Physician Non-Competes in Florida After the FTC Rule

A lot of Florida healthcare employers spent 2024 bracing for their physician non-competes to vanish. They didn't. Understanding why is the difference between managing your workforce on rumor and managing it on the law that actually governs.

In April 2024 the Federal Trade Commission issued a rule that would have banned most non-compete agreements nationwide. For a healthcare sector that runs heavily on physician restrictive covenants, it landed like a thunderclap. Then the courts intervened: a federal district court in Texas set the rule aside on a nationwide basis before its effective date, holding the FTC had exceeded its statutory authority. The rule never took effect, and the matter has continued through appeal.

The practical upshot for Florida employers: nothing federal changed your enforceable covenants. The law that governs your physician non-competes today is the same one that governed them before — Florida's restrictive-covenant statute. (This area moves quickly; always confirm the current status of the federal rule and any successor rulemaking before relying on it.)

What Florida law actually requires: Fla. Stat. § 542.335

Florida is, by national standards, an employer-friendly jurisdiction for restrictive covenants. Section 542.335 makes a non-compete enforceable if the employer can show two things: (1) a legitimate business interest justifying the restraint, and (2) that the restraint is reasonably necessary in time, area, and line of business to protect that interest. Critically, the statute instructs courts not to construe the covenant narrowly against the drafter and not to weigh the hardship on the departing physician — a posture that distinguishes Florida from most states.

Legitimate business interests recognized by the statute include substantial relationships with specific patients and referral sources, patient goodwill associated with a practice or geographic location, and confidential business information. For a medical practice, the patient and referral-source relationships are usually the heart of the matter.

The healthcare-specific wrinkles

• Duration presumptions. For covenants tied to a former employee, the statute treats up to six months as presumptively reasonable and more than two years as presumptively unreasonable — with the space in between turning on the facts. Most physician covenants live in the 1–2 year range and must be justified accordingly.
• Geographic scope. The radius has to map to where the practice actually draws patients. A countywide restriction for a Sarasota practice reads very differently than the same radius dropped onto a dense metro.
• "Blue-penciling." Florida courts can modify an overbroad covenant to make it reasonable rather than void it entirely. That cuts both ways: it's a safety net for sloppy drafting, but it's no substitute for a covenant that was reasonable to begin with.
• Patient-care exceptions. Drafting should account for continuity-of-care obligations and any specialty-specific access concerns — a covenant that would leave a community without a needed specialty invites both equitable and policy pushback.

The covenant that survives is the one that was narrowly tailored on day one — not the one you hope a court will rescue at the injunction hearing.

What healthcare employers should do now

• Don't tear up your covenants. They remain enforceable under Florida law. Reacting to a blocked federal rule by abandoning protection is the costliest possible misread.
• Audit for tailoring, not just presence. Pull your physician agreements and test each covenant against § 542.335: identifiable legitimate interest, defensible duration, geography that matches your actual draw area.
• Tie the restriction to the interest. Pair non-competes with well-drafted non-solicitation (patients and staff) and confidentiality provisions, which are often easier to enforce and may protect the same interest with less friction.
• Coordinate with deal documents. In an acquisition, covenants given by selling physician-owners are evaluated under different, more permissive standards than ordinary employment covenants — structure them deliberately, not by copy-paste from the employment template.
• Watch the federal track. The FTC matter and any new rulemaking or state-law shifts can change the calculus. Build agreements that don't collapse if the federal landscape moves.

The headline risk of 2024 turned out to be a near-miss. The real, ongoing risk is quieter: covenants that were never tailored well enough to enforce when a key physician walks out the door. That's the one worth fixing now.