Executive summary

From January 1, 2025 through February 16, 2026, the Federal Trade Commission’s public posture on non-compete agreements (and closely related no-hire/no-poach restraints) was defined by a strategic pivot: away from defending the prior administration’s attempted nationwide non-compete ban in court, and toward targeted, case-by-case enforcement plus information-gathering and “compliance signaling” tools (request for information “RFI”s, warning letters, and workshops).

In public communications, the Commission emphasized (i) a “worker-protection” framing, (ii) a willingness to pursue “unlawful” and “unreasonable” restraints, and (iii) a strong rhetorical focus on healthcare labor markets and staffing firms, even the three cases it chose to litigate were concentrated in building services (no-hire clauses) and a single high-profile pet cremation non-compete case.

The Commission’s case docket featured four headline administrative matters (three in building services, one in pet cremation), all resolved through consent orders in which companies agreed to scale down or remove their non-compete restraints. The building-services matters relied on Sherman Act Section 1 theories (unreasonable restraints of trade) paired with FTC Act Section 5 “unfair methods of competition,” while the pet cremation matter proceeded directly under FTC Act Section 5 against sweeping post-employment non-competes.

A defining legal and institutional event was the Commission’s September 2025 decision to dismiss its pending appeals in the major Non-Compete Clause Rule cases (notably Ryan and Properties of the Villages)—paired with sharply divergent commissioner statements about statutory authority, federalism/state preemption, and feasibility of regulation-by-rule (the Biden era approach)  versus regulation-by-enforcement (the Trump era approach.

Practically, the period’s enforcement outcomes imposed a recognizable “FTC remedy template” for labor restraints: (i) stop using and enforcing the restraint, (ii) void the restriction (or render it “null and void”), (iii) notify workers/customers in writing, and (iv) submit to multi-year compliance reporting and monitoring obligations.

The best forecast, grounded in the Commission’s own 2025–2026 record, is that the FTC will continue to (a) use its requests for information/workshop pipeline to identify targets, (b) prioritize “headline” sectors like healthcare and staffing for scrutiny, and (c) bring additional Section 5 cases (and, where structurally useful, Sherman Act-anchored cases) against restraints that are broad in scope, duration, geography, or coverage of low-wage/non-executive workers—while treating sweeping rulemaking as both politically and legally high-risk.

FTC communications and policy tools in the period

Joint antitrust guidance focused on workers, including non-competes and no-poach

In January 2025, the FTC and U.S. Department of Justice issued Antitrust Guidelines for Business Activities Affecting Workers—a major “competition guidance” document aimed at explaining how the agencies assess labor-related practices under the antitrust laws.

Although the guidelines are broader than non-competes alone (covering wage-fixing, no-poach, information-sharing, and other labor-market conduct), the FTC’s press release explicitly called out “coercive noncompetes” as a practice that can violate the antitrust laws, placing non-competes within a larger “labor competition” enforcement frame.

The guidelines’ publication also underscores a key institutional choice: rather than treating non-competes solely as state contract-law problems, the agencies repeatedly situate them within federal competition analysis—the same conceptual move that underwrote the (ultimately vacated) nationwide Non-Compete Clause Rule.

A formal labor enforcement coordination structure

On February 26, 2025, the FTC announced the launch of a Joint Labor Task Force to coordinate competition and consumer protection efforts focused on labor markets.

The agency’s own description of the task force’s scope is capacious: it explicitly lists noncompete agreements alongside no-poach/non-solicitation/no-hire agreements, wage fixing, deceptive job advertising, misleading franchise offerings, and other forms of alleged labor-market wrongdoing.

Analytically, this matters for non-competes because it shows the FTC building an organizational “through-line”: even after abandoning the nationwide rule in court, the Commission is resourcing a persistent labor program that can feed case selection, investigations, and public advocacy.

September 2025’s three-part strategy: enforcement, information-gathering, and warning letters

The FTC’s most concentrated period of non-compete activity in this window occurred in September 2025, when it:

• brought a high-profile enforcement matter eliminating broad non-competes (Gateway);
• issued a public Request for Information on non-competes as a pipeline for future cases;
• announced that it was stepping away from the nationwide rule’s appellate defense;
• and sent non-compete warning letters to healthcare employers and staffing companies.

FTC encourages workers to report abusive non-compete agreements

On September 4, 2025, the FTC issued a press release launching an inquiry, encouraging workers and rival employers to provide information “to inform possible future enforcement actions.”

The RFI text itself is unusually explicit in mapping its intended function to future cases: it asks for the names of employers using non-competes, rationales given, job roles subject to restraints, salary ranges, scope/duration/geography, enforcement tactics, and harms to workers and rival employers—then states that both public comments and confidential submissions “could inform the FTC’s enforcement priorities and future actions.”

The RFI also targets a specific industry: it highlights potentially “especially significant” harms in healthcare, including effects on nurses, physicians, and patient choice, “particularly acute” in rural areas.

Warning letters emphasizing healthcare and staffing firms

On September 10, 2025, Kelse Moen publicly framed “enforcement against unreasonable noncompete agreements” as a “top priority,” while the Chairman’s office issued warning letters (recipients not publicly enumerated in the record referenced here; therefore unspecified) to “several large healthcare employers and staffing firms.”

The template warning letter (a primary document) is important because it reveals how the Commission was “messaging” potential targets:

• It centers Section 5 investigative authority over “unjustified, overbroad, or otherwise unfair or anticompetitive” non-competes.
• It specifically flags healthcare and staffing companies, warning about restrictions affecting nurses, physicians, and other medical professionals and suggesting harms to patient choice (including rural concerns).
• It avoids accusing recipients of wrongdoing, but it encourages immediate discontinuance and employee notification if a company is using non-competes that are unfair/anticompetitive under the FTC Act.

As a compliance and deterrence tool, this letter strategy resembles “soft enforcement”: it creates documentary evidence that employers were put on notice of the Commission’s stated positions, without (at least publicly in this window) naming targets or initiating actions directly from the letters.

Workshops as public advocacy and evidence-development

The FTC announced a workshop in September 2025, later postponed and rescheduled, and ultimately held it virtually on January 27, 2026. The workshop announcements explicitly place the event in a broader enforcement narrative: they describe it as part of “efforts to highlight” harms and “put business on notice” of enforcement priorities, and they connect it to prior enforcement actions, warning letters, and the RFI.

In prepared remarks for the workshop, the Chairman described the RFI as a “first step toward enforcing the antitrust laws” against illegal non-competes and framed the workshop’s purpose as improving understanding of real-world effects so the Commission can prioritize the most harmful restraints.

Enforcement and litigation docket in the period

How the FTC’s “case-by-case” pipeline works in practice

Step 1: Gather and analyze complaints, whistleblower reports, etc.

Step 2: Investigate via document demands, interviews, market analysis.

Step 3: File an administrative complaint under FTC Act Sec. 5 or sometimes Sherman Act theories

Step 4: Publish a proposed consent agreement for public comment

Step 5: Issue a final consent order that stops the non-compete restraints, requires employers to provide notice to employees, and requires compliance reporting.

Step 6: Monitor & enforce the consent decree.

The Gateway pet cremation case

Why this case matters

The Gateway matter is the FTC’s most prominent pure non-compete enforcement action in this time window (as opposed to no-hire/no-poach restraints). It also functions as a proof point for the Commission’s post-rule stance: even while abandoning the nationwide ban’s appellate defense, the FTC simultaneously showcased an ability to pursue “unlawful” non-competes through targeted Section 5 enforcement.

The non-compete terms alleged in the complaint

The administrative complaint alleges that, beginning in 2019, Gateway adopted a policy requiring non-compete agreements for all newly hired employees and that most U.S.-based employees (except those working in California) were subject to them. Most importantly for “problematic language,” the complaint describes the core restraint as prohibiting an employee from working “in the pet cremation service industry anywhere in the United States.”

The complaint further alleges the agreements were imposed without individualized consideration of employee roles, covering both executives and hourly workers, including operations and customer-service personnel.

Competitive theories in the complaint

Unlike the building-services no-hire matters, the Gateway complaint does not present itself as primarily a Sherman Act “market allocation” case. Instead, it alleges that Gateway’s post-employment non-competes are unfair methods of competition under FTC Act Section 5.

The complaint’s competitive-harm narrative is built on two linked mechanisms:

1. Labor-market bargaining harm: the non-competes allegedly worsen employee bargaining leverage, restricting job access and mobility and likely causing lower wages/benefits and other hardships.
2. Product-market/entry harm: the non-competes allegedly suppress competition by impeding entry and expansion of competing pet cremation businesses, including by discouraging former employees from starting competitors.

A particularly transaction-relevant allegation (important for M&A and private equity analysis) is that Gateway allegedly viewed non-competes as “nice to have” for potential employees it might acquire in markets where it expected to consolidate operations and terminate employees—suggesting a strategic use of restraints to manage post-acquisition labor dynamics.

The exact relief in the FTC’s final order

The final consent order (issued as an FTC administrative order) imposes several categories of relief. The description below tracks the order’s structure and uses only what the document itself specifies.

Core injunction (stop using and enforcing covered non-competes). The order requires Gateway to cease and desist from entering into, maintaining, enforcing, or threatening to enforce “Covered Non-Compete Agreements” with “Covered Employees.” It also prohibits Gateway from telling covered employees or their prospective/current employers that a covered employee is subject to a covered non-compete.

Immediate stop-enforcement and no penalties. The order requires Gateway to immediately stop enforcing existing covered non-competes in the United States and bars it from requiring covered employees to pay fees or penalties relating to covered non-competes.

Worker notice and onboarding notice. The order requires Gateway to deliver a notice letter (Appendix B) and a copy of the order to covered employees within a specified period, and it also requires an “IMPORTANT” notice to be provided to new covered employees stating their employment will not be subject to a non-compete.

Limits on associated non-solicitation constraints. A notable feature of the remedy is that it does not merely remove non-competes; it also restricts how Gateway can limit solicitation of customers, allowing narrow customer non-solicitation limits tied to direct employee contact within the last 12 months of employment.

Compliance infrastructure for a decade. The order requires Gateway to distribute the order and complaint to specific internal personnel, obtain acknowledgments, keep records demonstrating compliance, and submit recurring compliance reports over a ten-year horizon.

Carve-outs relevant to M&A and equity-related arrangements. The order’s definitions narrow the scope of what counts as a “Covered Non-Compete Agreement” by excluding certain non-competes entered with directors, officers, or senior employees in conjunction with equity grants, and by allowing non-competes in conjunction with a sale of a business where the individual subject to the agreement has a pre-existing equity interest in the business sold.

What the FTC said publicly about why it chose this case

In a public statement supporting the matter, the Chairman emphasized a “fact-specific approach” to evaluating non-competes and tied the matter to the Joint Labor Task Force’s mission, framing the case as targeting particularly onerous restraints affecting nearly 1,800 workers.

Industry patterns and targeting

This section evaluates industry patterns in the FTC’s January 2025–February 2026 non-compete/no-hire activity, focusing on private equity, healthcare, tech, franchising, and staffing/temp agencies (as requested). Where the public record does not specify an industry attribute, it is marked unspecified.

What the docket actually targeted

Building services is the most consistently targeted sector (enforcement). Three of the period’s major enforcement actions (Guardian final order; Planned complaint/final order; Adamas complaint/final order) concern building services contractors using contractual no-hire restraints in customer agreements.

These cases share a common labor-market structure: building owners/property managers and a contracted service provider can be competitors for the labor of janitors, concierge workers, maintenance technicians, and security personnel; the no-hire provisions are framed as limiting job mobility and suppressing wages and working conditions.

Pet cremation is the period’s only major pure non-compete sector (enforcement). Gateway is described as a pet cremation company operating across the U.S. and Canada, and the complaint alleges it is “by far” the largest such company in the United States.

Healthcare

Healthcare appears as a primary rhetorical priority but not as a named enforcement target in this period’s public docket. The RFI text says harms “may be especially significant in healthcare markets” and calls out nurses and physicians, including rural concerns.

Likewise, the warning letter template explicitly states the FTC is focusing resources “particularly in the healthcare sector,” and it warns that non-competes can restrict patients’ choices and be especially harmful in rural areas. [23]

However, within the publicly identifiable enforcement matters in this window, there is no named healthcare employer subjected to a non-compete complaint/order (as of Feb 16, 2026) in the sources reviewed here. Therefore, the enforcement targeting of healthcare in this window is best described as signaling and pipeline-building, not yet docket-realized.

Staffing and temp agencies

Staffing/temp agencies are explicitly included in the FTC’s September 2025 warning-letter initiative, and the press release frames staffing firms as among the addressees (recipients unspecified). But, as with healthcare, the available public record here does not identify a subsequent staffing-firm enforcement action between September 2025 and February 16, 2026 that is explicitly tied to those letters. The most defensible conclusion is that staffing agencies were treated as a priority surveillance category (letters + public notice), with enforcement outcomes unspecified in the public docket during this window.

Private equity

No enforcement action in this window is publicly framed as targeting a private equity sponsor as a sponsor for imposing non-competes, and none of the enforcement press releases identifies “private equity” as the relevant industry. Therefore, private equity as a target is unspecified in the public record for this period.

That said, the Gateway complaint contains a particularly important allegation for private equity and M&A practitioners: it alleges Gateway treated non-competes as a tool in transaction contexts, including for employees it might acquire where it expected to consolidate operations and terminate employees. [55]

In addition, the Gateway final order includes express carve-outs tied to equity (certain senior employees/directors/officers with equity and non-competes in connection with sale of a business where the individual has a pre-existing equity interest). These carve-outs are not labeled “private equity,” but they map directly onto common PE/M&A structures (roll-ups, add-ons, equity incentives, and sale-of-business covenants).

Tech

Within the sources in scope, there is no FTC non-compete/no-hire enforcement action between January 2025 and February 16, 2026 that is publicly identified as involving a technology company; therefore tech targeting is unspecified in the public record for this period.

The bigger “tech relevance” here is structural: the FTC’s shift to case-by-case labor enforcement (rather than a categorical ban) creates heterogeneous risk profiles across tech firms depending on local labor markets, worker types, and restrictive covenant design—but that is an inference from strategy, not a docket-based finding.

Franchising

The Joint Labor Task Force announcement lists “misleading franchise offerings” among labor-market practices it will focus on, but it does not identify franchise no-poach/no-hire/non-compete provisions as an enforcement target in the same direct way it does for noncompetes and no-poach agreements generally.

Between January 2025 and February 16, 2026, no FTC enforcement action in the sources reviewed here is publicly identified as a franchisor/franchise system non-compete or no-poach matter; therefore franchising is best characterized as mentioned in the FTC’s labor-market frame, but not docket-targeted in the publicly visible enforcement record for this window.

Legal theories and statutory bases

The FTC’s preferred enforcement posture: FTC Act Section 5, sometimes anchored to Sherman Act violations

Across the period’s enforcement matters, FTC Act Section 5 “unfair methods of competition” is the common denominator.

• Gateway: the complaint charges that the non-competes are unfair methods of competition in violation of Section 5.
• Planned: the chair statement explicitly describes the FTC as charging both Sherman Act Section 1 violations and Section 5 unfair methods of competition.
• Adamas: the complaint says the no-hire agreements are unreasonable restraints of trade under Sherman Act Section 1 and thus unfair methods of competition under Section 5, and also alleges an independent Section 5 theory.

That pattern reveals an analytical design choice: for horizontal or quasi-horizontal labor market restraints (no-hire/no-poach), the FTC often frames the case as classic antitrust (Sherman Act Section 1) plus Section 5, potentially to strengthen doctrinal legitimacy. For unilateral or employer–employee post-employment non-competes, the Gateway case shows a willingness to proceed directly under Section 5 as “unfair competition,” building a labor-focused Section 5 jurisprudence.

Rulemaking authority and federalism: why the FTC changed course on the nationwide rule

A central legal question in this period is the FTC’s authority to issue the Non-Compete Clause Rule as a binding competition rule. While the nationwide rule was finalized in 2024 (outside this window), in September 2025 the Commission chose to stop defending it on appeal and to accede to vacatur.

The chairman’s September 5, 2025 statement frames the abandoned rule as:

• banning almost all post-employment non-compete contracts, prospectively and retrospectively;
• preempting state laws across the country;
• and redistributing large amounts of wealth as an economic policy intervention—claims offered as reasons the rule’s legality was doubtful.

The RFI’s text also explicitly characterizes the Biden-era rule as having “exceeded the Commission’s regulatory power,” and it points to a district court order stopping enforcement of the rule, specifically citing Ryan, LLC v. FTC (N.D. Tex. 2024) (outside window but directly relevant as the cited opinion).

A key institutional implication is that, for the Commission’s 2025–2026 leadership, non-competes remain an enforcement priority, but the “command-and-control” solution of a categorical ban by rule is treated as legally unstable and politically fraught (including because of state preemption and administrative-law doctrines).

Competing views inside the Commission: enforcement versus rulemaking

Commissioner statements in September 2025 illustrate differing legal and normative theories about how to address non-competes.

• The chairman’s statement argues the rule was unlawful and overreached into state-law territory.
• Mark R. Meador argued for a “balanced enforcement approach,” stating non-competes are neither uniformly benign nor invariably harmful and endorsing rigorous enforcement under Sherman Act Sections 1 and 2 and FTC Act Section 5 when the law is violated.
• Commissioner Slaughter dissented from abandoning the appeals, emphasizing the prior rulemaking record and rejecting the pivot to a one-off settlement plus RFI as a substitute for a broad rule.

This triad reflects a deeper legal disagreement: whether the FTC’s mandate is best executed through general rules (even if litigated aggressively) or through incremental enforcement that builds a Section 5/common-law-like body of precedents around especially abusive restraints.

Practical impacts on employers, workers, and transactions

Common compliance takeaways for employers

Even though non-compete law remains heavily state-driven, the FTC’s actions in this period generate several practical compliance lessons for employers who want to reduce enforcement risk (and for counsel who want to structure restraint packages that look less like the FTC’s “bad facts” cases).

Breadth triggers attention. The Gateway case is built around allegations of non-competes imposed broadly across roles (including hourly workers) and with expansive market/geographic scope. Employers using standardized restraints without role-by-role justifications are directly within the RFI’s and warning letters’ critique.

Post-employment restrictions are treated as competition restraints, not just contract terms. The FTC’s complaints describe restraints as mechanisms that reduce labor-market bargaining and suppress competition and entry—framing that employers should anticipate if they end up under investigation.

Expect “notice + monitoring” remedies if you settle. The FTC’s final orders repeatedly require notice to affected workers/customers and multi-year compliance reporting obligations. This changes the cost-benefit analysis of “quiet” restrictive covenant programs: even if an employer stops using a non-compete voluntarily, a consent order can force broad, trackable unwinding and compliance overhead.

Effects on workers: mobility, bargaining leverage, and “job lock”

In all major matters and in the RFI, the FTC ties restraints to reduced bargaining leverage and job mobility, including lower wages/benefits and personal hardship (e.g., being forced to leave a job when a building changes contractors in the no-hire context).

The building-services matters are particularly illustrative of a labor-market dynamic that can be underappreciated in traditional non-compete discussions: a worker may face a forced separation not because the worker wants to leave, but because a building owner changes vendors and the contract’s no-hire penalties impede continuity of employment at the same physical workplace.

Transaction and private equity impacts: how the FTC’s enforcement posture changes deal risk

The period’s most direct transaction-relevant evidence is in Gateway:

• The complaint portrays non-competes as part of how the company evaluated acquisitions and consolidation, including in markets where it expected to terminate employees.
• The final order’s definition of “Covered Non-Compete Agreement” contains carve-outs that permit certain non-competes connected to equity and bona fide business sales where the individual has a pre-existing equity interest, implicitly distinguishing those restraints from “routine employee” non-competes.

For private equity and M&A actors, this suggests a practical dividing line likely to matter in future cases:

• Higher enforcement risk: non-competes imposed on broad populations of non-executive employees post-acquisition (especially where used to manage labor churn during consolidation).
• Lower (not zero) enforcement risk: narrowly tailored sale-of-business non-competes tethered to genuine equity ownership and legitimate goodwill transfer, consistent with the Gateway order’s carve-outs.

Secondary-source perspectives that sharpen the legal debate

The post-rule landscape has generated substantial scholarly debate about the FTC’s authority and about the proper antitrust framework for non-competes and “functional non-competes.”

• A Harvard Law Review Blog post in January 2025 defended the FTC’s Non-Compete Clause Rule and grounded it in Section 5 UMC authority, capturing the pro-rule perspective during the early months of this period. [82]
• A Fordham Law Review note in 2024 analyzes employment non-competes through antitrust’s rule-of-reason lens and explicitly situates the FTC’s efforts within debates over labor mobility and the scope of antitrust protection. [83]
• A Yale Law Journal piece highlights “confidentiality agreements that act like noncompetes,” which closely maps to enforcement strategies that might migrate away from explicit non-compete clauses and toward other post-employment restrictions that can produce similar lock-in effects. [84]

Forecast of Likely FTC Activity on Non-Compete Agreements

Based on the Commission’s actions and communications to the public so far, it is very likely that in the next few year we will see the following:

1. FTC is likely to go after large employers with overbroad non-compete agreements that apply to all of their workers, regardless of title or pay (especially hourly workers);
2. FTC is likely to identify additional targets for enforcement through its request for information that asked employees and competitors to identify companies that have abusive non-compete agreements;
3. FTC will pay special attention to non-compete abuse in the healthcare and staffing industries;

Unfortunately, FTC’s focus on big offenders will leave employees of smaller or mid-size businesses who are burdened by unreasonable non-compete agreements to fight their own battles in court.

Many employees in Texas have non-compete agreements and courts often enforce them. Therefore, employees should not assume that their non-compete agreements are automatically invalid or valid, but should talk to a qualified attorney before taking any action that may trigger non-compete enforcement.

Leiza Dolghih is the founder of Dolghih Law Group PLLC.  She is board certified in labor and employment law and has 20+ years of experience in commercial and employment litigation, including trade secrets and non-compete disputes. You can contact her directly at leiza@dlg-legal.com or (214) 531-2403.