New Direction in Noncompete Enforcement: What Employers Need to Know

In recent months, both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) have scaled back past efforts to broadly limit the use of noncompete agreements. While these agencies are no longer pursuing sweeping regulatory changes aimed at curtailing noncompete agreements across the board, they have not abandoned the issue. Employers should remain alert, as federal scrutiny of restrictive covenants is expected to continue in a more targeted, case-by-case fashion.

In 2024, the FTC finalized a rule that would have barred nearly all noncompete agreements, regardless of industry or job level. That rule was immediately challenged, and two federal courts blocked its enforcement. In March 2025, the FTC asked two appellate courts to pause or stay those challenges for 120 days, citing the agency’s intent to reconsider whether defending the rule remains in the public interest. These statements, combined with leadership changes within the agency, strongly suggest that a broad noncompete ban is unlikely to move forward.

However, the FTC has not signaled a full retreat from examining anti-competitive practices. Just before its March actions, it launched a Joint Labor Task Force to prioritize investigations into potentially unfair labor market practices, including noncompete, no-poach, non-solicitation, and no-hire agreements. This new task force is tasked with coordinating across FTC offices to pursue conduct deemed deceptive, anticompetitive, or harmful to workers. The agency appears to be disengaging from rulemaking and moving towards selective enforcement, using existing statutory authority.

The NLRB is also rebalancing its approach. In February 2025, the agency’s General Counsel rescinded prior memoranda that broadly characterized most noncompete and training repayment provisions as unlawful under the National Labor Relations Act. No replacement guidance has been issued, indicating a more restrained posture for now.

In light of these redirects, employers should take this opportunity to review and revise any existing noncompete agreements. Restrictions should be narrowly tailored, tied to legitimate business interests, and compliant with applicable state law. Overbroad or one-size-fits-all clauses, especially those applied to lower-wage or nonsensitive roles, remain risky and may still draw enforcement attention.

K|W|W anticipates further developments on this issue and will continue to monitor this activity. Should you have any questions about how this may affect your business, do not hesitate to contact any K|W|W attorney for assistance. At K|W|W, your workforce is our priority.