On September 4 and 5, 2025, the Federal Trade Commission (FTC) took a number of steps which shed light on the direction the Trump Administration intends to go with respect to the executive branch’s enforcement actions against noncompetes.
While the FTC’s formal rule providing a blanket ban on noncompetes was struck down by a Texas-based court in August of 2024, rendering the ban ineffectual nationwide, the Biden-led FTC filed notices of appeal of the federal court decisions preventing the rule from taking effect.
However, on September 5, 2025, the Trump Administration’s FTC officially withdrew its appeals of those decisions. The move indicates that the FTC’s attempted nationwide ban will remain dead in the water for the foreseeable future. Nonetheless, the FTC took certain actions indicating that it would not become inactive in the noncompete policy-making space. One day prior to the announcement, the FTC filed a noncompete-related complaint against Gateway Services Inc., the largest pet cremation business in the U.S. with over 100 locations and nearly 1,800 employees. The FTC issued a proposed consent order which would, among other terms, prohibit Gateway from executing new noncompete agreements with employees or enforcing existing noncompete agreements, with limited exceptions. Gateway would also be required to notify all its employees that their noncompete agreements no longer had effect. With regard to solicitation, Gateway would only be allowed to prohibit employees from soliciting current and prospective customers, with whom the employee had contact or personally provided service in the final 12 months of employment.
Chairman Andrew N. Ferguson, joined by Commissioner Melissa Holyoak, issued a statement with the Gateway order. The statement indicated the FTC’s plan to apply a case-specific approach (a “case-by-case adjudication”) to assessing the lawfulness of noncompete agreements and initiate enforcement actions where deemed appropriate, i.e. the Gateway order.
But the FTC did not stop there. On September 4, the FTC also launched a public inquiry “to better understand the scope, prevalence, and effects of employer noncompete agreements, as well as to gather information to inform possible future enforcement actions.” The public has 60 days (until November 3, 2025) to submit comments to the commission through a link on the announcement page. The announcement quotes Kelse Moen, Deputy Director of the Bureau of Competition and co-chair, “We are asking the public to help shine a light on unfair and anticompetitive agreements.” The Commission encouraged both “current and former employees restricted by noncompete agreements, and employers facing hiring difficulties due to a rival’s noncompete agreements” to share information.
While the FTC has officially abandoned any attempts to revive its blanket ban on noncompetes, employers should stay abreast of its evolving strategy regarding individual enforcement actions in order to maintain best practices in the sphere of restrictive covenants.
