By Jody Godoy
(Reuters) -The U.S. Federal Trade Commission barred the largest pet cremation business in the U.S. from enforcing its noncompete agreements with 1,800 workers on Thursday, saying they unfairly diminish workers’ leverage with their employer.
FTC Chair Andrew Ferguson said in a statement on Thursday that the action shows how the agency can use enforcement actions against targeted instances of unfair noncompete agreements, even without the rule passed by his predecessor, Lina Khan, that would ban such agreements nationwide.
Thursday’s action “makes clear that the Trump-Vance Commission will act as a cop on the beat, enforcing the antitrust laws against unlawful noncompete agreements to protect American workers, rather than trying to legislate them away,” Ferguson said.
A judge in Texas struck down the noncompete ban last year after the U.S. Chamber of Commerce sued the agency. Ferguson, a Republican, dissented from the agency’s Democratic majority rule when it was passed, saying it went beyond the FTC’s authority and relied on weak evidence regarding the benefits and drawbacks of a blanket ban.
On Thursday, the FTC said pet cremation company Gateway Services has agreed to cease enforcing its noncompete agreements, which bar employees at its 100 locations from working elsewhere in the industry for a year after leaving the company.
The agency also called for public comment on noncompete agreements, saying it may use the information to bring future cases.
Kelse Moen, who co-leads the labor task force that Ferguson launched in February, said in a statement that “today’s action will not be the last.”
The action is the first by the FTC under the Trump administration against the practice. The agency settled with a security company and glass container manufacturers during Biden’s term.
The agency’s three Republicans voted in favor of the settlement with Gateway Services, while Rebecca Slaughter, a Democratic commissioner who was reinstated by a court this week after being fired earlier this year by Trump, voted against it.
The effort illustrates one side of the Trump administration’s approach to U.S. workers, where Ferguson has said the FTC aims to crack down on deceptive practices by employers to deliver on President Donald Trump’s promise to address the economic concerns of the working class.
On the other hand, labor groups have criticized the administration and unions have sued it for stripping hundreds of thousands of federal workers’ collective bargaining rights and reversing some pro-worker policies put in place under former President Joe Biden.
(Reporting by Jody Godoy and Daniel Wiessner in New YorkEditing by Chris Sanders, Matthew Lewis and Nick Zieminski)
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