In a landmark decision, the Federal Trade Commission (FTC) passed a nationwide ban on non-compete agreements, marking a significant shift in labor policy in the United States. This groundbreaking development has far-reaching implications for employers and employees across the healthcare industry, who must now adapt to a new regulatory landscape governing their hiring practices and employment contracts. In this blog post, we’ll explore the details of the FTC’s decision and guide employers and employees on navigating this unprecedented change.

Key Points:

  1. The Scope of the Ban: The FTC’s ban on non-compete agreements applies to employers nationwide and prohibits using such agreements in employment contracts. This means that from now employers can no longer enforce non-compete clauses that restrict employees from working for or starting competing businesses after leaving their current positions. 
  2. Implications for Employers: The passage of this nationwide ban has significant consequences for employers, who must now reassess their hiring practices and employment contracts to ensure compliance with the new regulations. Employers may need to revise existing contracts, educate employees about their rights under the new law, and seek legal guidance to navigate potential legal challenges. Employers may also need to reconsider their hiring and retention strategies without non-compete agreements, focusing more on creating attractive work environments and offering competitive compensation packages to retain staff. Employers should also evaluate and consider other means to protect their interests, such as enforcing confidentiality agreements, trade secret protections, and training reimbursement agreements, which may have their own legal considerations. 
  3. Implications for Employees: The FTC’s nationwide ban on non-compete agreements represents a significant victory for employee rights and job mobility. Employees now have greater freedom to pursue new career opportunities and chart their professional paths without fear of legal restrictions. Employees can confidently navigate this new regulatory landscape and continue to pursue their professional goals and aspirations by staying informed and proactive.
  4. Industry-Specific Considerations: Certain industries, like healthcare, will be more heavily impacted by the ban than others. This is because non-compete agreements are currently very popular in healthcare. 
  5. Compliance Strategies: In light of the FTC’s decision, employers should take proactive steps to ensure compliance with the ban on non-compete agreements. This may include reviewing and updating employment contracts, training HR personnel and managers, and seeking legal counsel to address compliance concerns.
  6. Looking Ahead: As employers and employees navigate the implications of the FTC’s decision, it’s essential to stay informed about any further developments or clarifications related to the ban on non-compete agreements. Employers and employees should monitor regulatory updates, engage with industry associations and legal experts, and remain vigilant in their efforts to comply with the new regulations.
  7. Legal Challenges: Legal challenges will likely arise from various stakeholders, including employers, industry groups, the chamber of commerce, and some states. States with employer-friendly policies that have historically favored the use of such agreements or have laws that govern their use, and states with strong business interests, like Texas, are likely to push back against federal intervention in this area. These challengers could argue that the FTC is overstepping its authority or that the ban violates principles of federalism by infringing on states’ rights to regulate employment practices within their jurisdictions. 
  8. Potential for Varied Enforcement: Even with the FTC ban, enforcement could vary depending on how individual states respond. Some states might continue enforcing non-compete agreements despite the federal ban, leading to a patchwork of regulations and legal uncertainty for employers and employees alike.
  9. The Details: Specifically, the FTC’s new rule makes it illegal for an employer to: enter into or attempt to enter into a noncompete with a worker; maintain a noncompete with a worker; or represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

The rule applies to independent contractors and anyone who works for an employer, whether paid or unpaid. It also requires employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.

The rule generally does not apply to other types of employment restrictions, like non-disclosure agreements. However, if they are so broad in scope that they function as noncompetes, they could be subject to the rule.


The passage of the nationwide ban on non-compete agreements by the FTC represents a significant milestone in the evolution of labor policy in the United States. Employers and employees must now adapt to a new regulatory landscape governing their hiring practices and employment contracts, taking proactive steps to ensure compliance and mitigate potential legal risks. Current contracts may need to be rewritten to comply with this ban. Employers can navigate this unprecedented change and thrive in a dynamic and evolving business environment by staying informed, seeking legal guidance, and adopting proactive compliance strategies.