The Federal Trade Commission (FTC) announced that it is vacating the Biden-era non-compete clause final rule and said that it took steps to dismiss its appeal defending the rule in court. FTC Commissioners voted 3-1 to dismiss the appeal and vacate the noncompete rule. The FTC is still expected to prioritize case-by-case enforcement against unreasonable non-compete clauses. This is evidenced by the fact that the FTC just last week charged Gateway, the largest pet cremation services company operating in the U.S., with violating section 5 of the FTC Act. The FTC asserted that Gateway’s policy, in place since 2019, of requiring all newly hired employees to sign a 12-month post-employment non-compete agreement is an unfair method of competition. In a statement on the Gateway case, FTC Chair Andrew Ferguson noted that the “failure of the Biden [FTC’s] rule does not mean that employers are free to impose non-compete agreements willy-nilly.”
