Empowering Nurses at the Bedside and in Business

Non-Competes in Nursing

The Federal Trade Commission (“FTC”) has proposed a ban on non-compete employment contracts thinking this will improve wages of health care workers. 

Covenants not to compete, also known as non-compete agreements, are legally binding contracts between an employee and an employer.  These agreements prohibit employees from working for a competitor or starting their own competing business for a certain period of time after their employment with the original employer has ended. 

These agreements are used to protect the employer’s interest in the training and development of their employees.  However, due to the high demand for nurses, these agreements can limit a nurse’s ability to find new employment and advance their career. It is a restraint on trade (ability to work). 

The nurse would either have to move away or provide care in a different type of patient care setting in order to be compliant with the covenant not to compete.  In some states, covenants not to compete for nurses are illegal or unenforceable because it restricts the essential service of health care professionals to provide care in the community. 

The National Nurses Association, the largest union for registered nurses, agrees with the FTC proposed ban.  Otherwise, non competes hold nurses hostage to working in that facility and they cannot speak out about unsafe conditions and can’t exercise professional judgment required to provide safe and effective nursing care.  When these types of agreements are in place, patients suffer. 

The FTC is also considering banning “training repayment agreement provisions” (TRAP) where employers pay for training and the nurse is required to stay there for a certain period of time.  These are common with nurse residency programs or sign on agreements.  If a nurse chooses to leave early because they were not given what they were promised or the patient care at the facility is poor or the staffing ratio is unsafe or for any reason, the nurse will have to repay the facility some, if not all, of the money incurred in training. 

In law, covenants not to compete are illegal.  I have not seen many nurses sign a covenant not to compete agreement, but I have seen them sign the training repayment agreement provisions.  Either way, I think these covenants not to compete should be illegal because nurses should feel free to go where they want to find an environment that best suits them. 

By giving nurses the freedom to go where they choose, I believe it will improve patient care.  Holding nurses hostage and requiring them to stay for a period of time because the facility paid the money towards their training should also be banned. 

If a nurse chooses to leave because of unsafe patient care and poor staffing ratios, why should the nurse be punished?  Or if the nurse loses her job for whatever reason. Maybe because the employment was “a bad fit” and the nurse is required to pay it back, that’s a problem as well. 

Lastly, if you work for an agency and sign an agreement that the facility where you are placed is unable to hire you directly should also be banned.  If you work for the agency for a period of time at the facility, you should be able to work there as a direct hire. 

 Until the FTC ban is an official regulation, if you are asked to sign an agreement with a covenant not to compete or a training repayment agreement provision, I suggest you speak to an attorney who may be able to negotiate these terms for you in your best interest. 

Have you been asked to sign a contract with a covenant not to compete?  Or a training repayment provision?  I’d love to hear what you have to say in the comments below. 


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