TL;DR:
- The Player: Gateway Services, Inc., the largest pet cremation company in the U.S., controlling over 100 locations and employing nearly 2,000 workers.
- The Scheme: Since 2019, Gateway forced approximately 1,780 employees (from executives to minimum-wage laborers) to sign overly restrictive non-compete agreements.
- The Restriction: Workers were banned from finding employment in the pet cremation industry anywhere in the United States for 12 months after leaving Gateway.
- The Impact: Employees fired after facility closures were legally blocked from working in their own trade. The policy artificially suppressed wages, restricted labor mobility, and crushed potential competition.
- The Verdict: The Federal Trade Commission (FTC) charged Gateway with unfair methods of competition, citing that their conduct harmed employees, consumers, and the competitive market.
Introduction: The Indignity of Corporate Control
In the modern American economy, the right to work is frequently surrendered to the fine print of corporate contracts. The most egregious example of this systemic overreach recently surfaced in the pet cremation industry, where Gateway Services, Inc. allegedly weaponized the legal system to trap low-wage workers.
Consider the reality for an hourly laborer operating a crematory oven or molding clay paw prints for grieving pet owners. These are essential service workers. Yet, under Gateway’s expansive employment policy, these individuals were legally barred from working in their chosen field anywhere in the United States for a full year if they left the company.
This case is a brutal illustration of how modern corporations use restrictive covenants to artificially suppress labor power, lower wages, and secure market dominance…prioritizing shareholder value over human livelihood.
Inside the Allegations: A Timeline of Suppression
According to the Federal Trade Commission’s complaint, Gateway Services, Inc. and its U.S. subsidiary engaged in a systematic effort to lock down the labor market. As the largest pet cremation provider in the nation, Gateway wielded immense power, servicing 17,000 customers across North America. Rather than competing fairly for talent, they chose to legally shackle their workforce.
The core of the misconduct lies in the “Non-Compete Agreements” enforced on nearly 90% of their U.S. workforce. These contracts were not reserved for high-level management like how they should be in an ideal capitalistic society (oxymoron, I know) but were blanketly applied to facility-level laborers, customer service representatives, and drivers.
Timeline of Corporate Misconduct
| Period | Action Taken by Gateway Services |
| 2019 | Gateway adopts a sweeping policy requiring all newly hired employees to sign non-compete agreements, regardless of job title, wages, or access to sensitive information. |
| Jan 2020 – Oct 2023 | Gateway executes a consolidation strategy, closing dozens of cremation facilities across the United States. Employees at these facilities are terminated yet remain bound by non-competes, preventing them from finding new work in the industry. |
| Specific Incident | In one documented instance, Gateway forces employees at a specific facility to sign non-competes, only to close that very facility weeks later and fire the staff, leaving them unemployed and legally restricted. |
| Strategic Response | When a competitor entered a specific market, Gateway responded by executing non-compete agreements with existing employees who were not previously covered, directly blocking the competitor’s ability to hire experienced staff. |
| Nov 2025 | The FTC issues a formal complaint, charging Gateway with violating Section 5 of the FTC Act by using unfair methods of competition. |
Profit-Maximization at All Costs
Gateway’s internal logic reveals a calculated decision to suppress competition at the expense of worker welfare. The complaint highlights that Gateway viewed these restrictive agreements as a mechanism to protect revenue streams rather than legitimate trade secrets.
Internal assessments described non-compete agreements as “nice to have” even in markets where they planned to consolidate operations and fire staff. The company explicitly acknowledged that these agreements reduced “competitive pressures.” In one candid admission regarding acquired employees, Gateway management noted that even if they fired a salesperson, the non-compete was essential to prevent that person from “jumping ship” to a competitor.
The chilling rationale was purely financial: “At some point, we’ll have to deal with the competitive concerns which will cost $.” By locking employees into restrictive contracts, Gateway effectively insured itself against the free market, forcing workers to bear the cost of the company’s risk management.
Exploitation of Workers: Wages and Mobility
The human cost of Gateway’s strategy is measurable in lost wages and restricted freedom. By forcing 1,780 employees under these agreements, Gateway fundamentally altered the bargaining power between employer and worker.
- Suppressed Wages: When workers cannot threaten to leave for a competitor, they lose their primary leverage to negotiate for better pay. These agreements likely caused lower wages and reduced benefits across the board.
- Forced Unemployment: The geographic scope of the restriction (literally the entire United States) meant that a terminated driver or operator could not simply find a job at a pet crematory in the next town. They were effectively exiled from their industry for a year.
- Job Lock: Employees unhappy with unsafe working conditions or poor management were forced to stay, knowing that leaving meant potential unemployment or a complete career restart.
This exploitation was indiscriminate. It targeted those with the least resources to fight back, including hourly workers performing manual labor. These be roles where “non-compete” logic has no ethical or economic justification.
Regulatory Capture and the Illusion of “Legitimate Interest”
Gateway’s behavior thrives in a regulatory environment that has historically allowed corporations to draft overbroad contracts, counting on the fact that few low-wage workers have the resources to challenge them in court.
The company recognized that in markets where competitors were “at a smaller scale and less of a threat,” they could tolerate the risk of not having agreements.
However, in competitive markets, they aggressively enforced these terms. This selective enforcement demonstrates that the goal was never about protecting proprietary information (which would be a constant concern regardless of location) but about crushing specific competitive threats.
The Economic Fallout: Stifling Innovation
The ripple effects of Gateway’s dominance extend beyond their own payroll. By locking up the available talent pool, Gateway created significant barriers to entry for new businesses.
The pet cremation industry already has high barriers to entry. Gateway’s aggressive use of non-competes made it nearly impossible for new rivals to launch, as they could not hire experienced staff. Former Gateway employees who attempted to start their own businesses faced legal threats and roadblocks, diminishing the likelihood of competitive entry.
The result is a stagnant market where one dominant player dictates prices and service quality, insulated from the discipline of competition. Consumers (veterinarians and grieving pet owners) ultimately pay the price through potentially higher costs and fewer choices.
Conclusion: A System Working as Intended?
Gateway Services, Inc.’s corporate misconduct exemplifies a corporate ethos that views labor not as a partnership, but as a liability to be controlled. By stripping workers of their mobility and blocking competitors from the market, Gateway secured its profits through legal bullying rather than innovation.
The FTC’s intervention marks a critical pushback, but the damage inflicted on nearly two thousand workers serves as a reminder of the fragility of economic freedom in the face of unchecked corporate consolidation.
Until the systemic incentives for such predation are dismantled, workers will continue to be the collateral damage of the drive for monopoly power.
There is an FTC press release on this scandal that can be found at their own website if you want to fact check me: https://www.ftc.gov/news-events/news/press-releases/2025/11/ftc-approves-final-order-prohibiting-noncompete-enforcement-gateway-services
💡 Explore Corporate Misconduct by Category
Corporations harm people every day — from wage theft to pollution. Learn more by exploring key areas of injustice.
- 💀 Product Safety Violations — When companies risk lives for profit.
- 🌿 Environmental Violations — Pollution, ecological collapse, and unchecked greed.
- 💼 Labor Exploitation — Wage theft, worker abuse, and unsafe conditions.
- 🛡️ Data Breaches & Privacy Abuses — Misuse and mishandling of personal information.
- 💵 Financial Fraud & Corruption — Lies, scams, and executive impunity.
