Trump FTC Pursues Non-Compete Enforcement

Client Alert  |  September 8, 2025

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Gibson Dunn attorneys are carefully monitoring these developments and can be found to debate these points as utilized to a selected enterprise or help in getting ready a public remark for submission in response to the FTC’s public inquiry.

On September 5, the U.S. Federal Trade Commission (FTC) introduced a shift in its technique for reining in anticompetitive non-compete agreements.  The FTC voted 3-1 to dismiss its appeals in Ryan, LLC v. FTC, No. 24-10951 (fifth Cir.), and Properties of the Villages v. FTC, No. 24-13102 (eleventh Cir.), and to accede to the vacatur of the Non-Compete Clause Rule by the Northern District of Texas.[1]  Had it gone into impact, the Non-Compete Clause Rule would have banned using non-compete agreements nationwide, impacting 30 million employees by the FTC’s personal estimates.  We beforehand reported the main points of the Final Rule right here.  On September 8, the Fifth Circuit issued an order formally dismissing the Ryan attraction.[2]  The Non-Compete Rule was promulgated in April 2024, however rendered unenforceable nationwide after a workforce led by Gibson Dunn attorneys persuaded the court docket to set it apart.  You can learn extra about Gibson Dunn’s work acquiring that consequence right here and right here.

In his assertion accompanying the dismissals, Chairman Andrew N. Ferguson, joined by Commissioner Melissa Holyoak, emphasised that the FTC stays involved with the anticompetitive results of non-compete agreements, however will shift its focus from defending the Non-Compete Rule to investigating and litigating particular instances.[3]  Commissioner Mark Meador agreed, stating that he “fully support[s] rigorous enforcement against noncompete agreements.”[4]  Chairman Ferguson warned that corporations “in industries plagued by thickets of noncompete agreements” will obtain warning letters from his workplace within the close to time period, “urging them to consider abandoning those agreements.”[5]

In his concurring assertion, Commissioner Meador listed a number of components which can be necessary when evaluating non-competes, which can point out enforcement priorities for the FTC going ahead.[6]  These components embody:

• “[W]age and skill level” of employees required to signal non-compete agreements;
• “Deployment in a distribution network,” the place such agreements could discourage horizontal competitors;
• “Independent contractors,” with whom non-compete agreements “may more closely resemble exclusive dealing”;
• “Likelihood of Free Riding” absent non-compete agreements;
• “Availability of Less Restrictive Alternative[s],” equivalent to non-disclosure agreements, buyer non-solicitation agreements, and intellectual-property protections;
• “Scope and Duration” of the non-compete agreements, with specific concern for agreements lasting longer than one to 2 years, making use of extra broadly than the geographic boundaries of the employer’s present operations or the areas the place the worker carried out common duties, and proscribing an worker’s capability to pursue work in industries or professions unrelated to the corporate’s core enterprise or the worker’s particular function;
• “Market Power” of the employer; and
• “Evidence of Economic Effects,” equivalent to lowered labor mobility or elevated obstacles to entry.[7]

Focus on Enforcement Actions

The FTC has taken rapid steps to implement this shift in priorities.  On September 4, 2025, the FTC filed a criticism towards Gateway Services and its subsidiary Gateway US Holdings, Inc. (collectively, Gateway)—the most important pet cremation companies firm within the United States, with virtually 2,000 U.S.-based staff.[8]  The FTC alleges that, starting in 2019, Gateway adopted a coverage of requiring all new staff to signal a non-compete settlement whatever the given worker’s place or duties.[9]  These agreements sometimes prohibited staff from working within the pet cremation service business wherever within the United States for one 12 months following their employment with Gateway.[10]  The FTC additionally alleges that, in a minimum of one occasion, Gateway responded to the entry of a competing pet cremation enterprise by requiring all its staff in that market to signal non-compete agreements, together with hourly staff who operated the crematories and transported the deceased pets from veterinary clinics to Gateway’s services.[11]  According to the FTC, these non-compete agreements enabled Gateway to suppress competitors within the labor market and to impede the entry and growth of Gateway’s rivals within the pet cremation companies business.[12]

Alongside the criticism, the FTC voted 3-1 to approve a proposed consent order towards Gateway that forestalls Gateway from utilizing non-compete clauses in its employment agreements, with restricted exceptions.[13]  The FTC is taking public feedback on the proposed order, which allows Gateway to enter into non-compete agreements as a part of “the sale of a business, provided that individuals subject to such an agreement have a pre-existing equity interest in the business being sold.”[14]  The proposed order additionally exempts sure particular staff, together with fairness holders, these with outdoors enterprise relationships with Gateway, very senior managers, and people with distinctive entry to confidential data.[15]

The similar day, the FTC’s Joint Labor Task Force, which was launched earlier this 12 months,[16] initiated a public inquiry, calling for feedback from present and former staff and rival employers affected by non-compete agreements.[17]  The request for data particularly recognized “healthcare markets” as an space of concern, stating that putative “harms” from non-competes with medical doctors and nurses “may be particularly acute in rural areas where medical services are already stretched thin.”[18]  Comments are requested by November 3, 2025.

Meanwhile, non-competes proceed to be the topic of intense focus on the state degree.  Dozens of States have enacted laws proscribing non-competes based mostly on components equivalent to occupation or earnings degree, and 4 States—California, North Dakota, Minnesota, and Oklahoma—ban almost all non-competes.  In different States, equivalent to Florida, non-competes are extensively enforceable.

Takeaways

Although the FTC has deserted the Non-Compete Rule, it has clearly signaled an curiosity in difficult employment contracts and agreements between employers that enhance labor market frictions.  Applicable state legal guidelines, furthermore, have seen vital revision in recent times.  It is subsequently crucial that corporations be sure that their hiring and employment insurance policies and practices conform with employment and antitrust legal guidelines.  That consists of:

• Take a listing of restrictive covenants. Contract phrases that may very well be seen as limiting worker mobility may very well be included in employment and different agreements, equivalent to fairness plans and awards, severance agreements, and deal-based paperwork.
• Consider the period, scope, and function of these provisions—together with the teams of staff requested to enter into the provisions—and whether or not the provisions are tailor-made to realize the corporate’s goals.
• Monitor modifications in federal and state regulation, with specific deal with States wherein the corporate has a major headcount.
• Understand that regulators could also be involved in a variety of employees, from low-wage to extremely skilled employees and each staff and unbiased contractors.

Gibson Dunn attorneys are carefully monitoring these developments and can be found to debate these points as utilized to your specific enterprise or help in getting ready a public remark for submission in response to the FTC’s public inquiry.

[1] Press Release, Fed. Trade Comm’n, FTC Files to Accede to Vacatur of Non-Compete Clause Rule (Sept. 5, 2025),

[2] Order at 1, Ryan, LLC v. FTC, No. 24-10951 (fifth Cir. Sept. 8, 2025).

[3] Statement of Chairman Andrew N. Ferguson, Joined by Comm’r Melissa Holyoak, Ryan, LLC v. FTC (Sept. 5, 2025), at 3, (Ferguson Ryan Statement).

[4] Concurring Statement of Comm’r Mark R. Meador, In the Matter of Non-Compete Clauses, Matter No. P201200 (Sept. 5, 2025), at 1, (Meador Statement).

[5] Ferguson Ryan Statement, at 3.

[6] Meador Statement, at 3–5.

[7] Id.

[8] Complaint, In re Gateway Pet Memorial Servs., Matter No. 2210170 (Sept. 4, 2025), ¶¶ 1, 6–7,

[9] Id. ¶ 8.

[10] Id. ¶¶ 1, 10.

[11] Id. ¶¶ 10, 14.

[12] Id. ¶¶ 15–18.

[13] See Decision and Order, In re Gateway Pet Memorial Servs., Matter No. 2210170 (Sept. 4, 2025), § II.,

[14] Id. § I.G.

[15] Id.; see additionally Statement of Chairman Andrew N. Ferguson, Joined by Comm’r Melissa Holyoak, In the Matter of Gateway Pet Memorial Services, Matter No. 2210170 (Sept. 4, 2025),

[16] Press Release, Fed. Trade Comm’n, FTC Launches Joint Labor Task Force to Protect American Workers (Feb. 26, 2025),

[17] Press Release, Fed. Trade Comm’n, FTC Issues Request for Information on Employee Noncompete Agreements (Sept. 4, 2025),

[18] Request for Information, Fed. Trade Comm’n, Request for Information Regarding Employer Noncompete Agreements (Sept. 4, 2025),

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The following Gibson Dunn attorneys ready this replace: Rachel Brass, Svetlana Gans, Michael Holecek, Andrew G.I. Kilberg, Kristen Limarzi, Harris Mufson, Jason Schwartz, John Matthew Butler, and Bridget Amoako.

Gibson Dunn’s attorneys can be found to help in addressing any questions you might have relating to the problems mentioned on this replace. Please contact the Gibson Dunn lawyer with whom you often work, the authors, or any of the next leaders and members of the agency’s Antitrust & Competition, Administrative Law & Regulatory, or Labor & Employment apply teams:

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Christian Riis-Madsen – Brussels (+32 2 554 72 05, criis@gibsondunn.com)

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Labor and Employment:
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Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)
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