Expect Increase in FTC Noncompete Enforcement Despite Withdrawal of Nationwide Ban

Noncompete agreements remain in the Federal Trade Commission’s crosshairs. Although the FTC abandoned its pursuit of a nationwide ban, targeted enforcement is here, and the healthcare industry specifically has been placed on notice.

The Background

On September 5, 2025, the FTC announced it was walking away from its proposed national ban on noncompetes. However, in a joint statement, FTC Chairman Andrew Ferguson and Commissioner Melissa Holyoak announced that the FTC “will continue to enforce the antitrust laws aggressively against noncompete agreements” by targeting “specific” cases it deems overbroad and harmful, making it clear that this is not retreat, but a shift in tactics.

 Healthcare in the Crosshairs

We expect enforcement in the healthcare space to be a significant priority for the Government.

Why healthcare? For several reasons. First, market and industry consolidation plays into the FTC’s hands. It’s also convenient for the FTC, other regulators, and even private civil litigants to argue that patients’ rights override any business justification for restricting employment. Lastly, regulators and litigants can further argue that restricting doctors and nurses from operating within a geographic region doesn’t just harm the professional, it limits patient choice in that region.

In fact, and as we have previously discussed, five days after abandoning the nationwide ban, the FTC issued noncompete warning letters to several major healthcare employers and staffing firms. The letters demand employers review their employment agreements and ensure they are not “unfair or anticompetitive.” For employers who refuse to comply, the FTC is prepared to litigate.

The FTC also issued a public inquiry, requesting information from the public about active overreaching noncompetes. The stated goal of the inquiry is to identify potential enforcement targets. And on January 27, 2026, the FTC held a workshop on noncompetes and revealed that more investigations are already underway. Regulators may also include in their review other types of restrictive covenants like non-disclosure agreements or patient/employee non-solicitation clauses if they essentially function as a noncompete.

The message for 2026 is clear: expect investigations and enforcement actions.

State Laws Ramp Up

The FTC’s pivot aligns with accelerating state-level activity. In 2025 alone, several states, including Arkansas, Colorado, Indiana, and Pennsylvania, enacted laws banning or significantly restricting healthcare noncompetes. A pending law in New York[1] would ban, with some exceptions, noncompete provisions for workers earning less than $500,000 a year and for all health-related professionals (regardless of compensation). The New Jersey legislature is trying to outlaw noncompetes completely. A 2025 bill banning noncompete provisions received support but ultimately didn’t pass. It’s expected to be reintroduced in 2026. In the meantime, NJ assesses noncompetes on their reasonableness.

For multi-state operators, compliance is a moving target. Your standard employment agreement might work in New York but violate New Jersey law. If you work across state lines, you need state-specific employment agreements, not universal templates.

 How to Prepare

If your employment agreements contain restrictive provisions, now is the time to review them with experienced counsel. Specifically:

• Review geographic and temporal scope. Overbearing geographic restrictions or excessive durations are vulnerabilities.
• Consider uniqueness of skills and profession. Restrictive covenants for lower- and mid-wage workers are higher risk.
• Consider legitimate business justifications. For each restrictive covenant, consider why narrower alternatives won’t work.
• Cross-check state law compliance. Businesses operating in multiple states must make sure their employment agreements comply with each state’s laws.

If you receive a warning letter or a Civil Investigative Demand from the FTC or a state agency, treat it as pre-litigation notice and contact experienced counsel immediately.

Rivkin Radler’s Executive Briefing

Join Rivkin Radler’s Health Law Executive Briefing on March 12, 2026 for practical guidance on navigating the evolving restrictive covenant landscape. You can register here.

[1] Reintroduced as A10023.