A New Dawn For The FTC: Eschewing Traditional Antitrust Laws To Challenge Non-Competes Using Section 5 Powers

The FTC set its sights on non-compete agreements as it debuts its powers under Section 5 of the FTC Act—demanding more of employers than is required under traditional antitrust laws.

Through Section 5 of the FTC Act, Congress affords the FTC the unique ability to identify and police against "unfair methods of competition," beyond the contours of other antitrust statutes—namely, the Sherman and Clayton Acts. In the past, the FTC's policy has been to employ Section 5 in a limited set of circumstances invoking "the promotion of consumer welfare." In a statement made on November 10, 2022, the FTC shed its previous policy in favor of a more expansive and amorphous view of its statutory authority under Section 5. According to the FTC's "non-exclusive set of examples of conduct," unfair methods of competition include: (i) mergers and exclusive dealing arrangements that "have the tendency to ripen into violations of the antitrust laws;" (ii) "practices that facilitate