Practical Steps Employers Should Take to Avoid FTC Enforcement Action of Non-Competes

By Kerr, Russell and Weber, PLC

March 12, 2026

It is rare for the Trump Administration to publicly agree with the enforcement decisions made by the Biden Administration, but that is exactly what happened in late January at the FTC’s workshop highlighting enforcement priorities with respect to non-compete agreements.

Both administrations agree that the use of non-compete agreements in the U.S. have gone too far and the FTC will take enforcement action to curtail their misuse.

The speakers at the FTC workshop highlighted the ills of non-compete agreements in the healthcare industry and for low wage workers, but the message was made clear from the FTC Chair for all employers: “Days of unreflective, unjustified, and anti-competitive non-compete agreements are over. If a company wants to execute a non-compete agreement, they had best be prepared to defend it.” Below are practical steps employers can today take to avoid the FTC targeting its enforcement resources against your non-competes.

Working with counsel, you should audit all existing non-compete agreements to ensure that they are compliant with the law in your state and will stand up to the FTC’s scrutiny.

First, the FTC is taking a hard look at non-competes that are not individualized. Ensure you are not using blanket, across-the-board non-competes for all employees regardless of job title and duties. If your business is doing so, you will want to consider whether modifications are necessary or whether you should release the non-competes for classes of employees.

Second, the FTC is relying on traditional non-compete law to analyze the scope and breadth of non-compete clauses. You should ask:

- Are the geographic and temporal boundaries and the limitations on the lines of business in my non-competes narrowly tailored to protect my legitimate business interests for each class of employees?
- Am I able to articulate how the scope and breadth of my non-competes protect my legitimate business interest for each class of employees?

If you cannot identify how the scope and breadth of your non-competes protect your legitimate business interests for a class of employees, you will never be able to satisfy the requirement on an individualized basis as is necessary to withstand FTC scrutiny and your non-competes likely require modification.

If you can justify your non-compete agreements for a class of employees, are their scope and breadth reasonable on an individual basis? Are your agreements tailored to address individual employees based upon their individual experiences? If not, you will want to consider modifying the agreements to be individualized.

Third, the FTC expects employers to consider means other than non-competes for protecting their business interests. Employers should identify their legitimate business interests that are being protected by their non-competes and attempt to identify other means of protecting those interests, including targeted non-solicitation clauses, confidentiality clauses, and increasing employee satisfaction in other ways.

Many times, employers claim that non-competes are needed to protect trade secrets and confidential information. Policies and technology that limit access to information may protect the interest just as well as non-compete agreements.

Finally, once you have gone through all of the steps above, you should document why you have decided to retain the non-competes you have left, including the legitimate business interests that are being protected and why no other means are adequate to protect them.

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