The US FTC undertakes an unprecedented crackdown on noncompete agreements

The Federal Trade Commission (FTC) kicked off 2023 by using Section 5 of the FTC Act to take legal action against three companies and two individuals, forcing them to drop noncompete provisions. This is the first time that the FTC has brought an enforcement action to halt the use of noncompete agreements. Notably, the FTC did so based on its recently announced policy statement on "unfair competition" under Section 5 of the FTC Act. In addition, after bringing these enforcement actions, the FTC announced a newly proposed rule that would ban employers from imposing noncompetes on their workers. This alert summarizes key takeaways from the FTC's new approach to noncompete enforcement. I. The FTC's Focus is Primarily on Restrictions that Limit Employees from Seeking Higher Wages and Better