Ghosts, goblins and pet cremation: an FTC Halloween special

Halloween is almost here! Few things are spookier than a Federal Trade Commission enforcement action. We are beginning to see where the FTC’s priorities are landing. Although the FTC has abandoned attempts to ban noncompete agreements wholesale, it has committed to bringing enforcement actions where noncompete agreements are used to stifle competition.

The ghost of the FTC rule

You may recall that in April 2024, under then-President Joe Biden, the FTC issued a rule banning noncompete agreements nationwide. Current FTC Chairman Andrew N. Ferguson and Commissioner Melissa Holyoak had dissented at the time the rule was promulgated. They argued that the FTC lacked statutory authority to issue such a sweeping rule.

The rule was swiftly challenged by the business community and, before it took effect, was held unlawful and unenforceable by several courts. Many of these cases were pending on appeal when the FTC dropped the cases on Sept. 5, 2025.

But here’s where things get spooky: just because the rule is in the grave doesn’t mean noncompete enforcement is buried alongside it.

Rise of enforcement actions

On Sept. 4 — one day before officially abandoning the rule — the FTC filed an enforcement action against Gateway Pet Memorial Services, the nation’s largest pet cremation business.

The FTC alleged that Gateway imposed noncompete agreements on almost all its employees, prohibiting them from working anywhere in the pet cremation industry in the United States for one year after leaving the company. These agreements applied to everyone from highly compensated executives to hourly facility laborers — the majority of Gateway’s 1,800 employees.

Under the proposed consent order, Gateway must:

• immediately stop enforcing all existing noncompete agreements,
• notify employees that they are no longer subject to noncompete restrictions, and
• refrain from entering into, maintaining, or enforcing future noncompete agreements (with limited exceptions).

The message was clear: the FTC may have abandoned its blanket rule, but it wasn’t abandoning workers. Like a ghost that refuses to leave a mansion, noncompete enforcement is here to stay (but in a different form).

Spooky warning letters

On Sept. 10, FTC Chairman Ferguson issued warning letters to several large health care employers and staffing firms. These letters urged companies to conduct comprehensive reviews of their noncompete agreements affecting nurses, physicians, and other medical professionals.

The FTC is concerned with agreements that limit health care professionals’ employment options and thereby restrict patients’ choices for medical care, especially in rural areas where medical services are already scarce.

Upcoming FTC workshop

The FTC is scheduled to host a workshop, “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements,” on Oct. 8. According to the FTC, the workshop will feature statements from FTC commissioners, victims of anticompetitive noncompete agreements, and experts in the field. We will watch to ensure we are ready to give you the most up-to-date advice on how to protect your business from all angles.