# UNITED STATES OF AMERICA (2025)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A985984cb0370551c

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

UNITED STATES OF AMERICA

Federal Trade Commission
WASHINGTON, D.C. 20580

Office of the Chairman

Statement of Chairman Andrew N. Ferguson
Joined by Commissioner Melissa Holyoak
In the Matter of Gateway Pet Memorial Services
Matter Number 2210170
September 4, 2025
The Commission today acts to protect nearly 1,800 workers against unlawful noncompete
agreements. It does so by issuing an administrative complaint and accepting for public comment a
proposed consent agreement with Gateway Services, Inc. and its wholly owned subsidiary,
Gateway US Holdings Inc. (collectively, “Gateway”). 1 I write for two reasons. First, to highlight
the Trump-Vance FTC’s commitment to enforcing the law vigorously against those who demand
their employees enter into noncompete agreements so pernicious and so onerous as to make them
anticompetitive. Second, to address in the context of this matter the fact-specific approach and
considerations that govern the Commission’s evaluation of noncompete agreements.
I
I have long said that the antitrust laws serve to protect workers, and that the Commission
should devote resources to protecting competition in labor markets. 2 Indeed, the launch of the
Commission’s Joint Labor Task Force earlier this year, at my direction, reflects that the agency
feels workers’ pain. 3 “A healthy labor market is critical to the country’s success” but,
unfortunately, “anticompetitive employer labor practices are widespread.” 4 That reality is why the
Task Force is prioritizing rooting out and prosecuting deceptive, unfair, and anticompetitive labormarket practices that harm American workers. 5 These practices include noncompete agreements, 6
which generally are contracts in which an employee agrees not to work for his or her employer’s
competitor after his or her employment.

1
Complaint, In re Gateway Pet Memorial Servs., Matter No. 2210170 (Sept. 4, 2025) (“Complaint”); Decision and
Order, In re Gateway Pet Memorial Servs., Matter No. 2210170 (Sept. 4, 2025) (“Order”).
2
See, e.g., Statement of Comm’r Andrew N. Ferguson Concurring in Part and Dissenting in Part, United States v.
Lyft, Inc., Matter No. 2223028, at 14 (Oct. 25, 2024); Dissenting Statement of Comm’r Andrew N. Ferguson, In re
Guardian Serv. Indus., Matter No. 2410082, at 1 (Dec. 4, 2024) (“Ferguson Guardian Statement”); Concurring
Statement of Comm’r Andrew N. Ferguson, Joined by Comm’r Melissa Holyoak, In re Planned Building Servs.,
Matter No. 2410029, at 1 & n.9 (Jan. 6, 2025) (“Ferguson Planned Statement”).
3
Press Release, FTC, FTC Launches Joint Labor Task Force to Protect American Workers (Feb. 26, 2025),
https://www.ftc.gov/news-events/news/press-releases/2025/02/ftc-launches-joint-labor-task-force-protect-americanworkers (“FTC Labor Task Force Press Release”).
4
Memorandum from Chairman Andrew N. Ferguson, Directive Regarding Labor Markets Task Force, FTC (Feb. 26,
2025).
5
See FTC Labor Task Force Press Release.
6
Id.

The Commission’s history with noncompete agreements is complicated. Before 2023, the
Commission had never enforced the antitrust laws against a noncompete agreement between an
employer and employee. 7 Then, in January of 2023, the Biden Commission settled three
enforcement actions involving noncompete agreements for security guards and glass
manufacturing workers. 8 Those settlements were basically the beginning and the end of the Biden
Commission’s law-enforcement efforts against noncompete agreements. The very next day, the
Commission launched a gargantuan seventeen-month rulemaking that culminated in a final rule
purporting to ban almost every noncompete agreement in the country. 9 After opening the
rulemaking, the Commission brought only one more enforcement action against noncompete
agreements. 10
The Democrat Commissioners’ choice to throw thousands of manhours into the rule was
indefensible. The rule was obviously unlawful. Commissioner Holyoak and I explained at great
length the many ways in which the rule violated the Federal Trade Commission Act (“FTC Act”),
the Administrative Procedure Act, and the Constitution. 11 The courts unsurprisingly agreed, and
the rule was vacated before it went into effect. 12 The rule therefore has not protected a single
worker.
That means that for all the Democrat Commissioners’ rhetoric about the dangers of
noncompete agreements, the Biden Commission produced only four settled enforcement actions
and a failed rule in four years. The immense resources expended on the rule’s promulgation and
defense could have instead been expended on investigating and litigating specific cases that could
have protected thousands of workers. Instead, the Commission spent it all on a rule that protected
none.
The rule’s vacatur does not prevent the Commission from doing what it should have been
doing all along—addressing noncompete agreements through enforcement actions against
companies that misuse them in violation of the law. The Commission’s enforcement actions,
including consent agreements, have a much wider effect than just on the direct subjects of those
actions. They set forth, one reasoned decision at a time, the Commission’s view of what

Dissenting Statement of Comm’r Andrew N. Ferguson, Joined by Comm’r Melissa Holyoak, In the Matter of the
Non-Compete Clause Rule, Matter No. P201200, at 5–6 (June 28, 2024) (“Ferguson Noncompete Rule Dissent”).
8
See Complaint, In re Prudential Security, Inc. et al., Matter No. 2210026 (Jan. 4, 2023); Complaint, In re O-I Glass,
Inc., Matter No. 2110182 (Jan. 4, 2023); Complaint, In re Ardagh Group S.A. et al., Matter No. 2110182 (Jan. 4,
2023).
9
Final Rule, Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024).
10
See Complaint, In re Anchor Glass Container Corp. et al., Matter No. 2110182 (Mar. 15, 2023).
11
Ferguson Noncompete Rule Dissent at 5 (“There is no tradition of federal regulation of noncompete agreements.”);
id. at 9–20 (explaining that the FTC Act did not provide authority for the Rule); id. at 21–34 (explaining that, even if
the statute provided authority for the Rule, Congress could not have delegated its authority to legislate through the
statute); id. at 34–45 (explaining that, in any event, the Rule violated the Administrative Procedure Act); Dissenting
Statement of Comm’r Melissa Holyoak, Joined by Comm’r Andrew N. Ferguson, In the Matter of the Non-Compete
Clause Rule, Matter No. P201200, at 3–9 (June 28, 2024) (explaining that the text and structure of the FTC Act does
not authorize competition rulemakings); id. at 9–14 (confirming by looking to the Commission’s historical
interpretation that the FTC Act does not authorize competition rulemakings); id. at 16–18 (showing that empirical
evidence fails to support the Rule).
12
Ryan, LLC v. FTC, 746 F. Supp. 3d 369 (N.D. Tex. 2024) (vacating the Commission’s Non-Compete Clause Rule).
7

2

circumstances make a particular practice lawful or unlawful under Section 5 of the FTC Act. 13 A
steady stream of enforcement actions against an unlawful practice provides the markets with
transparency about what the agency believes the law requires—transparency 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. In response, market participants will often shift their behavior to comply with the
agency’s articulated understanding of the law.
All this to say that addressing noncompete agreements through continued enforcement
actions will secure real, enduring relief for American workers. Today’s Commission action
rightfully does just that.
II
A
Noncompete agreements have been around, and subject to scrutiny, for more than half a
millennium. Medieval English law generally proscribed them precisely because they interfered
with an individual’s right to ply his or her trade. 14 So pernicious was “the mischief which may
arise … to the party, by the loss of his livelihood, and the subsistence of his family,” and “to the
publick, by depriving it of an useful member.” 15 The dangers of noncompete agreements are
obvious: they limit worker mobility, and as a result can impede workers’ ability to negotiate better
employment terms, among other anticompetitive effects. As a result, all fifty States regulate them
extensively. 16
But not all noncompete agreements are unlawful. As I have said before, “sometimes
noncompete agreements have anticompetitive effects, and other times they have procompetitive
effects.” 17 For example, noncompete agreements can promote investment in employees by
mitigating the risk that a rival will lure employees away. 18 And noncompete agreements can allow
business owners to sell their enterprise profitably because no one would buy a business if the seller
could immediately compete again in the same field. 19 The common law recognized this fact and
abandoned the categorical proscription in the early eighteenth century in favor of a case-specific
See Ferguson Planned Statement at 4; Remarks of Deborah L. Feinstein, The Significance of Consent Orders in the
Federal Trade Commission’s Competition Enforcement Efforts, at 4 (Sept. 17, 2013) (“[C]onsents can provide
significant guidance as to how the Commission views the competitive issues raised by a particular transaction or
conduct.”); see also Daniel J. Solove & Woodrow Hartzog, The FTC and the New Common Law of Privacy, 114
Colum. L. Rev. 583, 585 (2014) (“[C]ompanies look to these [consent] agreements to guide their decisions regarding
privacy practices.”).
14
Darcy v. Allein, 77 Eng. Rep. 1260, 1263 (K.B. 1603) (“[E]very man’s trade maintains his life, and therefore he
ought not to be deprived or dispossessed of it, no more than of his life.”); Corfield v. Coryell, 6 F. Cas. 546, 551–52
(C.C.E.D. Pa. 1823) (including the practice of one’s chosen trade among the privileges and immunities of “citizens of
all free governments”); Golden Glow Tanning Salon, Inc. v. City of Columbus, 52 F.4th 974, 982–84 (5th Cir. 2022)
(Ho, J., concurring) (expounding the history of Anglo-American protections of the right to “pursue one’s occupation
against arbitrary government restraint”).
15
Mitchel v. Reynolds, 24 Eng. Rep. 347 (Q.B. 1711).
16
Ferguson Noncompete Rule Dissent at 3–5.
17
Id. at 35.
18
Id. at 41–42.
19
Id. at 2–3.
13

3

reasonableness test. 20 Indeed, the first application of what we today call the “rule of reason” was
in a case testing the validity of a noncompete agreement. 21
The Commission continues to apply a case-specific approach to assessing the lawfulness
of noncompete agreements. Here, evidence obtained during the Commission’s investigation gives
me reason to believe that Gateway’s particular use of noncompete agreements violates Section 5
of the FTC Act. 22
Gateway is the largest pet cremation services company in the United States. It serves
veterinarian practices and pet owners directly. 23 Gateway operates over 100 cremation facilities
from which the company’s nearly 2,000 U.S.-based employees serve 17,000 veterinary clinics
across North America. 24 In 2019, Gateway began requiring noncompete agreements for all new
employees, regardless of their responsibilities. 25 The Complaint alleges that these agreements are
neither reasonable in scope nor justified to protect a legitimate business interest.
The noncompete agreements prohibit Gateway’s employees—with the exception of those
in California, where such agreements are banned—from working in the pet cremation industry
anywhere in the United States for one year after their separation from Gateway. 26 So although
limited in duration, the vast geographic scope is overbroad as it effectively requires workers to exit
the pet cremation industry within the United States entirely for a year. 27
Gateway’s noncompete agreements also apply indiscriminately to highly compensated
executives and hourly workers in relatively low-skill positions alike. 28 For example, Gateway’s
noncompete agreements apply to drivers who pick up deceased pets, as well as crematory workers
who process ashes and prepare paw print mementos. 29 These workers are critical to providing
cremation services, and they make up the vast majority of Gateway’s employees, 30 but their job
duties do not require extensive training that might justify some noncompete restrictions. 31
Id. at 35 & Section I.B.
Nat’l Soc’y of Pro. Eng’rs v. United States, 435 U.S. 679, 688–89 (1978).
22
15 U.S.C. § 45(b); FTC v. Standard Oil of Cal., 449 U.S. 232, 241 (1980); see also AMREP Corp. v. FTC, 768 F.2d
1171, 1177 (10th Cir. 1985); Boise Cascade Corp. v. FTC, 498 F. Supp. 772, 778–79 (D. Del. 1980).
23
Complaint ¶¶ 6–7.
24
Id. at ¶ 7.
25
Id. at ¶ 8.
26
Id. at ¶¶ 8–9.
27
Courts have found geographically overbroad noncompete agreements unenforceable. See, e.g., NanoMech, Inc. v.
Suresh, 777 F.3d 1020, 1024–25 (8th Cir. 2015) (finding a global noncompete clause facially overbroad and thus
unreasonable and unenforceable); Cottman Transmission Sys., LLC v. Gano, No. 12–cv–05223, 2013 WL 842709, at
*8 (E.D. Pa. Mar. 7, 2021) (holding a three-mile restriction around every location of the employer worldwide
overbroad and unreasonable and limiting the restriction to a three-mile radius around locations in the Greater
Pittsburgh Area); GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327, 1336 (M.D. Fla. 2010) (finding a global
noncompete agreement overbroad).
28
Complaint ¶¶ 8–10.
29
Id. at ¶ 10.
30
Ibid.
31
See Ferguson Noncompete Rule Dissent at 41–42. Cf. Ferguson Guardian Statement at n.17 (“Potential
procompetitive justifications, i.e., legitimate objectives, in these circumstances could include [a company] seeking to
20
21

4

Additionally, Gateway demanded noncompete agreements from workers they terminated
only weeks later, or in areas where Gateway exited operations when it closed dozens of facilities
from 2020 through 2023. 32 Gateway also sought to secure noncompete agreements from
employees it might acquire as part of a transaction. 33 And Gateway knowingly wielded
noncompete agreements to erect barriers in circumstances where it faced what it perceived to be
tougher competition. 34 All of these facts combine to curtail worker mobility and workers’ ability
to negotiate better employment terms, and present an entry barrier in the pet cremation industry. 35
The attuned reader may notice some similarity between my analysis here and the commonlaw reasonableness inquiry applied by many state courts when assessing the lawfulness of
noncompete agreements, which asks whether the restriction is no greater than necessary to protect
the employer’s legitimate interests, and balances those interests against the hardship inflicted on
the employee and any potential injury to the public. 36 That similarity is not a coincidence. The first
time a court ever deployed the rule of reason to assess the lawfulness of an agreement in restraint
of trade was in Mitchel v. Reynolds, an English case involving a noncompete agreement. 37 Even
today, the Supreme Court treats the rule announced in Mitchel as “a standard for testing the
enforceability of covenants in restraint of trade which are ancillary to a legitimate transaction, such
as an employment contract.” 38 This rule of reason for noncompete agreements was well established
in the common law when Congress adopted both the Sherman Act and the FTC Act. 39 The Supreme
Court has since interpreted the FTC Act to incorporate the Sherman Act’s prohibition on
unreasonable restraints of trade, and the Sherman Act incorporates the rule of reason for assessing
whether an agreement is an unlawful restraint of trade. 40 The Sherman Act “invokes the common
recoup any costs for the training of and investment in its workers …”); Giordano v. Saks Inc., 654 F. Supp. 3d 174,
201 (E.D.N.Y. 2023) (challenged no-poach agreement involving collaborative business arrangement not unlawful
under rule of reason where luxury brands agreed not to poach Saks employees who were trained to sell brand products
unless current managers consented or the employee had left Saks at least six months prior).
32
Complaint ¶ 11.
33
Id. at ¶¶ 11–12.
34
Id. at ¶¶ 12–14.
35
Id. at ¶¶ 15–16.
36
See Ferguson Noncompete Rule Dissent at 3.
37
See id. at 2–3 (discussing Mitchel v. Reynolds, 24 Eng. Rep. 347 (Q.B. 1711)).
38
Nat’l Soc’y of Pro. Eng’rs, 435 U.S. at 689.
39
John N. Pomeroy, Jr., A Treatise on Equitable Remedies: Supplementary to Pomeroy’s Equity Jurisprudence § 294
(1905) (“Where an employee stipulates that he will not engage in similar business within a certain territory for a
certain period after the termination of his employment, an injunction will issue to restrain a breach. But where the
restraint is unreasonable and extends beyond anything apparently necessary for the protection of the employer, an
injunction will be refused.”); Frederick Pollock, Principles of Contract: A Treatise on General Principles Concerning
the Validity of Agreements in the Law of England 331–32 (3d ed. 1881) (“The contracts in partial restraint of trade
which occur in modern books are chiefly of the following kinds …. Agreements by a servant or agent not to compete
with his master or employer after his time of service or employment is over…. It seems, therefore, that the only rule
which can be laid down in general terms is that the restriction must in the particular case be reasonable. Whether it be
so is a question not of fact, but of law.”).
40
See FTC v. Motion Picture Advert. Serv. Co., 344 U.S. 392, 394–95 (“[T]he Federal Trade Commission Act was
designed to supplement and bolster the Sherman Act and the Clayton Act—to stop in their incipiency acts and practices
which, when full blown, would violate those Acts, as well as to condemn as ‘unfair method of competition’ existing
violations of them.”) (internal citations omitted); Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 60 (1911)

5

law itself,” 41 and the common law forms the backdrop against which Congress enacted the
Sherman Act. 42 Although Congress did not fix the antitrust laws’ prohibitions to match whatever
the common law said in 1890, 43 the common law is at least relevant to determining whether a
particular restraint violates the antitrust laws. 44 It is thus perfectly appropriate to look to the
common law’s traditional application of the rule of reason to a restraint that under modern doctrine
is subject to the rule of reason. The common-law balancing test originating in Mitchel can be
considered a particular application of the rule of reason, which is itself a balancing of
anticompetitive effects against procompetitive justifications. 45
B
The proposed Order protects workers by forbidding Gateway and all other businesses that
Gateway controls now or at any point during the ten-year term of the proposed Order from entering
into, maintaining, or enforcing noncompete agreements, with limited exceptions. 46 Specifically,
first, the proposed Order permits Gateway to enter into noncompete agreements as part of “the sale
of a business, provided that individuals subject to such an agreement have a pre-existing equity
interest in the business being sold.” 47 This exception is consistent with the longstanding commonlaw rule that noncompete agreements are a valid adjunct to the sale of a business. 48 Second, the
proposed Order also excludes certain individual employees from its prohibition. 49 Gateway
justified the exclusion of each of these individuals in negotiations with Commission staff.
Generally, these individuals represent equity holders, their families, very senior managers, those
with outside business relationships with Gateway, or those who otherwise have more unique access

(announcing the rule of reason as the default standard under the Sherman Act); see also Ohio v. Am. Express Co., 585
U.S. 529, 541 (2018) (“Restraints that are not unreasonable per se are judged under the ‘rule of reason.’”).
41
Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 732 (1988).
42
Standard Oil Co. of N.J., 221 U.S. at 50–51 (1911) (“There can be no doubt that the sole subject with which the 1st
section deals is restraint of trade as therein contemplated, and that the attempt to monopolize and monopolization is
the subject with which the 2d section is concerned. It is certain that those terms, at least in their rudimentary meaning,
took their origin in the common law, and were also familiar in the law of this country prior to and at the time of the
adoption of the act in question.”).
43
Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 899 (2007) (“Just as the common law adapts to
modern understanding and greater experience, so too does the Sherman Act’s prohibition on ‘restraint[s] of trade’
evolve to meet the dynamics of present economic conditions. The case-by-case adjudication contemplated by the rule
of reason has implemented this common-law approach.”).
44
Standard Oil Co. of N.J., 221 U.S. at 60 (“… it was intended that the standard of reason which had been applied at
the common law and in this country in dealing with the subjects of the character embraced by the [Sherman Act] was
intended to be the measure used for the purpose of determining whether, in a given case, a particular act had or had
not brought about the wrong against which the statute provided.”); see also Copperweld Corp. v. Indep. Tube Corp.,
467 U.S. 752, 775 n.24 (1984) (“Moreover, it is far from clear that intracorporate conspiracies were recognized at
common law in 1890.”).
45
See, e.g., Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49 & n.15 (1977) (citing Chi. Bd. of Trade v. United
States, 246 U.S. 231, 238 (1918)); Nat’l Soc’y of Pro. Eng’rs, 435 U.S. at 689; Atl. Richfield Co. v. USA Petroleum
Co., 495 U.S. 328, 342 (1990); Am. Express Co., 585 U.S. at 541–42.
46
Order at Section II.A. The proposed Order also prohibits Gateway from directly or indirectly, communicating to
employees covered by the Order or any prospective or current employer of those covered employees that they are
subject to a noncompete agreement. Id. at Section II.B.
47
Id. at Section I.G (definition of “Covered Non-Compete Agreement”).
48
See Bus. Elecs. Corp., 485 U.S. at 729 n.3; 15 Corbin on Contracts § 80.7 (2024).
49
Order at Section I.F (“Covered Employee does not include the individuals listed in Nonpublic Appendix A.”).

6

to competitively sensitive information. Again, this exception is consistent with the general
common-law rule that noncompete agreements are justified when they go no further than necessary
to protect specific, identifiable, and valid interests of the employer that could not be protected
without the noncompete agreement. 50
The proposed Order additionally limits the scope of Gateway’s non-solicitation
agreements. Specifically, the proposed Order restricts non-solicitation agreements to customers
with whom the employee “had direct contact or personally provided service” in the previous
twelve months of their service at Gateway. 51 These additional restrictions are necessary to ensure
Gateway cannot circumvent the prohibition on noncompete agreements by enforcing onerous nonsolicitation terms that would effectively prohibit employees from starting a competing business.
After all, a broad non-solicitation clause that bars employees from working directly with any
current or potential Gateway customer would severely inhibit the employee’s ability to work in
the industry during the term of the non-solicitation agreement, even in the absence of a noncompete
agreement.
The proposed Order also contains a requirement that Gateway provide current, former, and
new employees with clear and conspicuous notice that they are not subject to noncompete
agreements and about the now-narrower scope of their non-solicitation agreement. 52 Other
standard provisions include compliance reporting on a standard schedule or additional reporting
as the Commission or staff may require, notice to the FTC of material changes to Gateway’s
business, and access for the FTC to documents and personnel. 53
*

*

*

The failure of the Biden Commission’s rule does not mean that employers are free to
impose noncompete agreements willy-nilly. The antitrust laws protect labor-market competition,
and therefore prohibit unreasonable noncompete agreements that limit that competition. Today’s
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.

See Horner v. Graves, 131 Eng. Rep. 284, 287 (C.P. 1831) (English courts upheld noncompete agreements if “the
restraint is such only as to afford a fair protection to the interests of the party in favour of whom it is given, and not
so large as to interfere with the interests of the public.”); 15 Corbin on Contracts § 80.6 (2024) (describing multifactor
reasonableness test); Restatement (2d) of Contracts § 188 (1981) (same).
51
Order at Section II.C.
52
Id. at Section III.B.
53
Id. at Section IV.
50

7

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A985984cb0370551c. Public record. Not legal advice.