On January 5, 2023, the Federal Trade Commission (FTC) proposed ending noncompete agreements. The proposal would outlaw not only new agreements, but also existing ones. Moreover, it would also cover some practice sales, which could dramatically impact values.

These noncompete agreements typically prevent employees (usually associates and/or partners) from leaving your practice to join a competitor, or setting up a new practice within a limited period of time and a limited geographical area after their employment ends. The FTC proposal goes even further to cover noncompetes entered into in connection with the sale of a partial interest in your practice, as such agreements would not be enforceable unless the restricted person (seller) owned at least 25% of the practice.

Reaction To Proposal

The FTC is providing a 60-day period for comments on this radical proposal and reaction has been both swift and intense, says Patrick Craig, JD*, a corporate attorney with McGill and Hassan, P.A., a law firm specializing in dental practice employment matters.

Change Is Likely

While the FTC is likely to implement some restrictions on noncompetes, Craig says there’s a high probability that one or more of the following