The FTC’s Attempts to Limit Merger and Acquisitions Over-broad Non-competes

BY: Conner Ahler, RBFL Editor

The Federal Trade Commission blocked a non-compete agreement between two firms in the process of selling and purchasing gas stations in response to pressure from the Executive Branch to increase competition in the American economy. Employment non-compete agreements are usually the type under such scrutiny, making this action unique. The FTC found a non-compete agreement that fuel companies Arko Corporation, and their subsidiary, GPM Investments LLC (“GPM”), made with fuel company Corrigan Oil (“Corrigan”) violated antitrust standards. The FTC then entered into a Consent Order with both of the firms to resolve the issue.

This FTC action was largely spurred on by pressure from the Executive Branch to crack down on anticompetitive practices across the country. President Biden called upon the FTC and the Attorney General’s office to enforce the initiative. The FTC restricted non-compete agreements twice in 2021 prior to their involvement with GPM and Corrigan by vastly curbing the effects of a non-compete agreement between 7-Eleven, Inc. and Marathon Petroleum Corporation and an employee non-compete agreement made by DaVita, Inc. In the summer of 2022, the FTC entered into a Consent Order with GPM and Corrigan based on GPM’s purchase agreement of 60 gas stations from Corrigan. The FTC found that the non-compete agreement ancillary to this purchase, as well as the resulting lack of competition resulting from the purchase violated antitrust standards.

Generally, non-compete agreements likely satisfy antitrust standards if they protect a legitimate business interest and are reasonable in scope. Freedom from competition is never a legitimate interest. Non-compete agreements must also not “unreasonably restrict the available supply of, or access to, or raise the price of any useful commodity, or tend to create a monopoly.” The FTC evaluated GPM and Corrigan’s agreement under these rules using their own standards.  The purchase agreement, selling 60 retail fuel locations in Michigan and Ohio from Corrigan to GPM, was signed on March 8, 2021. The total consideration paid equaled about $94 Million. Corrigan agreed that they would not compete with the 60 locations that GPM purchased and also agreed not to compete with about 190 more GPM fuel locations.

The FTC stated that this agreement violated Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18 and Section 5 of the Federal trade Commission Act as amended, 15 U.S.C. § 45. The restrictions the FTC levied and the reasoning behind them can be found in the content of their Consent Order and other public documents. The FTC first ordered GPM to return five specific fuel locations located in places where loss of a single station would result in an unreasonably non-competitive environment. The FTC then found that the non-compete clauses in the agreement went “well beyond what is reasonably necessary to protect GPM’s investment in the sixty acquired retail Express Stop locations.” The non-compete was amended to only apply to the fifty-five remaining fuel locations, and the limitations were reduced to three years in length and no more than three miles from each location. Finally, the FTC ordered GPM not to enter into any future non-compete agreements related to the sale of fuel locations.

Other firms planning to draft non-compete agreements ancillary to the sale of fuel locations can learn much from this FTC decision. Non-compete agreements must be strictly structured only to protect legitimate business interests, and not unreasonably at the expense of competition. Furthermore, firms should be aware that the FTC will look into the specific location and market surrounding every fuel location, and will prevent sales that unreasonably harm competition. Beyond fuel companies, firms in general should be on notice that the FTC is following the goals that the Executive Branch put forth, and cracking down on non-compete agreements.


Proclamation No. 14036, 86 Fed. Reg. 36, 987 (Jul. 9, 2021)


Press Release, Federal Trade Commission, FTC Imposes Strict Limits on DaVita, Inc.’s Future Mergers Following Proposed Acquisition of Utah Dialysis Clinics (Oct. 25, 2021), [];


Complaint, In re ARKO Corp., GPM Investments, LLC, GPM Southeast, LLC, and GPM Petroleum, LLC, Federal Trade Commission (No. 211-0087), []

C.T. Drechsler, Enforceability of covenant against competition, ancillary to sale or other transfer of business, practice, or property, as affected by territorial extent of restriction, Part 1 of 2, 46 A.L.R.2d 119 (2022)

Robert W. Emerson, Franchising Covenants Against Competition, 80 Iowa L. Rev. 1049, 1053-54 (1995)

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