In a recent article by PartBNews, Atlanta Partner Chet Hosch shared insights regarding a district court's recent ruling blocking the FTC's noncompete rule. Hosch notes that, despite the preliminary injunction, other federal courts may respond differently, pointing to a case in Pennsylvania where a court denied a motion to stay the FTC rule during the proceedings.

"Since the Texas court enjoined it and the Pennsylvania court found no reason to enjoin it, it's possible that would set the stage for courts of appeal to address the lower court ruling," Hosch says. "If the circuit court in Pennsylvania were to conclude that the underlying court's ruling were correct"—and the Fifth Circuit supports Brown's decision—"that might set the stage for the Supreme Court to review a conflict between the circuits."

With the likelihood of a federal ban low, those interviewed recommended continuing to use contracts with restrictive covenants while being mindful of complicating factors. Hosch mentioned that the FTC ruling resembles a California law from 2023, which prevents employers from enforcing non-compete agreements. This law was extended in 2024 to cover all non-compete agreements in California, regardless of other laws. For states with less progressive laws, there is still caution regarding non-compete agreements for doctors. States may limit these agreements to a small area due to concerns about doctor shortages and rising healthcare costs, allowing doctors to work nearby instead of being completely barred.

Lastly, Hosch advises ensuring all legal standards for non-competes are met. In Georgia, for example, you can bar solicitation of patients, but you cannot prohibit accepting services requested by patients. “It’s solicitation [of former patients] that is prohibited, not the acceptance of work,” he says.

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