The Federal Trade Commission (FTC) continues to weigh in on the state of non-competition agreements (“non-competes”), this time, addressing non-competes in the healthcare industry.
In her latest article, KingSpry’s Healthcare Professional Legal Services Chair, Karley Biggs Sebia, Esq., breaks down the FTC’s latest action and what it means for healthcare employers and staffing companies.
A Warning to Healthcare Employers
On September 10, 2025, the FTC issued letters to several healthcare employers and staffing companies across the nation, addressing its commitment to protecting Americans “from anticompetitive conduct and unfair methods of competition.”
The letters acknowledge the FTC’s awareness of unfair and restrictive non-competes in the healthcare industry, providing that “many healthcare employers and staffing companies include [non-competes] in employment contracts that may unreasonably limit employment options for vital roles like nurses, physicians, and other medical professionals.”
Importantly, while narrowly tailored noncompetes can serve valid purposes in certain circumstances, the FTC emphasized that available evidence indicates that may employers impose them without due consideration of necessity or appropriateness. This includes failing to evaluate whether less restrictive alternatives could achieve the same procompetitive purposes. In practice, noncompetes can be overbroad in duration or geographic scope, or applied to roles for which such restrictions are inappropriate altogether.
The FTC also warns healthcare employers that it has the authority to investigate their use of unlawful non-competes under Section 5 of the Federal Trade Commission Act. In light of this authority, the letter strongly encourages healthcare employers and staffing companies to conduct comprehensive reviews of their employment agreements, non-competes, and other restrictive covenants “to ensure that they comply with applicable laws and are appropriately tailored.” The FTC further recommends the discontinuance of any non-competes that are unfair or anticompetitive under the Act.
A sample letter can be found on the FTC’s website, here: https://www.ftc.gov/legal-library/browse/warning-letters/noncompete-warning-letter-template.
In addition to federal scrutiny, state-level restrictions are also developing. For example, Pennsylvania enacted the Health Care Practitioner Noncompete Agreement Act of 2024, which restricts the use of noncompete agreements for medical doctors, doctors of osteopathic medicine, physician assistants, certified registered nurse practitioners, and certified registered nurse anesthetists In the Commonwealth. The statute, however, does not extend to other licensed professionals such as optometrists or dentists, nor to non-clinical staff or executives. By contrast, the FTC’s warning letters do not specifically define “healthcare worker,” leaving open whether other licensed professionals such as chiropractors, optometrists, or dentists might fall within the scope of its enforcement priorities.
Key Takeaways
The FTC’s latest actions, including an enforcement action against a pet cremation company earlier this month, signal its intent to address non-competes in the near future and take enforcement actions against non-compliant employers. Healthcare employers are strongly encouraged to review their non-competes and restrictive covenants to ensure that they are narrowly tailored to advance legitimate business interests, and not unnecessarily broad, anticompetitive, or misapplied to roles where they are inappropriate. Employers in Pennsylvania should be especially mindful, as the Health Care Practitioner Noncompete Agreement Act of 2024 already restricts noncompetes for certain licensed healthcare practitioners, adding another layer of restriction to consider.
