By: Kiera Stubbs*
Abstract
Non-compete agreements between employees and employers are pervasive across industries and demographic groups. Over half of workers bound to a non-compete are hourly workers. Large companies like Amazon and Jimmy John’s garnered national attention for their use of non-competes in low-wage jobs where the traditional rationales for non-competes are unlikely to apply. Non-competes create significant economic and social impacts, raising public policy concerns that non-competes exploit workers and threaten their ability to practice a trade and earn a living. Due to these policy concerns, the common law has limited an employer’s ability to enforce non-competes. In May 2024, the Federal Trade Commission (FTC) banned almost all of these agreements. Various businesses across the country challenged the ban, claiming the FTC lacked authority to ban non-competes.
This Comment examines the non-compete ban and its legal challenges. These legal challenges focus on whether the FTC Act authorizes the FTC to issue the non-compete ban. This Comment will provide an overview of the Act, arguing it authorizes the FTC to regulate unfair methods of competition through substantive rulemaking. Additionally, this Comment will provide an overview of administrative law as the legal challenges to the non-compete ban contest the rulemaking authority of the FTC, an administrative agency. Administrative law is undergoing significant development following the Supreme Court’s decision to end Chevron deference, which potentially threatens the non- compete ban by restricting courts from deferring to the FTC’s statutory interpretation. Despite this major legal shift, this Comment argues that the FTC has rulemaking authority to ban non-competes under current administrative law principles.
* J.D. Candidate, The Pennsylvania State University Dickinson School of Law, 2026. I thank Anthony Wisdo and Professor Stephen Ross for their guidance in writing this Comment, and my family and friends for their support.