Non-Competes for Therapists and Behavioral Health Staff: What Is Enforceable

If you read that non-competes were banned nationwide, that is out of date: the Federal Trade Commission's 2024 Non-Compete Clause Rule is no longer part of federal law.

In August 2024, a federal district court held, in Ryan LLC versus the FTC, that the agency issued the rule in excess of its statutory authority and that the rule was arbitrary and capricious, and set it aside.

On September 5, 2025, the FTC voted 3-1 to dismiss its appeals and accede to the vacatur; a final rule published in the Federal Register on February 12, 2026 then removed the Non-Compete Rule (16 CFR part 910) from the Code of Federal Regulations.

There is no federal rule banning employee non-competes — no compliance task, no worker notice, no federal deadline.

The topic is not dormant at the agency: in September 2025 the FTC Chairman sent letters to several large healthcare employers and staffing firms urging them to review their employment agreements, including restrictive covenants, and make sure they are appropriately tailored and lawful.

The FTC also reads Section 5 of the FTC Act as standing authority to investigate unjustified, overbroad or otherwise anticompetitive agreements case by case.

Nothing federal voids the clause in your offer packet — and nothing federal blesses it.

California voids the clauses for everyone, clinician or not: Business and Professions Code 16600 voids every contract that restrains anyone from engaging in a lawful profession, trade or business, except as the chapter allows, and courts read it broadly.

Since January 1, 2024, it has also been unlawful in California to include a non-compete clause in an employment contract or to require an employee to sign one that does not meet a statutory exception.

A contract void under the chapter is unenforceable regardless of where and when it was signed.

Minnesota Statutes 181.988 makes any covenant not to compete void and unenforceable, with narrow exceptions such as the sale of a business; North Dakota Century Code 9-08-06 voids any contract restraining anyone from exercising a lawful profession, trade or business, with limited exceptions such as the sale of a business's goodwill.

Oklahoma goes another way: Title 15, section 219A of the Oklahoma Statutes lets a former employee work in the same or a similar business as long as they do not directly solicit the former employer's established customers.

Washington joins this group soon: from June 30, 2027, all noncompetition covenants are void there regardless of when signed, and employers must make reasonable efforts to notify affected current and former workers by October 1, 2027.

Away from the ban states, the rules attach to who the employee is.

Illinois bars non-competes for employees earning $75,000 a year or less — rising to $80,000 on January 1, 2027 — and non-solicits for employees earning $45,000 or less, rising to $47,500 on the same date.

Massachusetts makes non-competes unenforceable against employees classified as non-exempt under the Fair Labor Standards Act.

Read the profession list before the headline: a "healthcare non-compete ban" may cover physicians, nurses and physician assistants only.

These statutes name behavioral health licenses or turn on patient care.

Montana: Montana Code Annotated 28-2-724 bars contracts with listed health care providers from restricting the provider, after the relationship ends, from practicing in any geographic area for any period, or from treating or soliciting the employer's current patients.

The list names licensed psychologists, social workers, professional counselors, addiction counselors, marriage and family therapists and behavioral health peer support specialists — behavior analysts are not named — and it does not apply to a sale of a practice.

Utah: from May 6, 2026, House Bill 270 (2026) voids a healthcare non-compete entered on or after that date with a listed healthcare worker: associate and licensed marriage and family therapists, behavioral health technicians and coaches, certified psychology residents, certified and clinical social workers, social service workers, clinical mental health counselors, substance use disorder counselors, psychologists and mental health therapists, and licensed behavior analysts and assistant behavior analysts.

Agreements signed earlier are not voided by the text, and a license holder whose job does not require or involve practicing under the license is excluded.

Virginia: Virginia Code 40.1-28.7:8, as amended in 2026, bars employers from entering into, enforcing or threatening to enforce a non-compete with anyone licensed, registered or certified by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology or Social Work — counselors, psychologists and social workers, plus behavior analysts, whom the Board of Medicine licenses.

South Dakota: under SDCL 53-9-11.2, a provision of a contract entered on or after July 1, 2023 that restricts a listed practitioner from practicing within their scope is voidable.

The list at 53-9-11.1 names licensed social workers, psychologists, professional counselors and professional counselors-mental health, marriage and family therapists, addiction and prevention professionals, and behavior analysts licensed under chapter 36-38.

Patient and client non-solicits within the general limits remain allowed, and the voidability rule does not apply to provisions effective on a sale of a practice.

Massachusetts: Massachusetts General Laws chapter 112, sections 135C and 129B void post-employment practice restrictions for licensed social workers and psychologists, and the rest of the contract survives.

Mental health counselors, MFTs and behavior analysts have no profession-specific section and fall under the general non-compete act.

Maryland: Maryland Code, Labor and Employment 3-716 voids non-competes for positions that require a Health Occupations Article license, provide direct patient care and pay $350,000 or less — professions are not named.

Above $350,000, a non-compete may last no more than 1 year and reach no more than 10 miles from the primary place of employment.

Illinois: under 820 ILCS 90/10(f), non-competes and non-solicits entered after January 1, 2025 are unenforceable for mental health services to veterans and first responders by a licensed mental health professional — a clinician licensed under Illinois' clinical psychologist, clinical social work and social work, marriage and family therapy, nurse practice or professional counselor acts — where enforcement is likely to increase the cost or difficulty of their care.

Behavior analysts are not in the definition.

Maine: Public Law 2026, chapter 718 (approved April 15, 2026) bars non-competes with any "health care practitioner" — an individual qualified or licensed under state law to provide health care services in Maine — who holds no ownership interest in their employer.

The definition names no professions, and an enforceable non-compete must recognize the individual's right to choose their own practitioner.

Two footnotes: from July 1, 2026, South Dakota also makes voidable restrictions on a "community services provider" working with or serving people with developmental disabilities after the job ends.

Maryland's rule turns on license issuance and direct patient care rather than a profession list, and Maine's chaptered text does not state its effective date — confirm both before relying on them.

The opposite trap is the "healthcare non-compete" law that does not name behavioral health licenses.

Colorado's 2025 amendment (SB 25-083) covers the practice of medicine, advanced practice registered nursing and dentistry regardless of income — not counselors, social workers, psychologists, MFTs or behavior analysts, who stay under Colorado's general income-threshold rules.

Pennsylvania's Fair Contracting for Health Care Practitioners Act (Act 74 of 2024) defines "health care practitioner" as medical doctors, osteopathic doctors, certified registered nurse anesthetists, certified registered nurse practitioners and physician assistants.

Oregon's SB 951 (2025) applies to "medical licensees" — physicians, nurse practitioners, physician associates and naturopathic physicians.

Texas' special healthcare rules, Texas Business and Commerce Code 15.50(b) and 15.501 as amended by SB 1318 effective September 1, 2025, cover physicians, dentists, professional and vocational nurses and physician assistants, leaving Texas counselors, social workers, MFTs, psychologists and behavior analysts under the general reasonableness test in 15.50(a).

Rhode Island General Laws 5-37-33 voids practice restrictions for licensed physicians only, and Florida Statutes 542.336 applies only to certain physician specialists.

Such statutes matter for the psychiatrists and PMHNPs on your staff — not for your counselors, social workers, MFTs or BCBAs.

Read the statute's own list before you rely on it.

None of the codes makes a non-compete or non-solicit legally void, and none of the code provisions this guide checked addresses restrictive covenants by name — enforceability stays a state-law question.

What the codes govern is transition conduct, exactly what these clauses try to restrain.

The NASW Code of Ethics tells social workers leaving an employment setting to inform clients of appropriate options for the continuation of services and of the benefits and risks of each option.

The APA Ethics Code's standard for psychologists entering employment or contractual relationships is to make reasonable efforts to provide for orderly and appropriate resolution of responsibility for client care if the relationship ends, with paramount consideration for the welfare of the client.

The ACA Code of Ethics bars counselors from using their places of employment or institutional affiliation to recruit clients for their private practices — and the 2014 code remains ACA's current version while a revision is under way.

Legislatures have written part of the same client-choice idea into statute.

Maine's 2026 law requires any enforceable non-compete with a health care practitioner to recognize an individual's right to choose their own practitioner.

Since May 6, 2026, Utah has also voided a non-solicitation agreement that prevents a healthcare worker from telling a patient where they currently work or will work.

And Montana's statute bars covered contracts from restricting a provider from treating or soliciting the employer's current patients.

In states without a ban or a profession-specific statute, enforceability turns on each state's own test — the levers below are the ones this guide verified.

Reasonableness limits: where non-competes are generally allowed, time and geography do the work.

In Texas, Business and Commerce Code 15.50(a) — the general rule — enforces a covenant ancillary to or part of an otherwise enforceable agreement at the time the agreement is made, to the extent that it contains limitations as to time and geography; that is the test Texas counselors, social workers, MFTs, psychologists and behavior analysts fall under.

Process defects: Illinois makes non-competes and non-solicits void unless the employer advises the employee in writing to consult a lawyer and gives at least 14 calendar days to review — that defect alone defeats the covenant.

Maine requires an employer to disclose before making an offer that a non-compete will be required, and to provide a copy at least 3 business days before requiring signature.

Drafting breadth: in California, narrow does not mean safe.

In Edwards versus Arthur Andersen (2008), the California Supreme Court rejected a "narrow-restraint" exception and held non-competition agreements invalid even when narrowly drawn, unless they fit a statutory exception.

The cost of guessing wrong: Virginia sets a $10,000 civil penalty for each violation of its ban, and Utah makes an employer that tries to enforce a covenant found unenforceable liable for the employee's arbitration costs, attorney fees and court costs, plus actual damages.

Utah and Virginia amended their statutes in 2026, Maine's law passed in 2026 and Washington's ban lands in 2027 — have employment counsel who practices in your state check the clause against the current statute before an offer goes out.

Non-solicitation clauses: Minnesota's ban expressly does not cover non-solicitation agreements or agreements restricting the use of client lists; Virginia allows customer non-solicits limited to customers the professional had material contact with during employment; South Dakota allows a non-solicit of a former employer's current patients or clients within the general geographic and temporal limits; and Maryland's ban does not apply to taking or using a client or patient list or other proprietary client- or patient-related information.

Montana's and Utah's client-choice limits above reach non-solicits too, and from June 30, 2027, Washington treats an agreement that directly or indirectly prohibits accepting or transacting business with a customer as a noncompetition covenant.

Repayment agreements: Virginia lets employers of health care professionals require repayment of recruitment, relocation, signing or retention bonuses and recruiting, education or training expenses from a departing professional employed fewer than five years — provisions the statute keeps valid even as it voids the non-compete.

Do not copy the structure across state lines: Montana's exception for repayment of loans, relocation costs, signing bonuses and education or tuition expenses is written for physicians only, and from June 30, 2027 Washington treats a provision requiring someone to return, repay or forfeit compensation as a consequence of engaging in a lawful profession as a noncompetition covenant.

Washington's text leaves open whether a pure stay-or-pay training repayment is caught.

Timing and structure: Utah still allows a non-compete inside a reasonable severance agreement mutually and freely agreed upon at or after termination, or one tied to the sale of a business where the worker receives value from the sale — a carve-out Montana's and South Dakota's statutes share.

One lever is not contract language: hiring.

A non-compete restrains the clinician who leaves; it does nothing about the vacancy.

If the worry is how long a chair stays empty, the behavioral health hiring hub collects the sourcing, screening and retention guides, starting with why clinicians leave.