The Federal Trade Commission took enforcement action Tuesday against Gateway Services, Inc., the nation's largest pet cremation company, ordering it to stop enforcing noncompete agreements that restricted nearly 1,800 workers from seeking employment in the industry.
The FTC filed a complaint against Gateway Services and its subsidiary Gateway US Holdings, Inc., alleging the companies imposed sweeping noncompete clauses on almost all employees regardless of their position or responsibilities. The agreements typically prohibited workers from taking jobs anywhere in the pet cremation service industry across the United States for one year after leaving Gateway.
Under a proposed FTC consent order, Gateway must immediately cease enforcement of all existing noncompete agreements. The action will free employees ranging from highly compensated executives to hourly facility laborers, who make up the majority of Gateway's workforce.
"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 antitrust laws protect workers from noncompete agreements that harm competition, including by preventing workers from switching to better-paying jobs or starting their own businesses."
Gateway operates more than 100 locations servicing 17,000 veterinary clinics across North America, making it the dominant player in the pet cremation market. According to the FTC's complaint, the company adopted its blanket noncompete policy in 2019 for all newly hired employees, applying the restrictions uniformly without regard to workers' access to confidential information or competitive positioning.
The enforcement action represents a continuation of labor market competition enforcement under the Trump-Vance administration. The FTC has prioritized investigating anticompetitive labor practices through the creation of a cross-agency Joint Labor Task Force designed to combat unfair employment agreements.
"Under the leadership of Chairman Ferguson, the FTC is working hard every day to marshal resources across the agency to uproot unfair and unreasonable employment agreements that drive down wages and reduce job mobility," said Kelse Moen, Deputy Director of the Bureau of Competition and co-chair of the Joint Labor Task Force.
Noncompete agreements have faced increased scrutiny from federal regulators as research demonstrates their negative effects on worker mobility and wage growth. These restrictions can trap employees in lower-paying positions and prevent them from leveraging their skills and experience to secure better opportunities or launch competing businesses.
For Gateway's workforce, the noncompete clauses created particular hardship given the specialized nature of pet cremation services. Workers who left the company found themselves effectively barred from applying their industry-specific skills elsewhere, forcing career changes or geographic relocations to find comparable employment.
The pet cremation industry has consolidated significantly in recent years, with Gateway's dominant market position giving it substantial leverage over both veterinary clinic customers and employees. The company's nationwide noncompete policy amplified this market power by preventing competitors from hiring experienced workers and limiting labor mobility across the sector.
The FTC's complaint alleges these practices violated federal antitrust laws by suppressing competition in labor markets. Courts and regulators increasingly recognize that antitrust principles apply not only to product markets but also to employment relationships where companies exercise market power over workers.
The proposed consent order requires Gateway to notify affected employees that their noncompete agreements are no longer enforceable and cannot be used against them. The company must also implement compliance measures to prevent similar violations in the future.
This enforcement action follows broader FTC efforts to combat anticompetitive labor practices across industries. The agency has challenged noncompete agreements in healthcare, technology, and other sectors where such restrictions limit worker mobility and depress wages.
"The Trump-Vance FTC will never stop fighting for American workers. Rest assured: today's action will not be the last," Moen said, signaling continued enforcement priorities in labor market competition.
The Gateway case demonstrates how seemingly routine employment practices can violate antitrust laws when they restrict competition. By applying noncompete clauses universally rather than targeting them to employees with genuine access to trade secrets or strategic information, companies risk running afoul of federal competition policy.
For the nearly 1,800 Gateway employees affected, the FTC's action restores their freedom to pursue career opportunities throughout the pet cremation industry. Workers can now negotiate with competing employers, start their own businesses, or simply threaten to leave as leverage for better compensation and working conditions.
The case also serves notice to other employers that blanket noncompete policies face heightened regulatory scrutiny. Companies should review their employment agreements to ensure restrictions are narrowly tailored to legitimate business needs rather than broadly suppressing worker mobility.
As the FTC continues prioritizing labor market enforcement, employers across industries should expect similar challenges to anticompetitive employment practices that harm workers and restrict competition.