The Federal Trade Commission’s attempt to ban noncompete agreements nationwide was one of the most closely watched regulatory efforts in recent healthcare labor history. From the agency’s first public signals in 2022 to a final rule that never took effect and appeals that were ultimately abandoned, the saga played out over roughly three years before ending where it started: with noncompetes governed entirely by state law.
As of January 2026, a national ban looks even further out of reach. At a recent FTC workshop where physicians shared how noncompetes had derailed their careers and limited patient access, Chair Andrew Ferguson made clear the agency would not impose a blanket ban — saying it would be unlawful and directing those who want one to take their arguments to Congress instead. For now, the agency has said it will address noncompetes only on a case-by-case enforcement basis.
Here’s a look at the key milestones in the rule’s rise and fall, as covered by Becker’s:
June 2022: FTC Chair Lina Khan tells the Wall Street Journal the agency is considering drafting a regulation targeting noncompete provisions, citing “enormous urgency given how much harm is happening against workers.” The FTC had been subpoenaing businesses suspected of imposing unnecessary noncompete clauses.
January 5, 2023: The FTC issues a proposed rule that would ban noncompete agreements across nearly all industries — potentially lifting wages by nearly $300 billion per year economywide. Noncompetes were estimated to cover 20–45% of workers in the private sector, including 35–45% of physicians. Hospitals and health systems started to scramble to understand whether the rule would apply to nonprofits. The American Hospital Association submits a letter calling it a “one-size-fits-all rule” Congress never authorized. The American Medical Association and emergency physicians, by contrast, express strong support for the ban, citing restrictions on physician mobility and patient access.
March 2023: The FTC extends the public comment deadline to April 19, 20923. The American College of Emergency Physicians submits a letter urging the FTC to finalize the rule as proposed. A survey finds 87% of physicians support the FTC’s move to ban noncompetes. The FTC ultimately receives more than 26,000 comments, with over 25,000 in support.
April 23, 2024: After more than a year of deliberation, the FTC finalizes the rule — setting a September 4, 2024 effective date. The rule would void nearly all existing noncompetes (except for senior executives earning over $151K in policymaking roles) and prohibit new ones. The FTC projects it would save up to $194 billionin healthcare costs over 10 years. Hospital groups slam it as a “double whammy” threatening recruitment and patient access.
April 24, 2024: The U.S. Chamber of Commerce files suit in the Eastern District of Texas, alleging the FTC lacks authority to issue rules proscribing “unfair methods of competition.” The AHA and FAH also oppose the rule. The FTC’s legal authority, its spokesperson told Becker’s, is “crystal clear.”
May 2024: A Fitch Ratings report flagged by warns the rule could pressure wages and increase staff turnover at nonprofit hospitals — particularly smaller and rural systems — while acknowledging a potential upside in expanded labor supply. The AHA argues nonprofit hospitals fall outside FTC jurisdiction; the FTC disagrees.
July 3, 2024: U.S. District Judge Ada Brown sides with Ryan LLC and the U.S. Chamber of Commerce, issuing a preliminary injunction blocking the Sept. 4 effective date while the case is decided. She finds the plaintiffs “likely to succeed on the merits” and calls the rule “arbitrary and capricious.” The AHA and FAH file an amicus brief urging full vacatur.
Aug. 20, 2024: In Ryan LLC v. FTC, Judge Brown makes the injunction permanent and vacates the rule nationwide, ruling the FTC “exceeded its statutory authority” and that the rule is “unreasonably overbroad.” The AHA’s general counsel calls it vindication. The FTC tells Becker’s it is “disappointed” and considering an appeal.
Oct. 18, 2024: Under the Biden-era FTC, the agency appeals Judge Brown’s ruling to the U.S.Court of Appeals for the Fifth Circuit. Separately, the AHA and FAH file a friend-of-the-court brief in early 2025 urging the appellate court to also vacate the rule, arguing it would distort the healthcare labor market.
Sept. 5, 2025: Under Trump-appointed leadership, the FTC votes 3–1 to dismiss its appeals in both Ryan LLC v. FTC and Properties of the Villages v. FTC. FTC Chair AndrewFerguson, who had originally dissented when the rule was issued, says the agency had exceeded its authority. The noncompete ban is over — noncompetes remain governed by state law, with four states maintaining full bans and 33 others imposing varying restrictions.
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