Back Where We Started: Life After FTC’s Non-Compete Ban
Herrick partner, John H. Chun, was quoted in Law360 discussing the Federal Trade Commission's ("FTC") recent enforcement of non-compete agreements.
The articled noted that in September 2025, the FTC made the decision to "stop defending a rule that would have banned the use of non-compete clauses in most employment contracts and rendered millions of existing clauses unenforceable."
The FTC's current chairman, Andrew Ferguson, strongly opposed adopting the rule during the previous administration, contending it was "an overreach of the agency's authority.
John told Law360 the break from the previous administration's approach to non-competes does not mean the current commission is going to ignore the issue.
"Clearly, there were differing visions between the prior and the current chair as to how to best address abuses regarding non-competes," John said. "The current FTC chair, while he was not in support of a nationwide ban, he appears to be making the curtailment of non-compete abuses a priority, on a much more case by case basis."
John said that non-competes have been largely governed by state law in the past and said the states have been enacting stricter laws that had practitioners concerned about overly restrictive clauses before it became a federal issue.
"Notwithstanding the FTC ban, there had been a very noticeable trend within state jurisdictions of restricting non-competes," John said. "So, regardless of whether or not the FTC ban went into effect, the smart advice and the smart practice among employers was still, in most jurisdictions, to take a close look at their non-competes and their restrictive covenants to make sure they were tailored."
The article highlighted that the FTC sent letters in September 2025, "warning healthcare employers and staffing companies not to include overly broad non-compete restrictions in their employment contracts and urged them to conduct a review to ensure they comply with the law."
John said the FTC's focus on the healthcare space makes sense, given the unique concerns raised by the industry.
"I think most people can appreciate that the patient-doctor relationship is a highly respected, and maybe even sacred one, and therefore overly broad geographic restrictions on doctors that prevent a patient from being able to see his or her physician of choice is a significant burden and one that deserves careful scrutiny," John said.
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