{"id":9420,"date":"2026-01-08T23:45:18","date_gmt":"2026-01-08T23:45:18","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/ftc-moves-to-dismiss-its-appeal-of-non-compete-rule-but-makes-clear-its-intent-to-address-illegal-non-competes-in-enforcement-actions\/"},"modified":"2026-01-08T23:45:18","modified_gmt":"2026-01-08T23:45:18","slug":"ftc-moves-to-dismiss-its-appeal-of-non-compete-rule-but-makes-clear-its-intent-to-address-illegal-non-competes-in-enforcement-actions","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/ftc-moves-to-dismiss-its-appeal-of-non-compete-rule-but-makes-clear-its-intent-to-address-illegal-non-competes-in-enforcement-actions\/","title":{"rendered":"FTC Moves to Dismiss Its Appeal of Non-Compete Rule, but Makes Clear Its Intent to Address Illegal Non-Competes in Enforcement Actions"},"content":{"rendered":"\n
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On Friday, September 5, 2025, the Federal Trade Commission (\u201cFTC\u201d) moved to dismiss its appeal of a Texas federal court decision holding that the FTC\u2019s 2024 final rule banning most non-compete agreements was unlawful and exceeded the FTC\u2019s rulemaking authority.<\/p>\n

Although this ends the FTC\u2019s efforts to ban employee non-competes through rulemaking, the FTC has recently made clear that it intends to address unlawful non-competes in other ways, including enforcement actions.<\/p>\n

***<\/p>\n

On September 4, the day before the FTC moved to dismiss its appeal, the FTC announced<\/a> its first non-compete enforcement action under the current Trump administration, challenging the use of non-compete agreements by a pet cremation company, Gateway Services, Inc. (together with its affiliates, \u201cGateway\u201d). The non-competes at issue affected all of Gateway\u2019s nearly 1,800 employees regardless of their role (except in California, where non-competes are banned by state law in most circumstances), and prohibited competition with Gateway anywhere in the United States for twelve months after leaving Gateway (whether voluntarily or involuntarily). In its complaint<\/a>, the FTC alleged that Gateway\u2019s non-compete agreements denied employees \u201caccess to job opportunities,\u201d \u201crestrict[ed] their mobility,\u201d and were therefore anticompetitive under Section\u00a05 of the FTC Act, which proscribes unfair methods of competition. Under the terms of a proposed consent order<\/a>, Gateway would be forced to stop enforcement of all such non-compete agreements and notify all affected current and former employees subject to those agreements that they are not subject to a non-compete.<\/p>\n

On September 4, FTC Commissioners Andrew N. Ferguson and Melissa Holyoak also issued a statement<\/a> that noted their view that, \u201c[a] steady stream of enforcement actions against an unlawful practice provides the markets with transparency about what the agency believes the law requires\u2014transparency that is very important in the application of generally worded statutes like Section 1 of the Sherman Act and Section 5 of the FTC Act.\u00a0.\u00a0.\u00a0. The Commission continues to apply a case-specific approach to assessing the lawfulness of noncompete agreements.\u201d The Commissioners explained their view that, when assessing potentially anticompetitive non\u2011compete agreements, the \u201ccommon law [reasonableness inquiry for assessing non-competes] is at least relevant to determining whether a particular restraint violates the antitrust laws.\u201d The Commissioners also noted that non-compete agreements can be procompetitive in some circumstances.<\/p>\n

Additionally, on the same day, the FTC issued a request for public comments<\/a> (which are due by November\u00a03, 2025) \u201cto better understand the scope, prevalence, and effects of employer non\u2011compete agreements, as well as to gather information to inform possible future enforcement actions.\u201d<\/p>\n

Previously, in February 2025, FTC Chairman Ferguson launched a task force<\/a> to address labor market issues, including non-compete agreements and no-poach agreements between competitors.<\/p>\n

Accordingly, employers should expect that the FTC under the current administration will address non-competes, with a particular focus on non-competes that apply to all workers and\/or that involve low-wage workers. Employers should also be mindful of continued state regulation of non-compete agreements.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

On Friday, September 5, 2025, the Federal Trade Commission (\u201cFTC\u201d) moved to dismiss its appeal of a Texas federal court decision holding that the FTC\u2019s 2024 final rule […]<\/p>\n","protected":false},"author":1,"featured_media":9421,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[651,4736,366,177,299,1385,352,1279,264,693,454,2334,372],"class_list":["post-9420","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-actions","tag-address","tag-appeal","tag-clear","tag-dismiss","tag-enforcement","tag-ftc","tag-illegal","tag-intent","tag-moves","tag-noncompete","tag-noncompetes","tag-rule"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/9420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=9420"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/9420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/9421"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=9420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=9420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=9420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}