Healthcare Economist August 30, 2024
As of 2007, about half of physicians had noncompete clauses (“noncompetes” for short) in their contracts. However, a recent FTC rule severely limits when they could be used.
What specifically did the new FTC rule say about non-competes? Fuse Brown et al. (2024) provide a helpful summary.
The final FTC rule declares all new noncompete clauses or agreements between an employer and employee to be unfair methods of competition, violating Section 5 of the FTC Act. Existing noncompete clauses are now unenforceable, except for prior agreements with “senior executives” who earn over $151,164 annually and serve in policy-making positions.
The rule defines a “noncompete clause” as “a term or condition of employment that prohibits a worker from, penalizes a...
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