Last year, the Federal Trade Commission’s proposed a nationwide ban on non-competition agreements — a sweeping rule that would have prevented most employers from enforcing non-competes with employees and independent contractors. The rule was scheduled to take effect on September 4, 2024, but a U.S. District Court blocked it before it could go into effect.
At the time, the Biden Administration appealed that ruling. However, in a move that many anticipated, the Trump Administration has now dropped the appeal. That means the proposed ban will not move forward — at least for the duration of the Trump term.
That doesn’t mean employers can use non-competes without limits. Courts will continue to closely scrutinize these agreements to ensure they are narrowly tailored, reasonable in scope and duration, and designed to protect a legitimate business interest.
One area where additional caution remains is in the medical field. The Trump Administration has indicated it will continue to watch non-compete use among healthcare providers closely. Courts have long treated physician and medical professional non-competes differently because of the strong public policy interest in preserving patient choice. Employers in the healthcare sector should take special care to ensure any restrictions are properly drafted — and consider whether non-solicitation or confidentiality agreements might better achieve their goals. For more information on healthcare non-compete agreements, read this article that was featured on the firms Med Law Blog written by Tucker Arensberg attorney Adam Appleberry.
