In an analysis published Sept. 21, Proskauer Rose recently published a map of a rapidly fragmenting state noncompete landscape.
The analysis, published on its Law and the Workplace blog, warned that employers, including health care systems, face an increasingly complex patchwork of rules. Authors Steven Pearlman and Brenna McLean wrote that “for a brief moment, noncompete law was headed toward a single national rule” before splintering across states.
That brief moment ended when the U.S. District Court for the Northern District of Texas ruled in Ryan LLC v. FTC that the Federal Trade Commission lacked statutory authority to issue its 2024 noncompete rule. The FTC abandoned its appeal, leaving regulation to the states.
Several states have since moved to restrict health care-specific noncompetes:
1. The U.S. District Court for the Northern District of Texas ruled in Ryan LLC v. FTC that the Federal Trade Commission lacked statutory authority to issue its 2024 noncompete rule, and the FTC has since abandoned its appeal.
2. Pennsylvania’s Fair Contracting for Health Care Practitioners Act, effective Jan. 1, 2025, voids noncompetes for practitioners.
3. Texas enacted a 2025 law capping noncompetes for physicians, dentists, nurses and physician assistants to one year within a five-mile radius.
4. Virginia now prohibits noncompetes for health care professionals outright.
5. Minnesota, Wyoming and Washington have adopted mobility-first bans on employment noncompetes.
6. Illinois’ Freedom to Work Act sets a $75,000 compensation threshold for enforceable noncompetes, rising to $80,000 on Jan. 1, 2027.
7. Florida’s 2025 CHOICE Act moves the opposite direction, validating four-year garden-leave and noncompete agreements, while New York’s Trapped at Work Act (effective Dec. 19, 2026) and California’s “stay-or-pay” law (effective Jan. 1, 2026) separately target functional noncompetes such as training repayment agreements.
8. Mr. Pearlman and Ms. McLean advise employers to reassess restrictive covenants against each state where they operate as the legal landscape continues shifting.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
