By: Desalina A. Williams and Jodi R. Bohr
In 2024, the Federal Trade Commission (the “FTC” or “Commission”) finalized a rule that prohibited noncompete clauses in employment agreements.[1] This rule sparked significant discourse across various industries. However, the rule was never enforced because a Texas federal court issued a nationwide injunction blocking the FTC’s rule from taking effect.
Although the FTC initially sought to appeal the injunction, on September 5, 2025, the FTC announced its decision to withdraw its appeal and agreed to let the court nullify the Commission’s rule enacting a nationwide ban on noncompete clauses.[2] Despite its withdrawal, the FTC undoubtably has taken a greater interest in the labor market for anti-competitive conduct. So much so that earlier this year, the FTC launched a Joint Labor Task Force tasked with, among other things, “prioritizing investigations and prosecutions of deceptive, unfair, or anticompetitive labor market conduct.”[3]
On September 10, 2025, the FTC sent a series of letters to major healthcare employers and staffing firms advising them to conduct thorough reviews of their employment contracts—specifically noncompete and other restrictive clauses—to ensure compliance with federal antitrust laws.[4] This announcement leaves little doubt that the FTC is directing its focus to the healthcare sector, and it will be scrutinizing employment agreements in the healthcare field.
Many healthcare employers include noncompete and non-solicitation clauses in employment contracts for nurses, physicians, and other medical professionals. Under Arizona law, these restrictions are enforceable if they are no broader than the employer’s legitimate protectable interests, are not unreasonably restrictive on the rights of the employee, and do not contravene public policy.[5] However, the FTC has indicated that they are concerned that these clauses can unreasonably restrict healthcare professionals’ employment options and, consequently, reduce patients’ options for medical providers.[6] The Commission specifically connected their concerns to rural communities where there is limited access to medical services.[7]
As the debate over noncompete agreements continues, the FTC’s targeted focus on healthcare providers signals a heightened level of regulatory scrutiny into provider employment agreements, which may surprise many employers. Healthcare employers should proactively evaluate their employment agreements and reach out to a competent employment attorney with questions as to whether their provisions potentially violate the FTC. Employment agreements should be narrowly tailored to avoid potential legal challenges or becoming a target in an FTC investigation or enforcement action. If you would like more information, please contact Desalina Williams or Jodi Bohr.
[1] FTC Announces Rule Banning Noncompete, FED. TRADE COMM’N (Apr. 23, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes (last accessed Oct. 6, 2025).
[2] Federal Trade Commission Files to Accede to Vacatur of Non-compete Clause Rule, FED. TRADE COMM’N (Sept. 5, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/09/federal-trade-commission-files-accede-vacatur-non-compete-clause-rule (last accessed Oct. 6, 2025).
[3] FTC Launches Joint Labor Task Force to Protect American Workers, FED. TRADE COMM’N (Feb. 26, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/02/ftc-launches-joint-labor-task-force-protect-american-workers (last accessed Oct. 6, 2025).
[4] The FTC Chairman Ferguson Issues Noncompete Warning Letters to Healthcare Employers, Staffing Companies, FED. TRADE COMM’N (Sept. 10, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-chairman-ferguson-issues-noncompete-warning-letters-healthcare-employers-staffing-companies (last accessed Oct. 6, 2025).
[5] E.g. Bed Mart, Inc. v. Kelley, 202 Ariz. 370, 372 (Ct. App. 2002).
[6] See supra note 4.
[7] Id.
