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FTC Warns Healthcare Employers as Noncompete Crackdown Widens

By  |  September 11, 2025

Noncompete agreements are the focus of a new enforcement activity by the FTC this month while states continue to restrict their use. Below are key takeaways for all employers who use noncompete agreements and further background on recent developments.

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    The Federal Trade Commission (FTC) is shifting its strategy from rulemaking to case-by-case enforcement in response to recent court decisions. According to a statement, the agency issued an administrative complaint and proposed consent order against Gateway Services in September 2025, alongside letters sent to healthcare employers and staffing agencies warning them about restrictive practices. The FTC also released a Request for Information (RFI) on employer noncompetes and formally dismissed appeals related to its earlier nationwide rule, which had been blocked by the courts.

    State lawmakers are continuing their own efforts to limit noncompete clauses. Per a statement, new state laws have created a patchwork of rules—some banning noncompetes entirely, while others apply restrictions based on job role or compensation level. This trend means that employers operating in multiple states must stay alert to evolving requirements such as wage thresholds and notice obligations.

    Related: DOJ Antitrust Chief Slams Big Law Tactics, Announces Crackdown

    New FTC Chairman Andrew Ferguson has made labor market practices a central enforcement priority. In his first month, he announced a task force to tackle anticompetitive practices in employment and emphasized that noncompetes fall squarely under FTC jurisdiction. According to a statement, Ferguson described such agreements as “unnecessary, onerous, and often lengthy restrictions” that limit workers’ ability to find new jobs.

    In September, the FTC’s actions included both direct enforcement and broader outreach. The proposed consent order against Gateway Services would end restrictions that barred nearly 1,800 employees in the pet-cremation industry from working elsewhere for one year after leaving. At the same time, letters sent to healthcare providers urged a review of their contracts to ensure compliance with the law. The RFI, which remains open until November 3, 2025, invites public comment on the prevalence and impact of noncompetes, with particular attention to healthcare and lower-wage roles.

    The FTC’s renewed focus comes after years of debate. The agency first studied noncompetes in 2020 and, under former Chair Lina Khan, pursued enforcement actions against industries such as security services and glass manufacturing. In 2024, the FTC attempted to implement a sweeping ban through its Final Rule, but federal courts ruled that the agency had exceeded its authority. With those appeals now abandoned, enforcement has become the main path forward.

    For employers, the implications are clear. Per a statement, the FTC is targeting broadly written or unnecessary restrictions, especially where less intrusive measures—such as trade-secret protections or tailored non-solicitation agreements—could be used instead.

    Source: Wiley