Are Nonprofit Hospitals Immune to FTC’s Non-compete Ban?

The FTC final rule, which forbids new non-compete contracts and bans organizations from enforcing existing non-competes with only a few exceptions, takes effect 120 days after its April 30^th publication in the Federal Register. McCarter & English Partner Khaled Klele spoke with Fierce Healthcare about the ban and explained that the FTC would apply a two-part test to determine whether an entity is bound by the rule. The FTC said such analyses would be “fact sensitive” and therefore would be conducted by the commission on a case-by-case basis, Kay said. Should the ban survive the courts, he added, the FTC would need to “clarify” some of the ambiguous language in the final rule with clearer definitions for employers.