The Federal Trade Commission (FTC) has decided to vacate a noncompete rule established by the previous administration. The decision, made on September 5 with a 3-1 vote, nullifies the rule that had classified certain contractual terms as unfair competition. These terms prevented workers from seeking specific employment opportunities after their contracts ended.
The American Hospital Association (AHA), in collaboration with the Federation of American Hospitals, opposed this rule since its proposal in 2023. They argued in an amicus brief that the rule "could create significant distortions in the health care labor market because the Commission lacks the statutory authority to apply the rule to nonprofit hospitals."
Additionally, on September 4, the FTC issued a request for information regarding noncompete agreements. The agency aims to "better understand the scope, prevalence, and effects of employer noncompete agreements," and gather data to potentially guide future enforcement actions.
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