On January 27, 2026, the Federal Trade Commission (FTC) held a workshop entitled “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.” The workshop was part of the FTC’s broader efforts to highlight the adverse effects of noncompete agreements and signal its current enforcement priorities to employers. Although, in the face of litigation last year, the FTC withdrew its proposed ban on noncompetes, it has continued to build its case against them in recent months. This includes by issuing warning letters to healthcare employers and staffing companies, challenging individual employers it views as overreaching, and building a broader record on how the agreements affect workers and markets.

Speakers at the workshop emphasized moving towards a case-by-case approach attacking unjustified, overbroad, unfair, or anticompetitive noncompete agreements in the employment context. According to the FTC, “Days of unreflective, unjustified, and anticompetitive noncompete agreements are over. If a company wants to execute a noncompete agreement, they had best be prepared to defend it.”

Key Takeaways

Even without rulemaking authority, the FTC’s enforcement tools remain active.

• Speakers stressed that while the Commission cannot impose a blanket prohibition on noncompetes, it can still pursue individual agreements that run afoul of Section 5 of the FTC Act or violate antitrust laws. The FTC plans to enforce noncompetes through all authority granted to it by Congress on a case-by-case basis.

Low- and middle-income workers remain priority targets.

• Speakers underscored that noncompetes continue to burden lower- and middle-income workers by locking them into low-wage roles, chilling job mobility, and suppressing wages. The FTC emphasized that noncompete agreements with employees in these roles will be harder to defend and their rationales will be scrutinized.

Professional services are in the crosshairs.

• Panelists described widespread use of noncompetes among physicians, veterinarians, and other licensed professionals. Noncompetes can restrict service professionals from continuing to work in their communities, often forcing them to relocate from entire regions, accept significantly lower-paying positions, or leave their profession altogether. These restraints can reduce the availability of essential services, deepen shortages in already strained markets, and create substantial financial and personal hardship for affected workers.

Economic evidence lines up against broad noncompetes.

• Economists presented evidence showing that stronger noncompete enforceability corresponds with lower wages, reduced worker mobility, fewer new business formations, and declines in innovation output. Broader harms to the economy are felt through the enforcement of noncompetes against higher-income workers.

The FTC is actively soliciting complaints.

• The FTC has asked the public to submit specific examples and information on noncompete agreements they believe cause harm to workers to aid in enforcement and education. The agency highlighted its dedicated inbox at noncompete@ftc.gov and confirmed their submissions are reviewed for potential investigations.

Practical Points for Employers

1. Review and rationalize agreements. Employers should be ready to show a procompetitive objective (e.g., protecting specific trade secrets or relationship capital) and why a noncompete is necessary for each employee’s role. Generic concerns about revenue or business loss will not suffice.
    
2. Consider less restrictive alternatives. The FTC repeatedly pointed to non-disclosure agreements, customer non-solicitation clauses, and trade secret laws as potential substitutes that are less likely to raise competition concerns. If a noncompete alternative would adequately protect the employer’s interest, requiring an employee to sign a noncompete increases risk.
    
3. Reasonably tailor each noncompete. Applying the same restriction to a wide band of employees is at odds with the FTC’s enforcement motives. Likewise, open‑ended, multi‑county, or multi‑facility radiuses (e.g., tied to any company location) will draw criticism.
    
4. Exercise caution with noncompetes for low-wage workers and healthcare professionals. Imposing noncompetes on low-wage workers without access to sensitive information is more likely to draw attention. Similarly, noncompetes involving healthcare providers, technical staff in concentrated industries, or where there is a documented local labor shortage are likely to pose a significant enforcement risk. The FTC emphasized that healthcare is a priority enforcement area because noncompetes in this area can harm third-parties, such as patients, not just workers.

What to Watch Next

• Education by enforcement. The FTC is actively reviewing complaints and signaled an interest in litigating a clean test case. The long-term goal is “education through enforcement” by bringing enforcement actions against specific businesses with noncompetes that lack justification and have adverse effects. The agency expects this will cause others to take notice and adjust their agreements accordingly.
   
• Heightened oversight of healthcare markets. The FTC signaled particular interest in healthcare markets, where evidence suggests noncompetes may harm both the provider and the patient, disrupt continuity of care, intensify provider shortages, limit patient access, and impede entry by independent or lower-cost competitors. General patient loss may not be a sufficient rationale for an otherwise broad noncompete. Enforcement actions in this space are intended to establish clear precedents for how the FTC will assess patient impact/patient harms for purposes of evaluating the reasonableness of noncompete provisions.
   
• Scrutiny of noncompete use across vulnerable industries. The agency is also expected to focus on industries where noncompetes are used broadly without individualized justification, such as low-wage services, franchised businesses, and other professional services. These markets may provide early test cases for the FTC.

Conclusion

The FTC’s message was loud and clear: employers with unjustified noncompete agreements face significant risk of legal action, especially if the agreement (a) is intended to suppress competition or bargaining power or (b) is unreasonable. Employers should expect the FTC to focus on noncompete covenants that lack any legitimate procompetitive rationale and where narrower tools (such as confidentiality or non-solicitation provisions) could achieve the same protections.

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You can also find more information on the workshop here: Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements | Federal Trade Commission