Written by Bernard (Barry) A. Nigro Jr., Kathy O’Neill, Aleksandr B. Livshits, William A. Reed and Henry Raffel From Fried Frank Harris Shriver & Jacobson LLP on Oct 1, 2025
The Federal Trade Commission (FTC) took a series of actions that made clear that the Trump Administration will vigorously challenge anticompetitive employment non-compete agreements. While the Trump FTC has abandoned its defense of the one-size-fits-all non-compete ban promulgated under the Biden Administration, it is still laser-focused on case-by-case enforcement targeting overly broad restrictions.
- FTC Issues Warning Letters to Healthcare Employers. The FTC sent letters to several large healthcare employers and staffing firms encouraging them to review employment agreements to ensure non-competes and agreements restricting employee mobility are appropriately tailored.[1]
- Request for Information. The FTC issued a request for information inviting input from any employees who have been bound by non-competes as well as from employers facing hiring challenges due to competitors’ restrictions on former employees. The study will allow the FTC to better understand employer non-compete agreements and to gather information that may lead to future enforcement.
- Non-Compete Enforcement Action. The FTC filed a complaint and a proposed consent order against Gateway Services, a pet cremation provider, alleging that Gateway imposed overly broad non-compete agreements on 1,780 employees, regardless of role.[2] The proposed consent order would prohibit Gateway Services from entering into or enforcing most non-compete agreements and limits the scope of non-solicitation of customer provisions in Gateway’s employment contracts.[3]
- FTC Withdraws Litigation Defending Biden Non-Compete Rule. The FTC moved to dismiss its pending appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC—two lawsuits challenging the Biden Administration’s broad rule banning most employment non-competes.[4] Chairman Ferguson and Commissioner Holyoak—both of whom dissented from the issuance of the rule—stated that they moved to withdraw the appeals due to the rule’s “patently obvious” illegality, but stressed that the Trump-Vance Commission will continue to “mov[e] aggressively against unlawful non-compete agreements” on a case-by-case basis.[5] This FTC move effectively ends the possibility of the Biden FTC’s non-compete rule taking effect.[6]
Key Takeaways
The FTC’s recent actions indicate that employment non-competes remain an enforcement priority for the FTC and that they are committing resources to discover and challenge non-competes that are overly broad. Employers should expect continued scrutiny of worker mobility restrictions and consult with counsel to ensure that any contemplated non-competes—particularly in the context of M&A transactions (as such agreements are required to be submitted with HSR filings)—are narrowly tailored to protect legitimate business interests.
