Manatt Employment and Labor Counsel David Schur wrote an article for Compliance Today discussing the intricacies of how the Federal Trade Commission’s (FTC) noncompete ban may impact health care organizations if reinstated.
Earlier in 2024, the FTC passed a rule banning noncompete agreements, which prevented practitioners from working at a competitor company after their current job ended. Following a myriad of litigation challenging the ban, the FTC’s rule was halted but may still take effect in the upcoming years. Schur discussed what the FTC rule prohibits and allows in terms of noncompete agreements, such as restricting any new ones and invalidating those existing, excluding for senior executives.
He also explored how the rule applies to nonprofit hospitals and health care entities as well as specific state laws restricting these agreements. “The bottom line is that while the health care industry, like all employers, have been given a reprieve from immediate compliance with the FTC’s noncompete ban, there is a chance that in 2025 or early 2026, the rule may be reinstated. To prepare for the possibility, it is critical to understand just what the rule requires,” he wrote.
Read the full article here.