If you are trying to answer the physician non compete by state question — will this clause actually keep me from practicing across town — the honest answer in 2026 has two parts. First, there is no federal rule protecting you, and the one that briefly existed is now formally erased. Second, your state legislature may have rewritten the rules within the last eighteen months, because 2025 produced the largest single-year wave of physician non-compete legislation in memory. The clause in front of you is governed entirely by the law of the state where you will practice, as it reads on the day you sign, and increasingly by whether you signed before or after a specific effective date. This guide maps that landscape: the federal picture stated precisely, the four categories every state falls into, the 2025 wave state by state, what courts actually weigh when they test a covenant for reasonableness, and the protocol to run before your signature goes on the page.
The federal ban is dead, and the record says exactly how it died
In April 2024 the Federal Trade Commission finalized a rule that would have banned most post-employment non-competes nationwide. That rule never took effect. On August 20, 2024, a federal district court in Texas vacated it nationwide in Ryan, LLC v. FTC, weeks before its scheduled effective date. The FTC initially appealed. Then, on September 5, 2025, the Commission voted to dismiss its appeals in both the Fifth and Eleventh Circuits and formally acceded to the vacatur. The administrative cleanup followed: a final rule published in the Federal Register removed the Non-Compete Clause Rule, formerly codified at 16 CFR part 910, from the Code of Federal Regulations effective February 12, 2026.
That is the complete chain. Rule finalized, vacated before effect, appeals abandoned, text deleted. There is no federal ban on physician non-competes in 2026, and your protection, if any exists, comes from state law.
One nuance keeps the federal picture from being a pure zero. The FTC announced, in the same September 2025 breath in which it abandoned the rule, that it would continue challenging non-competes case by case under its existing unfair-competition authority — and it has signaled particular interest in healthcare employers. Case-by-case enforcement is real but slow, targeted at specific companies, and useless as a plan for an individual physician deciding whether to sign. Treat it as background noise, not protection.
Important
If a recruiter, an administrator, or a colleague tells you "non-competes are unenforceable now because of the FTC," they are describing a rule that never took effect and no longer exists. Signing a covenant on that belief is how physicians end up commuting 40 miles past their old hospital for two years. Verify against your state statute, not against a headline from 2024.
Four categories, fifty states: the map that actually matters
Every state falls into one of four buckets for physicians. The bucket determines whether you are negotiating the existence of the clause or merely its dimensions.
| Category | What it means for you | States as of mid-2026 (not exhaustive) |
|---|---|---|
| Non-competes void for nearly all workers | The clause is dead ink regardless of your specialty | California (Bus. & Prof. Code § 16600), North Dakota (N.D. Cent. Code § 9-08-06), Oklahoma (Okla. Stat. tit. 15, §§ 217–219B), Minnesota (Minn. Stat. § 181.988, agreements after July 2023), Wyoming (SF 107, contracts on or after July 1, 2025) |
| Physician or healthcare non-competes void | General workers can be bound; you cannot | Massachusetts (M.G.L. c. 112, § 12X), Delaware (19 Del. C. § 2707), New Hampshire, Rhode Island, New Mexico, South Dakota, Colorado (SB 25-083, agreements after August 6, 2025), Arkansas (Act 232, effective August 5, 2025), Indiana (hospital-employed physicians, SB 475, agreements on or after July 1, 2025), Oregon (SB 951, 2025), Montana (HB 620, effective January 1, 2026), Maryland (direct-patient-care clinicians earning $350,000 or less, effective July 1, 2025) |
| Enforceable but statutorily capped | The clause survives, with hard ceilings you can cite | Texas (SB 1318: maximum one year, five-mile radius, buyout capped at one year of salary and wages, agreements on or after September 1, 2025), Maryland for clinicians earning over $350,000 (maximum one year and ten miles) |
| General reasonableness test | Enforceability decided covenant by covenant in court | Most remaining states — courts weigh duration, geography, and the employer's legitimate business interest |
Three reading instructions for this table. First, effective dates carry real weight because nearly all of these statutes apply prospectively: a contract signed in 2023 in Arkansas or Wyoming is not automatically freed by a 2025 law. Second, definitions matter — Indiana's ban covers physicians employed by hospitals and hospital systems, not physicians employed by private groups; Maryland's ban turns on total compensation and direct patient care. Third, this survey is a snapshot of a moving target. Several other states enacted narrower healthcare covenant rules in 2024 and 2025, and more bills are pending in every legislative session. Confirm your state's current statute before relying on any table, including this one.
Key insight
Prospective-only application creates a quiet trap and a quiet opportunity. The trap: your old agreement stays enforceable in a "ban" state. The opportunity: renewal often counts as a new agreement. In Texas, an employment agreement that auto-renews after September 1, 2025 falls under SB 1318's caps even though it was originally signed years earlier. If you practice in a state that just changed its law, the date your contract renews may matter more than the date you signed it.
The 2025 wave: one legislative year redrew the physician map
For context on why so much of the table above is stamped 2025, here is what happened in a single legislative cycle.
Arkansas enacted Act 232 (Senate Bill 139), signed March 4, 2025 and effective August 5, 2025, which voids covenants that restrict the right of a physician — defined to include MDs and DOs licensed under the Arkansas Medical Practice Act — to practice within the physician's scope of practice. The statute is silent on retroactivity, so pre-existing agreements sit in litigation limbo.
Indiana passed Senate Bill 475, effective for agreements entered on or after July 1, 2025, banning non-competes between physicians and hospitals, hospital parent companies, and hospital systems. Physicians employed by independent private groups remain outside the ban.
Maryland's House Bill 1388 reached its second phase on July 1, 2025: non-compete and conflict-of-interest clauses became void for clinicians licensed under Maryland's Health Occupations Article who provide direct patient care and earn $350,000 or less in total annual compensation. Above that line, covenants survive but are capped at one year and a ten-mile radius.
Montana enacted House Bill 620, which expands the state's prior prohibition — previously limited to certain specialties — to all licensed physicians, banning post-employment non-compete and patient non-solicitation provisions effective January 1, 2026. A companion 2025 law had already extended protections to nurses, advanced practice registered nurses, physician assistants, and naturopathic physicians.
Texas took the capped-but-enforceable route with Senate Bill 1318, effective for agreements entered or renewed on or after September 1, 2025. Physician non-competes must now include a buyout capped at the physician's total annual salary and wages at termination, replacing the older "reasonable price or arbitration" standard, and are limited to one year in duration and a five-mile radius from the physician's primary practice location. The statute also extends non-compete rules to dentists, nurses, and physician assistants for the first time.
Colorado, Oregon, and Wyoming rounded out the year. Colorado's SB 25-083 voids non-compete and non-solicitation covenants for physicians, physician assistants, advanced practice registered nurses, dentists, and certified midwives, for agreements entered after August 6, 2025. Oregon's SB 951, with provisions effective June 9, 2025, voids non-competes for physicians, physician assistants, and nurse practitioners as part of a broader corporate-practice reform. Wyoming's SF 107 voids most non-competes for all workers, with a specific provision voiding covenants that restrict a physician's right to practice medicine, for contracts entered on or after July 1, 2025.
Count them: seven states materially rewrote physician covenant law with effective dates in a single twelve-month span, all in the restriction-tightening direction. No state moved the other way. That direction of travel is itself useful information when you negotiate — employers in reasonableness states know which way the wind blows, and a request to narrow a covenant no longer reads as radical.
What "reasonable" means when a judge actually weighs your covenant
In the roughly thirty states with no physician-specific statute, enforceability turns on a common-law reasonableness test, and the pattern of that litigation is worth understanding before you sign anything. Courts generally ask three questions: does the employer have a legitimate protectable interest, is the restriction no broader than necessary to protect it, and does enforcement harm the public.
Radius is litigated against the geography of your patient base, not the map. A 15-mile radius in a dense metro can wall you out of forty hospitals; a 30-mile radius in a rural state may be upheld because patients themselves travel that far. Courts have blessed county-wide restrictions for rural practices and struck 10-mile restrictions in cities where the drawn circle captured most of the market. The question a judge asks is whether the radius tracks where your former employer's patients actually come from.
Duration clusters tightly. One year rarely fails on duration alone. Two years is commonly enforced but increasingly contested. Three years and beyond draws skepticism in most jurisdictions, and the new statutory caps — one year in Texas and in Maryland's upper tier — are compressing expectations everywhere else.
Specialty scarcity cuts in your favor through the public-interest prong. When enforcement would strip a community of its only maternal-fetal medicine specialist or one of two pediatric neurosurgeons in a region, courts have refused injunctions on patient-access grounds even where the covenant was otherwise reasonable. The scarcer your specialty locally, the weaker the injunction case against you — and the stronger your negotiating position before signing.
One structural fact controls how these fights actually end: what the employer wants is an injunction, not damages. Proving dollar damages from one departed internist is hard; getting a temporary restraining order that stops you from starting the new job — or sending a letter that spooks your new employer into rescinding the offer to avoid a tortious-interference claim — is the real weapon. This is why the enforcement reality favors preparation over litigation confidence. A covenant that would probably lose at trial can still cost you a job offer this month, because the new employer's counsel does not want to fund the test case. For the anatomy of these clauses and the other traps that ride alongside them, see the contract red flags module.
Price the exit before you sign: the pre-signature protocol
Everything above compresses into a protocol you run before signing, when your bargaining power is at its lifetime maximum.
Know your state first. Pull the actual statute for the state where you will practice — not a blog summary — and place it in one of the four categories. If you are in a void state, ask for the clause's removal on the record; a void clause left in a contract still gets waved at departing physicians who do not know better. Contract review fundamentals live in the contract basics module.
Negotiate the dimensions. In reasonableness states, ask for: a radius measured from your primary practice site only, not every facility in the system; a term of one year; carve-outs that void the covenant if you are terminated without cause or the employer breaches; and exclusions for academic, telehealth, and locum work.
Ask for the buyout. A buyout clause converts an unpriceable restriction into a number, and Texas has now written the market anchor into statute: one year of salary and wages, maximum.
Example calculation
Assumptions, stated explicitly:
- Hospitalist, $310,000 salary, non-compete of 18 months and 15 miles in a metro area
- New opportunity inside the radius pays $335,000
- Litigation estimate from counsel: $60,000 to $150,000 in fees, outcome uncertain
Option A — honor the covenant, take a job 16 miles out: $0 in cash, but a 45-minute incremental commute ≈ 340 hours per year of unpaid drive time. Option B — negotiated buyout at 0.5× salary: $155,000, deductible timing aside, and you start the $335,000 job immediately. Salary differential recovered: $25,000 per year, plus the commute hours. Option C — take the in-radius job and litigate: $60,000 to $150,000 in fees, months of uncertainty, and the new employer may withdraw rather than receive a cease-and-desist letter.
The buyout you negotiate at signing, when it costs the employer nothing to grant, is what makes Option B exist at all. Asking for buyout language before you sign is free. Buying your way out after a dispute starts is not.
Plan the exit while you are happy. The covenant matters most on the day you resign, which is exactly when you will have the least time to deal with it. The exit checklist for changing jobs covers the sequence; the deeper anatomy of these clauses is in the companion piece on physician non-compete clauses.
Quick takeaway
Four moves, in order: identify your state's category from the statute itself; negotiate radius, duration, and carve-outs down before signing; convert the restriction into a priced buyout; and re-check the law at every contract renewal, because renewal is often what pulls you under a newer, friendlier statute.
Common questions
The FTC banned non-competes — does that not protect me?
No. The 2024 FTC rule was vacated by a federal court before it ever took effect, the FTC dismissed its own appeals in September 2025, and the rule text was removed from the Code of Federal Regulations effective February 12, 2026. The FTC still pursues individual employers case by case, but there is no federal rule you can point to. Your state statute is the controlling law.
I signed my contract before my state banned physician non-competes. Am I free?
Probably not automatically. Most of the 2025 statutes — Wyoming, Indiana, Colorado, Texas among them — apply only to agreements entered into, or in some cases renewed, on or after the effective date. Arkansas's statute is silent on the question. Whether your older covenant survives is a question for a licensed employment attorney in your state, and the answer may hinge on your next renewal date.
Can my employer actually stop me from working, or just sue me for money?
The realistic weapon is the injunction and the threat of one. Employers rarely chase damages; they seek court orders blocking the new job, or send letters that make your new employer reconsider. This is why a covenant with weak trial prospects can still have strong practical teeth, and why negotiating scope before signing beats planning to win in court later.
Does the non-compete still bind me if I am fired without cause?
It depends entirely on the contract and the state. Some statutes and some courts refuse enforcement when the employer ends the relationship without cause; many do not address it. This is precisely why a termination-without-cause carve-out belongs on your negotiation list — it converts an ambiguous equity argument into contract text.
What to do next
- Identify the state where you will actually practice and read its current non-compete statute — the citation, not a summary — before your next signature.
- Place your draft covenant in one of the four categories above and mark every dimension: radius, duration, activity scope, and what triggers it.
- Draw the radius on a map and list every hospital and practice inside it; that circle is the real cost of the clause.
- Ask, in writing, for a buyout clause and a termination-without-cause carve-out before you sign — both requests are free.
- If you already signed in a state that changed its law in 2025, calendar your renewal date and have a licensed employment attorney in your state review whether the new statute reaches you.
- Work through the contract basics and contract red flags modules before the next draft lands in your inbox.
The state-by-state landscape will not sit still — at least a half-dozen legislatures have physician covenant bills pending as of mid-2026, and every one of the citations above deserves a fresh look the year you use it. The protocol, though, is stable: statute first, dimensions second, buyout third, and nothing signed on the strength of a headline. The protocol above works with or without us. This is education, not individualized financial advice.