete agreements is far from over.

The arrival of the Trump-Vance Administration seemingly ushered in a new directive for federal agencies, including the FTC, to pursue policies that protect American workers.  This directive is arguably distinct from prior Republican administrations’ signature pro-employer platforms. Indeed, Chairman Ferguson previously opposed the FTC’s rule banning non-compete agreements that was promulgated under former FTC Chair, Lina Khan.  However, Chairman Ferguson has had a recent change of focus, signaling that, while a blanket ban under the rule may have been unlawful, the FTC will nevertheless prosecute individual abusive uses of non-compete agreements under his leadership and support additional policies aimed at protecting workers.

Chairman Ferguson recently announced the formation of a Joint Labor Task Force in a memorandum addressed to the Directors of the Bureau of Competition, Bureau of Consumer Protection, Bureau of Economics, and Office of Policy Planning.  In the memorandum, Chairman Ferguson directed the bureaus to form a Joint Labor Task Force responsible for investigating and prosecuting deceptive, unfair, and anti-competitive labor market conduct, among other directives.[1] The memorandum claims that the ability of Americans to earn a living is “harmed by deceptive, unfair, and anti-competitive employer labor practices,” and declares that the FTC has the mandate and jurisdiction to fight such practices. As examples of such unfair or deceptive practices and unfair methods of competition, the memorandum lists “non-compete agreements, which employers can use to impose unnecessary, onerous, and often lengthy restrictions on former employees’ ability to take new jobs in the same industry after they leave their employment” and “[n]o-poach, non-solicitation, or no-hire agreements, where employers agree to refrain from hiring each other’s employees.” In announcing the formation of the Joint Labor Task Force, Chairman Ferguson took to social media to declare that the “GOP is a workers’ party,” and signaled to American workers that the FTC “has their back.”[2] Chairman Ferguson emphasized that the Joint Labor Task Force “will scrutinize non-compete agreements, deceptive job advertisements, wage-fixing schemes, unlawful coordination on DEI employment metrics, and much more.”

Chairman Ferguson’s recent pro-worker statements appear to represent a significant policy shift for the soon-to-be Republican majority of the FTC.[3] In his dissenting statement against the FTC’s ban on non-compete agreements, then-Commissioner Ferguson argued that the rule was unlawful because the FTC lacked the authority and evidence to sustain the rule.[4] Commissioner Ferguson took a pro-business stance, claiming that non-compete agreements can “promote an employer’s investment in its employees” by reducing the risk that “a rival will ride freely on those investments” by luring employees away “before the investing employer can recoup the return on those investments.”[5] These prior statements appear to be a dramatic departure, at least in focus, from Chairman Ferguson’s recently expressed intent to scrutinize and prosecute non-compete agreements.

In another move, President Trump also nominated Mark Meador to be an FTC Commissioner, filling the third Republican seat on the commission. At his nomination hearing, Meador similarly indicated that the FTC should focus on non-compete agreements in employment contracts, adding that non-compete agreements have been “overused and abused.”[6] Although Meador declined to comment on the FTC’s rulemaking authority due to the pending litigation, Meador emphasized that the FTC should investigate how it could use its “traditional enforcement powers” to address the harms of non-compete agreements. Meador’s statements suggest that although the FTC, under a soon-to-be Republic majority, will likely not use rulemaking to go after noncompete agreements, it will nonetheless go after non-compete agreements.

Ultimately, despite a change in leadership, the FTC remains intent and focused on addressing non-compete agreements. Chairman Ferguson’s memorandum makes clear that the FTC will go after non-compete agreements that impose unnecessary, onerous, and lengthy restrictions that restrict employees from taking new jobs in the same industry. The actual level of scrutiny that will be applied by the FTC, however, remains to be seen.

[1] See Memorandum from Andrew N. Ferguson, Chairman, Fed. Trade Comm’n, on Directive Regarding Labor Markets Task Force (Feb. 26, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/memorandum-chairman-ferguson-re-labor-task-force-2025-02-26.pdf

[2] @AFergusonFTC, X (Feb. 26, 2025, 3:41 PM), https://x.com/afergusonftc/status/1894865373134004708?s=46.

[3] See Press Release, Fed. Trade. Comm’n, FTC Announces Rule Banning Noncompete (Apr. 23, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes.  

[4] See Andrew N. Ferguson, Comm’r, Fed. Trade Comm’n, Dissenting Statement Regarding In the Matter of the Non-Compete Clause Rule, Matter Number P201200 (June 28, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-noncompete-dissent.pdf.

[5] Id. at 38.

[6] See Nomination Hearing of Mark Meador for Federal Trade Commission, PN12-29, 119th Cong. (2025), https://www.commerce.senate.gov/2025/2/nominations-hearing-for-michael-kratsios-to-lead-the-office-of-science-and-technology-policy-and-mark-meador-to-serve-as-a-federal-trade-commissioner.