· Business Law · 2 min read
The FTC Is Coming for Noncompetes: What Business Owners Need to Know Now
New enforcement actions signal a major shift in how noncompete agreements will be scrutinized going forward.
If your business uses noncompete agreements - whether with employees, contractors, or business partners - the Federal Trade Commission (FTC) just sent a clear message: those agreements are under the microscope.
In April 2026, the FTC announced new enforcement actions targeting companies that use noncompetes in ways the agency views as unfair or anticompetitive. While the FTC’s sweeping 2024 rule banning most noncompetes was struck down in federal court, the agency is now pursuing individual enforcement actions under Section 5 of the FTC Act - a more targeted but still very consequential approach.
Why This Matters
You don’t need a blanket ban for noncompetes to become a serious legal liability. The FTC is now reviewing agreements case by case, and businesses that rely on overly broad or poorly drafted noncompetes may find themselves the subject of a federal investigation - or forced to void those agreements entirely.
What’s in the FTC’s Crosshairs?
The agency is particularly focused on:
- Noncompetes that restrict low- and mid-wage workers
- Agreements used to lock in employees rather than protect legitimate business interests
- Clauses buried in employment or contractor agreements without clear notice or consideration
Foreign investors and business owners operating in the US should also take note - these protections apply regardless of where your company is headquartered.
Practical Steps for Business Owners
Now is a smart time to audit your existing employment and contractor agreements. Ask whether each noncompete is narrowly tailored to protect a real business interest — trade secrets, client relationships, proprietary processes — and whether it’s reasonable in scope, geography, and duration. Agreements that fail that test are increasingly difficult to enforce and may now attract regulatory attention.
State law still governs much of noncompete enforceability, and states like California, Minnesota, and others have already moved to ban or severely restrict them. If your workforce spans multiple states, a one-size-fits-all noncompete almost certainly has gaps.
Ready to review your agreements?
The legal landscape around noncompetes is shifting fast. Whether you want to enforce an existing agreement, revise your templates, or understand your exposure, our team can help.
Capitol Law Partners PLLC
13873 Park Center Road, Ste. 152, Herndon, VA 20171
+1 (202) 440-2272 | capitollawpartners.com
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship with Capitol Law Partners PLLC. For advice specific to your situation, please consult a qualified attorney.
