The laws and regulations surrounding noncompete agreements are rapidly becoming one of the most consequential, and contested, issues in physician employment.
With a national ban on noncompete agreements virtually out of the question under the current FTC leadership, numerous states have proposed or enacted their own restrictions surrounding noncompete agreements so far in 2026:
1. A bill that would ban employee noncompetes and related repayment agreements awaits signature from Washington Governor Bob Ferguson. The legislation would replace Washington’s current income-based restrictions surrounding noncompete agreements.
2. Iowa House lawmakers passed a bill that would prohibit noncompete agreements in employment contracts for physicians employed by the University of Iowa Health Care Feb. 26.
3. Representatives in South Dakota are deliberating a bill that would adjust the laws surrounding noncompete agreements for healthcare facilities. The bill would limit the use of contracts that prohibit use of commercial or residential property for any healthcare service in medically underserved communities or in areas with a medically underserved population, per federal law.
4. Legislators in New Jersey are likely to re-introduce legislation that would ban most noncompete agreements in the state. The legislation — Assembly Bill 5708 and Senate Bill 4385 — would ban noncompete agreements except for some cases of senior executives and would require employers to notify employees within 30 days of enactment that their noncompetes are no longer enforceable.
5. Lawmakers in South Carolina are considering banning noncompete clauses in physician contracts with a newly introduced bill. The bill, introduced in December, which unanimously passed out of a panel of House lawmakers Jan. 20, would ban any restrictions on where a physician can practice after their termination. The bill also outlines that the physician must also be allowed to continue their relationship with a patient per the patient’s request.
