January 27, 2026
FTC Holds Public Hearing on Employers’ Use of Non-Competes
On January 27th, the Federal Trade Commission held a public hearing “Moving Forward: Protecting Workers from Anticompetitive Non-Compete Agreements.” This follows the FTC’s request for information published in September 2025 asking employers and workers to submit comments about their experiences with non-compete agreements.
In the 51-page transcript from the hearing, FTC Chairman Andrew Ferguson explains that a valid non-compete agreement should:
- be necessary to sustain or increase the employer’s capacity to compete, to innovate, to improve their product, to attract a skilled and dedicated workforce, et cetera… but the assertion of a pro-competitive justification alone is not enough;
- the agreement must be narrowly tailored to achieve a pro-competitive purpose sought by the employer. Said another way, is there a less restrictive type of restraint that would accomplish the goal or goals that the non-compete is purportedly meant to promote; and
- even where no less restrictive alternative is available, the scope and duration of the non-compete agreement still must be limited to what is necessary to advance the employer’s pro-competitive interest.
Up Next? Consider the Chairman’s comments above. Apply the factors to your company’s use of any restrictive covenants, not just non-competes. Why? Chairman Ferguson mentioned the FTC’s analyses include employers’ use of no-solicitation, confidentiality, and non-disclosure agreements, too. The Chairman explained the FTC’s goal is to provide “education through enforcement. By bringing enforcement actions against specific businesses executing unjustified, overbroad, unfair, or anti-competitive non-compete agreements, others will take notice and adjust their agreements accordingly.” Have legal counsel review your current agreements including for compliance under state laws that may add further restrictions. Don’t be a case study. Click here for the FTC’s related webpage.
