While the Trump administration appears to have little interest in defending the Federal Trade Commission’s regulatory ban on non-competition agreements in employment, the agency recently signaled its intent to scrutinize at least some types of non-competes. Last week, the FTC Chair announced formation of a task force aimed at addressing a variety of unfair labor practices, including non-compete agreements.

The FTC lumped non-competes in with a number of employer practices, including wage fixing and no-poach agreements, and labor contract termination penalties. The non-competition concerns relate to agreements that are overly lengthy and do not protect a legitimate competitive interest. Presumably, this includes non-competes with hourly or other workers unlikely to present a real competitive threat to the business. While the FTC may initiate enforcement action against employers found to have engaged in these practices, it is unlikely that the agency will seek to issue regulations to address such practices.

The FTC’s focus is consistent with arguments behind recent legislative restrictions against non-compete agreements in a number of red states such as Oklahoma and South Dakota. The proponents of these laws believe that non-competes interfere with free labor markets and workers' ability to negotiate the best return for their services. With non-competes under continuing scrutiny from the political left and right, employers should make certain that any agreements they use are narrowly tailored to protect clearly identifiable business interests.

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