This week, Federal Trade Commission (FTC) Chairman Andrew N. Ferguson issued a formal letter to healthcare providers and employers regarding the use of non-compete agreements in contracts with healthcare professionals.
The letter states in part:
“Available information suggests that many healthcare employers and staffing companies include noncompete agreements (‘noncompetes’) in employment contracts that may unreasonably limit employment options for vital roles like nurses, physicians, and other medical professionals. Noncompetes may have particularly harmful effects in healthcare markets where they can restrict patients’ choices of who provides their medical care—including, critically, in rural areas where medical services are already stretched thin.” FTC Letter
Why This Matters
While the broader Trump administration has generally taken a more lenient approach to non-compete enforcement, this FTC action signals a clear carve-out for healthcare due to its critical impact on patient access and workforce shortages.
The letter reflects growing concern over the imbalance between workforce supply and patient demand:
- There are an estimated 1.7 million nurses working as travel clinicians.
- Many of these contracts include significant financial penalties for switching hospitals directly or working through another agency.
- These restrictions further limit hospitals already struggling with workforce shortages, particularly in rural and underserved regions.
Implications for Hospitals and Agencies
The FTC’s stance represents a direct warning: healthcare employers and staffing agencies may face scrutiny if their contracts are found to unreasonably restrict worker mobility or patient choice.
For hospitals, this is both a challenge and an opportunity:
- Challenge: Existing MSP and staffing contracts may need to be reviewed for compliance.
- Opportunity: Hospitals can align with the FTC’s direction by adopting more flexible workforce models that prioritize patient access and clinician freedom.
A Step Toward Restructuring Healthcare Staffing
The FTC’s involvement may be the beginning of a much-needed shift in how the healthcare workforce is managed. By pushing back against restrictive non-competes, regulators are signaling support for:
- Greater clinician mobility
- Reduced barriers for hospitals to hire directly
- Improved patient access to care
This development represents a win for patients and sets the stage for rethinking how hospitals and staffing agencies structure their workforce agreements.
