Blog August 22, 2023
The Intricacies and Implications of Florida’s Physician Non-Compete Law and the Upcoming FTC Decision



Non-compete clauses have been a part of employment contracts for many years, often restricting professionals from working for competitors or starting their own firms for a designated period and within a specified geographical area. While non-competes are generally enforceable, the scope varies from state to state. In Florida, non-compete agreements are particularly stringent, often restraining physicians from practicing within extensive geographical boundaries for significant time spans. However, the law also includes a carve-out for specialist physicians in rural Florida counties, intended to balance market competition and healthcare accessibility.


Amidst these local complexities, a new layer is being added to the equation— an upcoming Federal Trade Commission (FTC) decision on the enforceability of non-competes. This article explores the contours of Florida’s non-compete laws for physicians, delves into the specialist carve-out, and discusses how the upcoming FTC decision could reshape the landscape of physician employment agreements in the state.



The Florida Non-Compete Statute: An Overview

Florida Statute § 542.335 governs non-compete agreements in the state. According to the statute, non-compete agreements are enforceable provided they are reasonable in time, area, and line of business. Unlike other states that offer a more lenient approach, Florida tends to uphold these clauses, except in cases where they are proven to impose an “overly broad” restraint.


For physicians, this law has long been a point of contention. The provisions can lead to limited employment opportunities after leaving a job, forcing doctors to either relocate or change fields. This is not just an issue for the physicians, but it also impacts patients who have fewer choices when seeking care.



The Carve-Out: Specialist Physicians in Rural Counties

Florida law makes a unique exception in its enforcement of non-compete agreements for “specialist physicians” who practice in “rural counties.” In essence, if a physician with unique specializations chooses to work in a rural area, the non-compete clauses can’t be used to prevent them from practicing within that rural region. This carve-out is intended to prevent a drain of specialized skills from rural areas, which already struggle with healthcare accessibility.


The term “rural county” is defined under Florida Statute § 381.0406(2)(d) and usually includes counties with a population of fewer than 100,000 people. “Specialist physicians” are generally defined as those who have completed advanced education and training in a specific field of medicine and are often board-certified.



Balancing Act: Market Competition vs. Healthcare Accessibility

The idea behind the carve-out is to strike a balance between the competitive market and the need for specialized healthcare services in rural areas. Without this provision, rural counties could face an exodus of specialized skills, given that larger health systems could, theoretically, lock specialists into non-compete agreements that restrict them from serving smaller communities.


However, critics argue that the carve-out doesn’t go far enough. It applies only to specialist physicians and rural counties, leaving general practitioners and other healthcare providers in these areas still subject to the stringent non-compete laws. Furthermore, specialists in urban areas, who arguably also provide essential services, are left in the lurch.



The Upcoming FTC Decision: A Game-Changer?

Currently, the Federal Trade Commission (FTC) is in the process of reviewing non-compete agreements, and a ruling is expected soon. While the specifics are yet to be revealed, a federal mandate could override state laws, including Florida’s statute on physician non-competes.


If the FTC takes a more lenient approach, this could open doors for physicians currently tied by restrictive non-compete clauses. This change could have a ripple effect, benefiting not just healthcare providers but also consumers who would potentially have more options when seeking medical care.



Possible Scenarios Post-FTC Decision

1. Full Ban on Non-Competes: A drastic change, although unlikely, would be a complete ban on non-competes for physicians. This could lead to a seismic shift in how healthcare is provided, potentially boosting competitiveness but also possibly disrupting existing systems.


2. Limited Enforceability: The FTC could rule that non-compete agreements are only enforceable under certain conditions, such as when a physician is given a significant severance package, or when the non-compete clause is deemed reasonable in scope and duration.


3. Status Quo Maintained: Alternatively, the FTC might decide that the matter is best left to individual states, thereby maintaining the status quo and leaving the Florida Statute intact.



Implications for Florida

Should the FTC decide to limit the scope or enforceability of non-compete agreements, Florida’s healthcare system could see several changes:


Increased Mobility for Physicians: A less restrictive approach would make it easier for physicians to switch employers, contributing to a more dynamic job market.


Enhanced Patient Choice: Patients would likely have more options when it comes to selecting healthcare providers, which could drive down costs due to increased competition.


Impact on Rural Healthcare: If the FTC ruling effectively nullifies Florida’s rural carve-out, it could either expand access further or disrupt existing arrangements, depending on the specifics of the federal mandate.




Florida’s non-compete law for physicians and its carve-out for specialists in rural areas represent the state’s attempt to reconcile market competition with healthcare accessibility. As we await the FTC’s impending decision on non-compete agreements, stakeholders are bracing for what could be a substantial shift in physician employment dynamics and healthcare service provision. Regardless of the outcome, the decision is poised to have a lasting impact on how medicine is practiced in the Sunshine State.


Only time will tell how these intricate legal frameworks will ultimately coalesce to shape the future of healthcare in Florida and beyond.