The Federal Trade Commission has recently approved a noncompete ban that could have a significant impact on the health care industry. The rule, which was passed by a three to two vote, aims to eliminate noncompete agreements across all sectors of the economy. This change is expected to lead to more new businesses and higher earnings for workers.
However, it is likely that the noncompete ban will face legal challenges and may not take effect for years, if ever. The contentious nature of the rule means that it will likely be tied up in litigation before it can be fully enforced. One important aspect of the noncompete ban is that it does not apply to nonprofit companies. The FTC only has jurisdiction over for-profit companies, so the ban will not affect most hospitals, which are nonprofit, and some of the largest health insurers in the country. This means that the ban may not have as broad of an impact on the health care industry as originally thought.