Trump FTC Keeps Focus on Labor

The Federal Trade Commission announced a new Joint Labor Task Force that will focus on corporate anti-competitive labor market practices including restrictive covenants such as non-compete agreements and “unlawful coordination on DEI employment metrics.”

Why it matters: The new task force is a clear signal that the Trump FTC will continue its focus on labor issues that began under the Biden administration (and, to a lesser extent, the first Trump administration). 

Top priority of the Trump FTC: Newly-minted FTC Chair Andrew Ferguson made it clear that a focus on labor issues will be the top priority of the FTC throughout the second Trump administration. The new task force will “work to prioritize rooting out and prosecuting deceptive, unfair, and anti-competitive labor market practices that harm American workers.” 

Non-compete agreements back under the microscope: The directive creating the task force cited a variety of widely-used restrictive covenants in employment contracts as potential targets, including:

• Non-compete agreements

• No-poach agreements

• Non-solicitation agreements

But no noncompete ban: Chair Ferguson has indicated that he will not pursue the previous administration’s rule banning non-competes (which is still blocked in court pending further litigation). Instead, the FTC is likely to go after such agreements through enforcement actions.

Tougher merger review continues: Chair Ferguson separately announced last week that the Commission would follow new, more stringent merger review rules implemented by the Biden FTC in 2023. The rules allow the FTC to more easily presume anti-competitiveness and significantly increase disclosure burdens on merging parties. 

The bottom line: After four years of a hard-charging FTC under Lina Khan’s leadership, many employers may have expected a lighter, more lenient touch from the Trump administration. Instead, the new task force signals that the Trump administration’s FTC is likely to continue the path laid out under Khan.