In September 2025, the Federal Trade Commission (“FTC”) took steps to crack down on anticompetitive employee non‑competes even as the FTC abandoned the Biden Administration’s efforts to broadly ban them by rule. As a first step, on September 4, 2025, the FTC launched an inquiry seeking the public’s input on the prevalence and use of non-competes by employers, stating that “[w]ith the assistance of the employees and workers most burdened by them, the Trump-Vance FTC intends to uproot the worst offenders and restore fairness to the American labor market.” The next day, the FTC filed a consent decree in an unfair competition action against Gateway Services, Inc. and a subsidiary, premised on its employee non-compete agreements. The consent decree requires Gateway to stop enforcing non-competes binding its nearly 1800 workers. On September 10, FTC Chair Andrew Ferguson issued warning letters to several undisclosed healthcare companies and staffing agencies for “includ[ing] noncompete agreements … in employment contracts that may unreasonably limit employment options for vital roles like nurses, physicians, and other medical professionals.” And, on September 17, the FTC announced a workshop focused on “Protecting Workers from Anticompetitive Noncompete Agreements.” The workshop was to be held on October 8 but has been delayed because of the federal government shutdown.
The warning letters and workshop announcement follow on the heels of the FTC’s vote the week before to accede to the vacatur of the Non-Compete Clause Rule (the “FTC Rule”), which had been promulgated by the FTC under the Biden Administration but enjoined by courts in the Fifth and Eleventh Circuits. The FTC’s acceptance of the FTC Rule’s vacatur brought to an end the federal government’s effort to outlaw most non-competes categorically and returns the FTC to an enforcement policy of case-by-case challenges. The FTC has abandoned the FTC Rule but not its hostility to many overbroad and overreaching employee non-competes. The Gateway consent decree, issuance of the warning letters, launch of the public inquiry into the prevalence of overbroad employee non-competes, and workshop signal the FTC’s commitment to action against what it views as anticompetitive non‑compete agreements. To be sure, the case-by-case approach will require greater vigilance by the FTC than a rule broadly prohibiting such agreements, and the public inquiry launched in early September seeks the public’s assistance in identifying possible enforcement targets. More individual enforcement actions will likely come as the agency ramps up its enforcement initiative.