Current Month (September 2025)
Antitrust Law
FTC Stakes Out Its Position on Worker Noncompetes
By Barbara Sicalides, Daniel Anziska, and Andrew Reed, Troutman Pepper Locke
Three nearly simultaneous actions of the Federal Trade Commission (“FTC”) in September confirmed its intentions with respect to employee noncompetes. In the first two related actions, the FTC indicated it will not defend its 2024 rule banning virtually all worker noncompetes and will instead focus on efforts to rein in the use of “unfair and anticompetitive” noncompetes. The FTC’s third action notified the public of its intent to accomplish its goals, at least in part, through a wide-ranging request for the public to identify employers using noncompetes, followed by targeted enforcement actions.
Specifically, on September 4, 2025, the FTC voted 3–1 along party lines to approve a complaint against the largest pet crematorium in the U.S. and a settlement of that action that bans the company from using noncompete clauses in many of its employment agreements. The complaint alleges that, in 2019, the pet cremation company and its subsidiary adopted a policy requiring noncompete agreements for all newly hired employees (except in California, which prohibits such restrictions), which typically barred the employees from working in the pet cremation industry anywhere in the U.S. for one year after their departure.
The complaint emphasized the fact that the noncompetes were imposed on employees regardless of (1) their responsibilities, compensation levels, or skills, and (2) even in the absence of a nearby operational facility. Commissioner Rebecca Slaughter, who was briefly reseated pursuant to a court order, dissented.
The FTC’s second action, also on September 4, was to issue a Request for Information Regarding Employer Noncompete Agreements in an effort to identify “which specific employers continue to impose noncompete agreements.” The request is not aimed at studying the use of worker restrictions and does not seek information from employers wanting to justify their use of noncompetes; instead, it is focused solely on gathering information about employers that are currently using noncompete agreements. For example, it seeks the employer names, job functions, and salaries of those workers covered, scope of restrictions, enforcement practices, and harm to employee mobility.
The third action, filed the following day, was the FTC’s unopposed motions to dismiss both its Fifth and Eleventh Circuit appeals of the two district court decisions holding that the agency’s rule banning worker noncompetes exceeded the FTC’s authority. By dismissing these appeals, the agency has acceded to the vacatur of the final Non-Compete Clause Rule. The vote to abandon the defense of the rule was 3–1 along party lines. Commissioner Slaughter dissented on the basis that the rule received overwhelming support in the form of 25,000 supportive comments out of the approximately 26,000 total comments received. She was also critical of the majority’s decision to simply drop the defense of the rule instead of allowing for a public notice and comment period.
Whether or not the FTC followed the correct process, this administration will not defend the 2024 noncompete ban. This means multiple conflicting district court decisions regarding the rule remain on the books without appellate court review.
For more information, please see Business Law Today’s full-length article on this topic.
DOJ Antitrust Division AAG Gail Slater Announces “Comply with Care” Task Force
By Barbara Sicalides, Daniel Anziska, and Julian Weiss, Troutman Pepper Locke
On August 29, 2025, Assistant Attorney General Gail Slater’s speech at Ohio State University Law School announced the creation of a “Comply with Care” task force within the Antitrust Division of the Department of Justice (“DOJ”) focused on enforcement action against parties flouting disclosure obligations. The speech and task force are a continuation of the Antitrust Division’s recent lawsuits against companies for failing to make merger filings under the Hart-Scott-Rodino (“HSR”) Act or responding properly to investigations.
AAG Slater stated the DOJ’s commitment to counter those who “undermine sound antitrust enforcement for everyone,” specifically claiming that “a few actors—many of them at Big Law firms” have used “[t]actics designed to circumvent legal process and hinder our investigations.”
The speech highlighted alleged violations of the HSR Act, which are subject to a fine of up to $53,088 per day. The targeted practices include failing to make HSR filings and failing to submit relevant documents.
AAG Slater criticized other practices in investigations and pointed to court rulings finding that corporate defendants failed to preserve evidence and live up to discovery obligations. Specific objectionable practices include delay tactics, overuse of the attorney-client privilege, deficient privilege logs, and failure to preserve documents including ephemeral messages. Her remarks took aim at practices aimed at hiding material information from investigators or courts, such as “systematic behavior that led to the destruction of relevant evidence,” particularly regarding the use of messaging apps due to the automatic deletion of messages within twenty-four hours and the failure of hold notices to prevent such deletions.
AAG Slater highlighted that privilege logs must not be abused and noted, for example, that simply listing “Legal Department” as the basis of privilege is not sufficient. Accordingly, “[p]rivilege abuses are grounds for enforcement actions and sanctions motions.” An example provided included an enforcement action filed against a company for claiming a “blanket privilege” over an entire category of documents, and a company that instructed employees to add attorneys to communications and to “ask the lawyer a question” whenever they dealt with a sensitive issue, and to “avoid using certain ‘antitrust buzzwords’ in their communications.”
To combat these abuses, the Antitrust Division has established a “Comply with Care” task force targeting “problematic tactics from outside lawyers and law firms” that could distort the process and obfuscate the potential anticompetitive effects of transactions or conduct. The responsible Antitrust Division officials will focus on “abuses” by respondents in investigations “and take decisive action to address them.” The task force will likely issue guidance and continue to bring investigations and enforcement actions against companies viewed as not complying with their legal obligation to make filings or respond to process.
The importance of parties’ and counsels’ credibility before the agencies and the courts cannot be overstated. Although the substantial burden of any agency investigation, including the detailed privilege logs called for by Second Requests and other agency civil investigative demands and the preservation obligations arising from the ever-evolving technologies and methods of communication, does not make compliance simple or easy, consultation with counsel well in advance of making required HSR filings and at the earliest stage of any internal or external investigation can assist with counterbalancing some of those burdens and mitigating the cost of litigating compliance or imposition of sanctions.
Business Crimes & Corporate Compliance
Look Who’s Talking Now: A Further Installment of How to Have “The Talk” About FinCEN Identifier Numbers
By William E. H. Quick, Polsinelli PC
Visit Business Law Today’s September 2025 in Brief: Corporations, LLCs & Partnerships to read the full update on the Corporate Transparency Act.
Consumer Finance Law
CFPB Terminates Apple and U.S. Bank Consent Orders
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 22, the Consumer Financial Protection Bureau (“CFPB”) issued administrative orders terminating consent orders issued under the Biden administration—one against Apple and another against U.S. Bank. The original Apple consent order related to Apple’s marketing and handling of credit card disputes. It was issued in late 2024 and levied a civil money penalty of $25 million. The original U.S. Bank order alleged missteps in the bank’s processes for managing unemployment benefits on prepaid cards during the COVID-19 pandemic. It was issued in late 2023 and included penalties and consumer redress totaling close to $21 million.
CFPB Amends Supervisory Designation Process
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 25, the CFPB published a final rule largely rescinding amendments the agency made in 2022 and 2024 to its processes for designating nonbank companies for CFPB supervision. The new rule, which goes into effect on October 27, restores the agency’s supervisory designation processes to the form they took after the Bureau issued its initial rule in 2013. In particular, the rule rescinds the portion of the 2022 and 2024 amendments that made the Bureau Director’s final supervisory designation determinations public. As of the rule’s effective date, such determinations will be again deemed confidential supervisory information and will not be publicly disclosed. In support of its decision, the Bureau noted that the public nature of the designation process under the 2022 and 2024 amendments “create[d] a strong incentive for respondents to consent to designation in order to avoid a public decision and order discussing alleged risks to consumers from respondents,” even in situations where they had potentially successful claims against designation. Like the “larger participant” rule proposals the Bureau issued earlier this year, this final rule follows through on the CFPB’s April 2025 priorities memo, which pledged to shift the Bureau’s supervisory focus “back to depository institutions, as opposed to non-depository institutions.”
Comment Letters on CFPB’s Proposal to Reduce Nonbank Oversight
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
The CFPB has now received over a dozen comment letters in response to the CFPB’s recent proposal to reduce the scope of the agency’s supervisory activity with respect to “larger participants” in certain financial services industries. As the American Banker noted, “[b]ank trade groups and consumer advocates—two groups rarely in agreement—have found common ground in pushing back against the Consumer Financial Protection Bureau’s plan to cut supervision of nonbanks.” In a joint letter, the Consumer Bankers Association and Bank Policy Institute argue that, under the Consumer Financial Protection Act, “oversight is about conduct, not charter status,” and “the stability of the market depends on consistent enforcement across all providers.” The letter goes on to explain that “[w]hen nonbanks are allowed to operate with lighter or fragmented oversight, it distorts markets, undermines fair competition, and risks harm to consumers.”
CashCall Seeks Supreme Court Reversal of $134M CFPB Restitution Order
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 19, CashCall, Inc., a California-based consumer lending company, filed a petition for certiorari with the Supreme Court seeking to overturn a Ninth Circuit decision that requires it to pay $134 million in consumer redress. CashCall claims that the Ninth Circuit erred in upholding a district court judgment that awarded plaintiffs “legal” restitution in excess of CashCall’s net profits. CashCall also claims that the Ninth Circuit wrongfully decided that the company had waived its right to a jury trial by opting for a bench trial, under the circumstances.
Supreme Court Stays Reinstatement of FTC Commissioner
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 22, the Supreme Court issued an order granting an application filed by the Trump administration to stay a district court order reinstating Federal Trade Commission Commissioner Rebecca Slaughter. The President filed the request after the D.C. Circuit refused to stay the reinstatement earlier this month. In the order, the Supreme Court directed the parties to brief and argue several issues, including whether the for-cause removal provisions in the FTC Act violate the constitutional separation of powers, and whether Humphrey’s Executor v. United States, the seminal 1935 case upholding those for-cause removal protections, should be overturned. Three justices dissented, arguing that Humphrey’s Executor is still the law and directly on point.
CFPB Warns Employees About Upcoming Layoffs
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 10, the CFPB’s Office of Human Capital sent employees an email warning them about upcoming layoffs. The email attributed the layoffs to the recent GOP funding cuts included in the budget bill signed in July, which reduced the Bureau’s maximum funding allocation from the Federal Reserve from 12 percent to 6.5 percent, effectively lowering the agency’s budget cap from $785.4 million to $446 million. The email notified employees to prepare for “workforce optimization,” including reductions in force (“RIFs”). The CFPB advised employees to update their resumes by September 25 and stated that employees will be ranked for retention based on factors such as tenure, military service, total years in federal service, and performance. The email did not indicate how many employees would be terminated or which ones.
The CFPB’s email states that leadership would not “restructure” the agency until after the full D.C. Circuit has the opportunity to review the ongoing National Treasury Employees Union (“NTEU”) litigation. In August, a D.C. Circuit panel issued a split decision permitting Acting CFPB Director Russell Vought to proceed with cuts affecting up to 90 percent of staff. However, that ruling is currently paused pending rehearing by the full court. Therefore, the district court injunction against such mass terminations remains in place.
District Court Pauses Small-Business Lending Rule Litigation
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 9, a federal district court in Kentucky paused an industry challenge to the CFPB’s small-business lending rule. The order grants the CFPB’s request to stay the lawsuit while it conducts a new rulemaking process to reconsider the rule. In the order, the court reasoned that the new rulemaking could potentially moot the lawsuit, and that the industry would not be unnecessarily burdened by the stay, since the earliest compliance deadline for the rule is set for July 2026. The CFPB must file a status report with the court on December 1, 2025, detailing the status of the new rulemaking.
FTA Opposes Effort to Extend Open Banking Compliance Deadlines
By Eric Mogilnicki, Lucy Bartholomew, and Tyler Smith, Covington & Burling LLP
On September 3, the Financial Technology Association (“FTA”), in its capacity as intervenor-defendant in the open banking rule litigation, filed a memorandum in opposition to banking industry groups’ recent motion to extend compliance deadlines and prohibit enforcement of the rule until a year after litigation ends. As we previously reported, the court imposed a stay at the request of the CFPB, which plans to replace the Biden-era open banking rule with a new rule on an “accelerated timeline.” Without this stay, the rule would have gone into effect in June 2026 for some entities.
FTA offers several arguments in its memorandum:
- First, FTA argues that extending the rule’s compliance deadlines is unnecessary because, in its recently published advance notice of proposed rulemaking (“ANPR”), the Bureau indicated that it “plans to issue a Notice of Proposed Rulemaking to extend the [current rule’s] compliance dates.” FTA also claims that ruling on the industry groups’ requested injunctive relief would constitute a “preemptive ruling” that “would interfere with the rulemaking process.”
- Second, FTA argues that the industry groups are not entitled to injunctive relief because the industry groups are unlikely to succeed on the merits of their claims and have not established that they would suffer any irreparable harm if the rule’s compliance deadlines remained intact. On the contrary, FTA argues, an injunction extending the rule’s compliance deadlines would harm FTA, its members, and the public.
- Third, FTA argues that the industry groups’ requested relief—an order staying the rule’s compliance deadlines and enjoining enforcement of the rule until one year after the conclusion of the case—is overbroad. Among other things, FTA claims that only one of the industry groups’ members is set to have its compliance obligations go into effect in 2026, while many of their members have compliance deadlines set as late as 2029 or 2030. FTA also claims that the requested one-year, post-litigation relief would not be “preliminary,” and would apply even if the industry groups ultimately lost the case.
For its part, the CFPB filed a memorandum on September 2, indicating that it “take[s] no position on Plaintiffs’ motion to lift the stay” and providing an update on the status of its ongoing rulemaking process.
