The regulatory landscape regarding employee non-compete agreements has undergone a seismic shift in the last quarter of 2025. Following the Federal Trade Commission’s (FTC) decision in September to abandon its appeals of the court rulings that struck down the 2024 Non-Compete Rule, many employers breathed a sigh of relief, assuming the era of federal scrutiny had ended.
That assumption would be a mistake.
As signaled by the recent actions of the agency under Chairman Andrew Ferguson, the death of the blanket ban has not ushered in a return to the status quo. Instead, it has marked a transition to a more traditional, yet aggressive, case-by-case enforcement strategy—with the healthcare and staffing sectors firmly in the crosshairs.
Employer Warning Letters
The FTC recently issued a wave of warning letters to numerous large healthcare employers and staffing agencies. These letters represent the first major systemic initiative under new leadership regarding restrictive covenants.
These letters utilize the FTC’s long-standing authority under Section 5 of the FTC Act to police “unfair methods of competition” on an individual basis. The correspondence “strongly encourages” recipients to conduct a comprehensive review of their employment agreements, specifically prohibiting provisions that are “unjustified, overbroad, or otherwise unfair.”
Key areas of concern highlighted in the letters include:
- Vital Roles: The agency is particularly focused on restrictions placed on nurses, physicians, and other medical professionals where non-competes can directly degrade patient access to care, especially in rural or underserved markets.
- Indiscriminate Use: The letters warn against “one-size-fits-all” agreements that bind lower-wage or non-executive staff without a legitimate business justification.
- Patient Choice: The FTC posits that these restrictions do not just harm labor mobility; they harm consumers by limiting their ability to follow their preferred providers.
Implications for Employee Health Care Providers
For health care professionals, the previous uncertainty surrounding the status of the 2024 Rule has given way to a landscape that offers renewed promise for career mobility and professional autonomy. While the blanket ban on non-competes is no longer on the table, the FTC’s current enforcement strategy provides a significant shield for individual providers, particularly those in direct patient care roles.
The agency is no longer asserting that every restrictive covenant is automatically void, but it is aggressively signaling that restrictions placed on nurses, therapists, and non-executive physicians are likely unreasonable and legally vulnerable.
This targeted approach effectively clears the thickets of contracts that have historically trapped medical professionals in positions, allowing for greater freedom to move between hospitals or practices without fear of litigation. Employees should be aware that the FTC’s scrutiny is heavily weighted against “rank-and-file” restrictions.
As demonstrated by the recent “Gateway” precedent, unless a professional holds a senior executive role or significant equity, a non-compete designed purely for retention is now viewed with extreme skepticism by federal regulators. This distinction means that the vast majority of healthcare staff may now have the leverage to negotiate better terms or exit stifling contracts, as employers are increasingly wary of inviting federal investigation by enforcing overbroad agreements.
The new shift empowers employees to challenge existing restrictions that hinder patient access to care. The recent warning letters serve as a potent tool for providers; the mere threat of federal oversight may discourage employers from attempting to enforce these clauses. Consequently, healthcare workers are now in a stronger position to advocate for their right to work freely, ensuring that their ability to treat patients is not dictated by anti-competitive administrative policies.
Taking Action in a Changing Landscape
Given the FTC’s shift toward targeted, case-by-case enforcement, healthcare employees must be proactive in evaluating their contractual obligations.
If you are currently subject to a non-compete, or if you are being asked to sign one, you should contact an employment attorney. Potomac Legal Group is highly experienced in non-compete and restrictive covenant matters in Washington, D.C., Maryland, and Virginia.
Our attorneys can provide detailed contract review and strategic counseling to identify vulnerabilities in overbroad agreements, and we provide litigation defense to employees facing claims brought by a former employer. Our attorneys are equipped to challenge unfair restraints and protect your professional career.
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