{"id":78653,"date":"2025-10-13T19:26:05","date_gmt":"2025-10-13T23:26:05","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=78653"},"modified":"2025-10-13T19:26:05","modified_gmt":"2025-10-13T23:26:05","slug":"ftc-noncompete-rule-101325","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/ftc-noncompete-rule-101325\/","title":{"rendered":"FTC Vacates Employee Noncompete Rule"},"content":{"rendered":"

The Federal Trade Commission<\/a> has formally abandoned its 2024 rule banning most post-employment noncompete clauses. Instead, the agency will enforce restrictions on a case-by-case basis.<\/p>\n

The FTC also announced its first major enforcement action under the new plan: the targeting of the nation\u2019s largest pet cremation business.<\/p>\n

The noncompete rule, which the FTC adopted in April 2024 under the Biden administration, prohibited many forms of noncompete agreements deemed to be an \u201cunfair method of competition.\u201d However, nationwide enforcement was effectively blocked after a federal judge in Texas vacated the rule in August 2024, ruling that the FTC lacked the authority to enact such a sweeping regulation.<\/p>\n

Rather than attempting another blanket prohibition, the FTC now intends to enforce actions selectively, specifically targeting noncompete agreements deemed anticompetitive under existing law.<\/p>\n

\u201cAs a result of the FTC\u2019s withdrawal of the 2024 rule, we have seen several states enact legislation to prohibit or restrict geographic noncompetition agreements that are ancillary to an employment relationship,\u201d said attorney Brent Pohlman, a partner in the National Veterinary Law Group at Mandelbaum Barrett PC. \u201cThis is an ever-evolving landscape at the state level, so practice owners and veterinarians need to be aware of changes at the state level while being mindful of federal enforcement.\u201d<\/p>\n

Under the new approach, the FTC filed a complaint and proposed a consent order against Gateway Services Inc. and its subsidiary. Serving more than 17,000 veterinary practices across 100-plus locations, Gateway is the largest pet cremation company in the United States.<\/p>\n

According to the complaint, almost 1,800 Gateway employees \u2014 from executives to hourly workers \u2014 are bound by noncompete agreements that forbid them from working in a pet cremation business anywhere in the United States for one year after leaving Gateway.<\/p>\n

According to the FTC, the agreements are overly broad, harm competition and limit workers\u2019 ability to pursue better opportunities. The agreements also likely impede the opening of competing pet cremation service businesses, including those by Gateway employees.<\/p>\n

Under the proposed consent order, Gateway must:<\/p>\n