As previously reported, the Federal Trade Commission (FTC) launched a Joint Labor Task Force on February 26, 2025, to “prioritize rooting out and prosecuting unfair labor-market practices that harm American workers.” However, on September 5, 2025, the FTC officially withdrew its notice of appeal of cases striking down its rule prohibiting noncompete agreements. 

This latest reversal by the FTC was hardly surprising given that then-commissioners Andrew Ferguson and Melissa Holyoak dissented when the rule was originally proposed. Despite this opposition to the blanket ban on noncompete agreements, Chair Andrew Ferguson stated that the current FTC will still use antitrust laws as a “scalpel” to prosecute the abuse of noncompetes where appropriate. By way of example, the day before the FTC dropped its appeals on the noncompete rule, the FTC took action against Gateway Services, Inc., the country’s largest pet cremation business, requiring the company to cease enforcing noncompete agreements against their nearly 1,800 employees. The noncompete agreements bound employees ranging from highly compensated executives to hourly, facility laborers, typically prohibiting employees from working in the pet cremation service industry anywhere in the United States for one year after leaving Gateway. Some of the notable terms of the FTC’s proposed consent order include:

• Gateway is prohibited from entering into, maintaining, or enforcing noncompete agreements, with limited exceptions, or communicating to an employee or any other person that any former employee is subject to a noncompete agreement;
• Gateway must provide notice to employees that they are no longer subject to a noncompete agreement;
• Gateway cannot prohibit employees in any employment agreement from soliciting any prospective, current, or former customers of Gateway, except with respect to those current or prospective customers with whom the employee had direct contact or personally provided service in the last 12 months of their employment with Gateway.

This latest action is similar to previous FTC enforcement actions against noncompete agreements in 2023 under the Biden Administration. In a statement issued concurrently with the Gateway proposed consent order, Chair Ferguson (joined by Commissioner Melissa Holyoak) stated that “the failure of the Biden Commission’s [noncompete] rule does not mean that employers are free to impose noncompete agreements willy-nilly” and that “the proposed Order makes clear that the Trump-Vance Commission will act as a cop on the beat, enforcing the antitrust laws against unlawful noncompete agreements to protect American workers, rather than trying to legislate them away.” Democratic Commissioner Rebecca Slaughter, while briefly reinstalled to her position the week of September 2, 2025, issued a dissenting statement in which she supported the action against Gateway’s noncompete agreements, but stated that the order did not address the underlying structural problem of the serial acquisitions by a private equity firm, which allowed Gateway to execute its non-compete strategy.

At the same time, the FTC also issued a Request for Information Regarding Employer Noncompete Agreements (RFI) with the stated purpose of “launch[ing] 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 press release issued with the RFI also states that “[m]embers of the public including current and former employees restricted by noncompete agreements, and employers facing hiring difficulties due to a rival’s noncompete agreements, are encouraged to share information about the use of noncompete agreements.” The FTC is seeking assistance from the public “to help shine a light on unfair and anticompetitive agreements” and “to inform possible future enforcement actions.” The public will have until November 3, 2025, to submit comments in response to the RFI.

While the FTC under the current administration will no longer seek to uphold the proposed rule banning nearly all noncompete agreements, the agency will still vigorously pursue anticompetitive noncompete agreements on a case-by-case basis. Thus, even if companies do not need to comply with the FTC’s proposed rule prohibiting all noncompete agreements, they can still be targets of FTC investigations and enforcement actions if current employees, former employees, and/or competitors complain to the FTC about overbroad and onerous noncompete agreements. The Hunton team will continue to monitor activity in this evolving space where antitrust and labor law intersect.