States Take Lead on Health Noncompete Limits With FTC Ban Tossed

A federal judge’s ruling blocking the FTC’s nationwide ban on noncompetes is likely to further spur legislation in states, where lawmakers have seen success in limiting restrictive employment contracts among health-care professionals.

The fate of the Federal Trade Commission’s rule is tenuous after a judge from the US District Court for the Northern District of Texas said this week that the agency lacked legal authority to prohibit nearly all employee noncompetes. An FTC spokesperson said the agency was “seriously considering” an appeal.

Employment attorneys and health policy analysts say proponents of limits on noncompetes in health care are better suited ...