FTC Warns Healthcare Employers and Staffing Firms on Non-Compete Clauses
The Federal Trade Commission (FTC) has turned up the heat on healthcare employers and staffing companies over their use of non-compete agreements. On September 10, 2025, FTC Chairman Andrew Ferguson issued formal warning letters to several large organizations, urging them to rethink restrictive employment contracts.
Why the FTC Is Concerned
Healthcare is one of the industries most affected by worker shortages, especially in rural and underserved areas. Non-compete clauses, which prevent doctors, nurses, and other staff from joining competing facilities, can make the problem worse.
According to the FTC, overly broad non-competes limit:
- Worker mobility – trapping professionals in jobs with fewer opportunities for growth or better pay.
- Patient access – reducing the ability of hospitals and clinics to hire needed staff, which ultimately hurts patients.
What the FTC Wants Employers to Do
The FTC isn’t banning all non-competes outright—especially since a previous attempt at a nationwide ban was blocked in court. Instead, it’s signaling that contracts must be carefully tailored. Employers are expected to:
- Audit employment contracts.
- Remove or narrow restrictions that are too broad in geography, time limits, or job scope.
- Avoid clauses that appear designed more to suppress competition than to protect legitimate business interests.
The Bigger Picture
While a universal ban is off the table for now, the FTC is still using its authority under Section 5 of the FTC Act to target agreements it views as unfair or anticompetitive. For healthcare employers, this means that even if a contract looks “standard,” it may still raise red flags.
Why This Matters
This move could reshape how healthcare organizations attract and keep talent. For workers, it may open more doors to job opportunities. For patients, especially in areas already struggling with shortages, it could improve access to care.
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