In the wake of the Federal Trade Commission's recently failed attempt to ban non-compete agreements between employers and workers, individual states have once again taken up the mantle...
In the wake of the Federal Trade Commission's recently failed attempt to ban non-compete agreements between employers and workers,1 individual states have once again taken up the mantle of further regulating and limiting their use. These states' new efforts have appeared with greatest frequency in the health care sector.
In states where noncompete laws have recently changed, legislatures appear to be working towards striking a balance between the various rights and interests of the affected stakeholders. These rights and interests may include a company's right to protect its legitimate business interests (such as confidential information, customer relationships, and company goodwill), a health care practitioner's right to make a living, a community's interest in maintaining the broadest scope of medical services available, and the interest of patients to maintain continuity of care.
As a result, these new laws have created a kaleidoscope of noncompete restrictions and limitations that will require employer and contractors' close attention to ensure that arrangements with health care practitioners in any jurisdiction are consistent with governing law. It remains to be seen how these restrictions will distort the market and impact incentives.
Current Patterns in Health Care Non-Competes
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