The U.S. Federal Trade Commission’s ban on noncompetition agreements (“noncompetes”) may be dead, but its interest in regulating them seems to be still very much alive. For the current administration, that regulation is taking the form of targeted enforcement actions rather than prescriptive rulemaking. Before 2023, the FTC had never enforced the antitrust laws against a noncompete in the employment context. But in the last seven months, the FTC has initiated enforcement actions against pet cremation and building services companies for using “overbroad” noncompetes and no-hires, issued noncompete warning letters to other companies in those same industries and staffing companies, and set up a mechanism for the public to report what it believes to be anticompetitive noncompetes. Recently, the FTC announced its latest enforcement action, a consent order barring a pest-control company from enforcing noncompetes against thousands of current and former workers.
In charting this course, the FTC is not taking the position that all noncompetes are unlawful, only the “unreasonable” ones. In determining whether something is unreasonable, the FTC is applying a variation of the common law reasonableness standard, asking whether the restriction is no greater than necessary to protect an employer’s legitimate interests, and balancing those interests against potential harm to the public. The concept of reasonableness in this context is elastic and does not provide a great deal of guidance for stakeholders. But the FTC’s recent enforcement actions and pronouncements offer some important clues to the FTC’s current focus. We discuss those below along with an overview of how we got here and some practical considerations.
Before 2023, the FTC had not brought any enforcement actions involving noncompetes between employers and employees. That changed with the Biden-era Commission, which settled four such actions, signaling the FTC’s willingness to act in this space.
Under the Biden administration, in April 2024, the FTC promulgated a sweeping rule categorically banning noncompetes nationwide (the “Non-Compete Clause Rule”). The Non-Compete Clause Rule was expansive, with only limited exceptions, such as for noncompetes entered into pursuant to a sale of business, and would have applied both prospectively and retroactively.
The Non-Compete Clause Rule was challenged shortly after it was promulgated and before it went into effect, with a district court issuing a nationwide injunction to stop the FTC from enforcing it. Ryan, LLC v. Federal Trade Commission, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024). The FTC appealed the injunction in October 2024, but ultimately voted in September 2025 to vacate the rule and requested that the Fifth Circuit dismiss its appeal following the change in administration. Ryan, LLC v. FTC, No. 24-10951 (5th Cir. 2024).
New Administration. When Andrew Ferguson was appointed the new chairman of the FTC in January 2025, it was unclear how the Trump administration would address noncompetes. As a commissioner, Ferguson dissented from the FTC’s promulgation of its noncompete ban, disagreeing that Section 5 of the FTC Act categorically prohibits noncompetes “irrespective of their particular effects.” But in that same dissent, he argued that noncompetes are contracts in restraint of trade and subject to the rule of reason under Section 1 of the Sherman Act and Section 5 of the FTC Act. This dissent would later prove to be a roadmap for the FTC’s post-vacatur enforcement posture.
Task Force. On February 26, 2025, Chairman Ferguson issued a memorandum announcing the formation of the FTC’s Labor Task Force, prioritizing the investigation and prosecution of deceptive labor practices and unfair methods of competition. The memorandum identified non-solicitation, “no-poach,” and noncompete agreements as examples of conduct that falls under the FTC’s jurisdiction.
Reasonableness Standard. A few months later, on September 4, 2025, Chairman Ferguson confirmed that the FTC would be pursuing targeted, case-by-case enforcement against noncompetes based on a variation of the common law reasonableness standard followed in many jurisdictions at the state level: “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.”
Gateway. The FTC put this into action in September 2025, targeting Gateway Services and its subsidiary Gateway US Holdings, Inc. (collectively, “Gateway”), a pet cremation business. The complaint addressed Gateway’s use of noncompetes covering almost all of its employees—nearly 1,800 employees ranging from executives to hourly workers—which typically prohibited employees from working in the pet cremation service industry anywhere in the U.S. for one year after leaving Gateway. The FTC found that the purpose of the noncompetes was to shield Gateway from having to compete for employees and avoid having to provide higher salaries and benefits. Under a proposed FTC consent order, Gateway and the FTC reached a settlement where Gateway had to immediately stop enforcing all existing noncompetes, among other measures.
Adamas. The FTC pursued another enforcement action in December 2025 with a complaint against Adamas Amenity Services LLC (“Adamas”), a building services contractor, for its use of no-hire agreements restricting certain employers in New Jersey and New York City from hiring Adamas employees without a penalty. Adamas employees were mainly low-wage employees who did not have specialized skills but performed janitorial, front desk, security and other services. The FTC issued a consent order requiring Adamas to cease enforcing all existing no-hire agreements.
Rollins. The FTC’s latest enforcement action targeted Rollins, Inc., one of the largest pest-control services companies in the United States. On April 15, 2026, Chairman Ferguson, joined by Commissioner Mark Meador, released a statement on In the Matter of Rollins, Inc. explaining the FTC’s rationale and the scope of Rollins’ noncompetes.
According to the FTC, Rollins required the “vast majority” of its workforce of more than 18,000 employees to enter noncompetes prohibiting them from working in the pest-control industry for two years after their employment within 75 miles of the Rollins’ location where the employee worked. Rollins further required all newly hired employees—regardless of their position or responsibilities—to enter into these agreements. In Chairman Ferguson’s words, that “sort of indiscriminate ‘general policy’ approach of requiring every single worker to sign a noncompete agreement irrespective of the worker’s position or responsibilities cries out for scrutiny under antitrust laws.” The FTC also alleged that Rollins would send hundreds of “threatening letters or initiated litigation to enforce” the agreements, often against those who lacked the resources to litigate.
On the procompetitive side of the ledger, the FTC came up “nearly empty.” Rollins’ pest control methods are allegedly publicly accessible on the internet, and much of Rollins’ workforce in the U.S. is composed of pest control technicians whose job duties “do not require access to proprietary information that may justify noncompete restrictions in other circumstances.” The FTC acknowledged that Rollins also employs many customer service representatives and has an interest in protecting customer relationships but noted that Rollins had available to it a “less restrictive alternative of narrowly tailored non-solicitation provisions to vindicate those interests.”
Under the FTC’s proposed consent order, Rollins is prohibited from enforcing noncompetes against more than 18,000 of its current or former workers.
Future Action and Hotline. Following the announcement of the proposed consent order for Rollins, the FTC issued warning letters to 13 other companies in the pest control industry, advising recipients that noncompete agreements deployed elsewhere in the industry may have harms similar to Rollins’ noncompete agreements.
This follows a series of noncompete warning letters that the FTC issued to healthcare employers and staffing companies “urging them to conduct a comprehensive review of their employment agreements—including any noncompetes or other restrictive agreements—to ensure they are appropriately tailored and comply with the law.” The FTC has also signaled in comments made at recent public workshops on noncompetes that the healthcare industry would be one of its areas of focus in noncompete enforcement actions.
The FTC has also asked the public to submit examples of noncompetes to improve the FTC’s understanding of the real-world effects of noncompete agreements and has even set up a dedicated email address for them to do so: noncompete@ftc.gov.
It’s still too early to tell what the FTC’s case-by-case enforcement will fully look like in practice. So far, it has achieved quick settlements and gone after what can be characterized as more “lower hanging fruit,” i.e., companies subjecting thousands of employees to noncompetes regardless of position and regardless of access to sensitive trade secrets. But the FTC’s focus could expand, and it has indicated that blanket noncompetes with nationwide scope may also raise some red flags, especially when combined with other potential issues. In light of these developments, employers should consider taking the following actions: