Noncompete agreements: What veterinary professionals need to know
Noncompete agreements can take many forms, but typically they are part of a written employment agreement that restricts an employee who leaves a job from working in that field for a specific time period in a certain geographic area.
Here's an example of how it could look for an employee: An associate veterinarian at an animal hospital may have a noncompete provision in her employment contract indicating that once employment ends with that practice, she agrees not to work at another veterinary practice for a specific amount of time within a specified area around the practice. Since violating the provision could subject her to damages for breaching the agreement, she feels compelled to stay with the current employer instead of leaving to practice at a nearby hospital.
Here's an example of how it could look for an employer: A veterinary practice owner invests money and time building relationships and goodwill with clients, and training new employees. Noncompete agreements have historically been incorporated into employment contracts with associate veterinarians to prevent them from leaving a practice for a nearby location and taking clients with them.
Banned or allowed? Noncompete agreements in the news
On April 23, 2024, the (Federal Trade Commission) FTC voted to issue a rule banning the use of most noncompete agreements nationwide.
The U.S. Chamber of Commerce and several other business groups sued the FTC in an attempt to block the rule.
On August 20, 2024, the U.S. District Court for the Northern District of Texas blocked implementation of the FTC's rule, saying the FTC lacks legal authority to issue it. This decision means that the FTC cannot enforce the ban on noncompete agreements at this time, which was set to go in effect September 4. The FTC is now considering an appeal.
Bottom line: Since the rule was blocked, there is no change to existing noncompete agreements. Whether you're an employer or an employee, there is no immediate impact on current agreements.
What's in the FTC rule?
What you should do
Monitor the progress and developments of the litigation through trusted resources, like AVMA News. While It's always good to plan, we suggest avoiding major changes as a result of the FTC rule until the final outcome is known.