FTC Orders Gateway Services to End Noncompetes & Launches Public Inquiry

Key Takeaways

• FTC Enforcement: The agency ordered Gateway Services, the largest U.S. pet cremation business, to stop enforcing noncompete agreements affecting nearly 1,800 workers.
• Broad Restrictions: Employees, from executives to hourly laborers, were bound by one-year nationwide noncompetes that barred them from joining or creating competitors.
• Antitrust and Labor Risk: The FTC argued the agreements unfairly restricted job mobility, suppressed competition, and harmed wages and benefits.
• Consent Order Terms: Gateway must void all noncompetes, notify employees, and refrain from imposing future agreements with limited exceptions.
• Regulatory Focus: The Trump-Vance FTC, through its Joint Labor Task Force, is prioritizing action against anticompetitive labor practices.

Deep Dive

The Federal Trade Commission has taken aim at restrictive labor practices, ordering Gateway Services, the nation’s largest pet cremation company, to end its use of noncompete agreements that bound nearly 1,800 workers across the United States.

According to the FTC’s complaint, Gateway required almost all employees, regardless of their position or compensation level, to sign noncompetes that prevented them from working in the pet cremation industry anywhere in the country for one year after leaving the company. The agreements were adopted in 2019 and applied equally to executives and hourly facility laborers, who make up the majority of Gateway’s workforce.

The FTC alleges the restrictions unfairly tilted bargaining power toward the employer, discouraged competition, and potentially prevented new pet cremation businesses from entering the market. In addition to raising antitrust concerns, the Commission noted the agreements harmed workers by limiting their ability to seek better wages, benefits, or entrepreneurial opportunities.

Under the proposed consent order, Gateway must immediately stop enforcing all existing noncompete agreements, notify employees that they are no longer bound by the restrictions, and refrain from entering into similar contracts in the future. The order also clarifies that Gateway may only restrict solicitation of current customers when tied to an employee’s direct service relationships in the prior year.

“The Commission will stand up for workers and ensure that they receive all the benefits that flow from robust competition between employers,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition.

The action reflects the broader direction of the Trump-Vance FTC, which has formed a cross-agency Joint Labor Task Force to target anticompetitive practices in labor markets. Officials emphasized that this case is part of a continuing effort to dismantle unfair employment agreements that undermine job mobility and wage growth.

At the same time, the FTC announced a broader initiative to collect public input on the use of noncompete agreements. In a Request for Information, the Commission invited current and former employees, as well as employers, to submit details about how noncompetes affect mobility, hiring, and wages.

“Unreasonable noncompete agreements have proliferated for too long in the dark,” said Kelse Moen, Deputy Director of the Bureau of Competition. The public has 60 days to submit comments through Regulations.gov, with responses due by November 3, 2025. The inquiry could inform further enforcement actions and potential rulemaking.

While the subject matter (a pet cremation company) may seem niche, the precedent is much larger. Regulators are increasingly using antitrust and labor frameworks to reshape employment compliance across industries. For GRC professionals, labor and employment risks can no longer sit solely in HR’s domain. They must be incorporated into enterprise compliance, risk, and governance strategies to avoid being blindsided by enforcement actions in an area of growing regulatory focus.

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