Quick Hits

• The FTC is establishing a task force aimed at enforcing antitrust laws in labor markets, including where unreasonable noncompete agreements and other restrictive employment practices implicate antitrust issues.
• Aligning with the Trump administration’s “populist” agenda, the task force is focused on easing “restraints both on the competition side and the consumer protection side that make it harder for Americans to earn a living.”
• Notwithstanding this agenda, it is very unlikely that the FTC will attempt to solve these issues through the rulemaking that was emblematic of the FTC during the Biden administration. At the time, then-FTC Chair Lina Khan championed the FTC’s rule banning noncompete agreements, and then-Member Ferguson called it unlawful and “the most extraordinary assertion of authority in the Commission’s history.”

Chairman Ferguson issued a memorandum directing the heads of the FTC’s Bureaus of Competition, Consumer Protection, and Economics and the Office of Policy Planning to form the “Joint Labor Task Force” that will “prioritize investigation and prosecution of deceptive, unfair, or anticompetitive labor market conduct.”

This new Joint Labor Task Force underscores the “populist” agenda in the new Trump administration, which has echoes of the first Trump administration and even of the Biden administration.

Enforcement Focus

According to the memorandum, the task force will coordinate investigations and enforcement actions across the FTC’s bureaus, create information-sharing processes, and facilitate the exchange of best practices for investigating such conduct. The task force will also work to develop research on anticompetitive conduct and “identify opportunities for advocacy on legislative or regulatory changes that would remove barriers to labor market participation, mobility, and competition.”

Specifically, the memorandum highlighted conduct that falls under the FTC’s jurisdiction in connection with antitrust implications, including:

• “No-poach, non-solicitation, or no-hire agreements”—“where employers agree to refrain from hiring each other’s employees.”
• “Wage-fixing agreements”—“where employers agree to fix the level of wages they offer to employees.”
• “Noncompete agreements”—that “impose unnecessary, onerous, and often lengthy restrictions on former employees’ ability to take new jobs in the same industry after they leave their employment.”
• “Labor-contract termination penalties”—that impede workers from taking new jobs with competitors by imposing “unjustified fees” for workers to end contracts.
• “Labor market monopsonies”—that use “anticompetitive methods to create or maintain significant buyer power in a market for labor.”
• “Collusion or unlawful coordination on DEI metrics”—which the memo stated could “have the effect of diminishing labor competition by excluding certain workers from markets, or students from professional training schools, on the basis of race, sex, or sexual orientation.”

New Policy Focus

The memorandum and announcement of the task force come just days after Chairman Ferguson said the FTC would seek out “restraints both on the competition side and the consumer protection side that make it harder for Americans to earn a living,” during an event hosted by the Washington Reporter and Coalition for App Fairness.

“One of the ways we combat inflation is by making sure that wages stay up,” Chairman Ferguson said during his talk, which was posted to social media. “The FTC is going to focus on this area, potentially, by making sure that unfair competition or deception or unfairness do not suppress Americans’ wages and what they earn as they go about their day-to-day trying to put food on the table for their families. This is going to be one of the priorities of the Trump-Vance FTC.”

On President Trump’s first day in office, January 20, 2025, he designated Ferguson as chairman. Ferguson previously served as a member of the five-member commission.

In April 2024, the FTC voted 3–2 to adopt a rule that would have banned nearly all noncompete agreements in employment, with the Republican commissioners all dissenting, including then-Member Ferguson. Federal courts in Florida and Texas ultimately invalidated and/or enjoined the rule. Both of those decisions are currently being considered on appeal and are very likely to be affirmed. At the time, then-Member Ferguson called the rule unlawful and “the most extraordinary assertion of authority in the Commission’s history.”

While the Trump administration FTC will not pursue rulemaking, Chairman Ferguson’s recent comments indicate the FTC will continue to scrutinize unreasonable noncompete agreements that restrict competition in the labor markets in violation of federal antitrust laws.

Under Chairman Ferguson, the FTC is also continuing its enforcement focus on mergers and acquisitions, announcing on February 18, 2025, that the FTC and the U.S. Department of Justice’s (DOJ) 2023 Merger Guidelines would remain in effect. Those guidelines scrutinize a merger’s impact on labor markets, among other things.

Next Steps

While employers received a reprieve from the FTC’s noncompete ban after it was struck down in court, the FTC’s latest moves show that the Trump administration will continue to efforts to scrutinize noncompete agreements, non-solicit agreements between businesses, and other restrictive covenants that may impact labor markets—but will not attempt to do so through rulemaking.

The memorandum further indicates that the FTC may target employers’ DEI programs or initiatives, alleging that may unlawfully exclude workers. That focus aligns with President Donald Trump’s policy priority to eliminate DEI, as outlined in his recent executive orders.

To increase chances of withstanding scrutiny under the FTC’s latest agenda and under state law, employers should continue to ensure that restrictive covenants are tailored as needed to protect their legitimate business interests, including with respect to confidential information (trade secrets), goodwill in customers and employees, and unfair competition.