Physical Therapists who might be reluctant to look for new gigs due to noncompete clauses have the FTC in their corner.

On Jan. 5, the agency proposed banning both new and existing noncompetes nationwide. This wouldn’t apply to Non-Disclosure Agreements (NDA) or a noncompete if you’re buying or selling a company, but the potential rule allows PTs the right to increase their incomes by working in multiple locations without fear of this agreement!

What exactly is a noncompete clause?

A non-compete agreement is a contract between an employee and an employer that restricts the employee from working for a competing company within a certain geographical area and/or for a specific time period after the termination of their employment, either by choice or by force. Often they have time and location limitations (e.g. 1 year 30 mile radius of the clinic). In the case of physical therapists, non-compete agreements can limit their ability to provide care to patients and restrict their career opportunities.

After leaving PT school, my professors, mentors and even some of my cohort warned me of getting locked into a Non-Compete agreement. Employers were using these to keep PTs from working at other clinics, “stealing patients,” and just to keep their clinics staffed. 

There are some states like California and North Dakota that have already done away with these clauses, and Florida which has banned them for physicians. The FTC argues that they trap workers and decrease competition, resulting in lower wages across the market and keep the growth of new business, entrepreneurship, and innovation stagnant.

Per the FTC:

  • Noncompetes affect ~20% of US workers.
  • Banning them could increase US workers’ earnings by $250B-$296B annually.

What about PTs?

One of the main ways non-compete agreements can affect physical therapists is by limiting their mobility. Physical therapists may need to move to different locations to care for family members or to take advantage of new job opportunities. However, if they have signed a non-compete agreement, they may not be able to work in their new location or with a competing company, limiting their career options.

Additionally, non-compete agreements can also restrict the ability of physical therapists to provide the best possible care to their patients. If a physical therapist is limited by a non-compete agreement from working with a patient who requires specialized treatment or with a patient who requires continuity of care, this can negatively impact the patient’s health and well-being.

Many Physical therapists also take up side jobs, per diem work, or small self owned practices to supplement their income. The ability to do this can be limited by a non compete that they signed when getting their first, or most recent job.

At the end of the day this is still a state-by-state rule until the FTC goes forward with the proposal. Dr. Brandon Smith does a great job of breaking down the current non-compete rules for each state in a great video here.

Did you sign a non-compete or lose a job opportunity because of a non compete? Let us know in the comments!