Noncompete agreements, and the laws that regulate them, are rapidly becoming one of the most consequential, and contested, issues in physician employment. As states tighten restrictions on noncompetes, lawsuits multiply and specialty groups push for federal action, these contract clauses are increasingly shaping where clinicians can practice, how health systems compete and what workforce mobility will look like in 2026.
Here are five key updates defining the noncompete landscape in 2026:
1. Noncompete regulation remains highly fragmented across states in 2026: Nearly 1 in 5 U.S. workers are bound by a noncompete agreement, according to data released Jan. 13 by the Economic Innovation Group.
Noncompete agreements continue to be regulated at the state level, with only a handful of states, including California, Minnesota, Montana and North Dakota, broadly banning them, while many others allow enforcement with varying restrictions on scope, duration or healthcare-specific provisions. These state-by-state differences are increasingly shaping how physicians and other healthcare professionals navigate job changes and practice transitions.
2. States are increasingly restricting physician noncompetes, with income caps, time limits and specialty carve-outs: According to a Sept. 16 report from the American Medical Association, several states have moved in the past year to curb noncompete agreements in physician contracts.
Arkansas and Wyoming recently enacted full bans, while other states have adopted targeted restrictions. Oregon voided many physician and healthcare provider noncompetes in 2025, Maryland banned them for physicians earning under $350,000 and limited higher earners to one year and 10 miles, while Pennsylvania capped enforceability at one year only if a physician voluntarily leaves.
Texas now limits physician noncompetes to one year and a 5-mile radius and caps buyout clauses at no more than a physician’s annual salary.
3. Lawsuits and federal policy shifts are keeping noncompetes in flux across healthcare: Beyond state legislation, noncompete agreements continue to draw legal and regulatory scrutiny in healthcare.
Physician groups have warned the Federal Trade Commission that geographic restrictions can worsen consolidation and limit patient access, while recent lawsuits have highlighted how noncompetes can shape competition and physician mobility. Meanwhile, the FTC voted in September to dismiss its appeal defending a 2024 noncompete ban, meaning the rule will not take effect, though federal regulators say they will continue pursuing enforcement actions through antitrust authority.
4. Physician groups are urging federal action, warning noncompetes can limit access to care: On Nov. 4, the Society of Cardiovascular Angiography and Interventions told the FTC noncompete clauses often function as “contracts of adhesion” that restrict physicians’ ability to change jobs without leaving their region. SCAI cited FTC research estimating that 45% of physicians are bound by noncompetes and warned that enforcement can worsen consolidation and even leave communities with only one remaining specialist, creating serious patient access risks.
5. Buyout clauses and contract design are becoming part of the reform debate: Physicians are increasingly questioning how noncompete agreements are structured, including the length of restrictions and the cost of buyouts. In a recent physician commentary, neurologist Sharisse Stephenson, MD, urged states to allow fair-market buyout options and require hospital systems to justify noncompete use, particularly in shortage areas. As scrutiny grows, contract structure, not just enforceability, is becoming a central issue in physician employment negotiations.