New England Biz Law Update
The Federal Trade Commission (FTC) has issued warning letters to several hospital systems and staffing firms over the use of non-compete clauses in employment agreements.
The letters signal that the FTC is still scrutinizing non-compete provisions, even though the Trump administration has halted appeals of rulings blocking a rule that would have banned non-competes in most employment situations.
While the employers receiving letters weren’t named publicly, the agency emphasized that certain blanket restrictions on worker mobility may already violate existing antitrust law.
This development comes on the heels of an FTC order against a private security company, which was barred from enforcing non-competes against 1,800 workers.
What this means for employers
Although the future of the FTC’s proposed rule banning non-competes is in question, current enforcement is ramping up, especially in industries like healthcare where worker shortages and staffing agency practices are under scrutiny.
If your organization uses non-competes, particularly with nurses, techs, or other in-demand staff, now is the time to review and revise your agreements for fairness and legal defensibility.
Here are recommended next steps:
- Audit existing employment contracts for any overly broad or blanket non-compete language.
- Evaluate whether narrower covenants – such non-solicitation or confidentiality agreements – might achieve the same goal without restricting mobility.
- Keep an eye on the FTC’s actions in this area and consider preemptive updates.
