The FTC’s proposed ban on non-compete agreements in 2024 could have reshaped employment in med spas by allowing employees to switch jobs or start their own practices without restrictions. However, a federal court blocked the rule, leaving non-competes enforceable under state laws. Here’s what you need to know:
- Non-competes remain valid: Med spas can still use them to prevent employees from joining competitors or starting rival businesses, depending on state laws.
- Alternative protections: Non-disclosure agreements (NDAs) and non-solicitation clauses remain enforceable and can safeguard sensitive information like client lists and trade secrets.
- Employee mobility: The blocked rule highlighted the growing trend of prioritizing worker flexibility, with some states already restricting non-competes.
- Business strategies: Med spas should focus on protecting intellectual property through NDAs while improving wages and workplace conditions to retain staff.
While federal changes are stalled, the landscape is shifting. Med spas must balance legal protections with competitive work environments to stay ahead.
1. Non-Compete Agreements
Enforceability
Non-compete agreements in med spas remain fully enforceable under state law, thanks to a pivotal August 2024 court decision. Patrick O'Brien, General Counsel for the American Med Spa Association, emphasized:
Existing non-competes will still be in effect, employers and employees can enter new non-competes, and non-competes can still be enforced under current state rules.
If the FTC rule had been implemented, most non-competes would have been rendered void, except for senior executives earning over $151,164 annually in policymaking roles. Meanwhile, some states, such as Colorado and Illinois, have already enacted their own restrictions on non-compete agreements, independent of federal regulations. This creates a patchwork of rules that med spas must navigate.
Scope of Protection
Non-compete agreements provide extensive safeguards for med spa businesses, though the specifics depend on state laws. These agreements generally restrict former employees from joining competitors or starting their own competing practices within a defined geographic area and timeframe. Interestingly, the FTC’s proposed rule included an exception: non-competes tied to a bona fide sale of a business or ownership interest would remain enforceable, even under stricter regulations.
Additionally, med spas often rely on concurrent non-competes, which prevent current employees from working for competitors while still employed. These agreements are still permitted and serve as a key layer of protection for businesses during active employment. Together, these tools help med spas safeguard their operations and intellectual property.
Impact on Med Spa Operations
The blocked FTC rule has preserved the existing framework for med spa staffing, but it has also highlighted vulnerabilities in the industry. Med spas now face intensified competition for talent due to increased worker mobility. In aesthetic medicine, where providers often build strong personal relationships with patients, losing an injector or esthetician can lead to patients following them to a competitor, directly affecting revenue.
The FTC had projected a 2.7% rise in new business formation, indicating that more former employees could launch their own competing practices. To prepare for potential regulatory changes, med spa owners should consider bolstering other legal protections, such as non-disclosure agreements and non-solicitation clauses. These tools can target both patients and referral sources and are still permissible under current laws and the proposed FTC framework. Strengthening these measures can help med spas navigate an increasingly competitive landscape.
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2. NDA and Trade Secret Protections
Enforceability
With non-compete agreements enforced at the state level, non-disclosure agreements (NDAs) offer a dependable way to safeguard sensitive information. NDAs are widely recognized as enforceable tools and are endorsed by the FTC as effective in protecting proprietary data. As long as NDAs are narrowly crafted and don’t function as disguised non-compete clauses, they typically face minimal regulatory pushback.
The FTC’s focus is on combating agreements that are overly broad or unreasonable. For example, in November 2025, the agency reached a settlement with Gateway Services, Inc., requiring the company to stop enforcing blanket non-competes for nearly 1,800 employees. Importantly, the 10-year consent order explicitly excluded agreements aimed solely at protecting confidential business information and trade secrets. This demonstrates that carefully designed NDAs remain a secure option for med spas.
Scope of Protection
NDAs are essential for protecting critical med spa assets like client data, treatment protocols, and business strategies. To ensure this protection holds up legally, med spas must demonstrate they’ve taken "reasonable efforts" to keep information confidential. This includes using tools like password protection, encryption, and limiting access to only those employees who truly need it.
Med spas can also enforce post-employment restrictions to prevent former employees from disclosing trade secrets or soliciting clients and referral sources. Research shows that over 95% of employees bound by non-compete agreements already have NDAs in place, making the shift to NDAs relatively seamless for many practices.
These protections are critical to helping med spas manage risks and stay competitive in a challenging market.
Impact on Med Spa Operations
As med spas adapt to changes in non-compete enforcement, NDAs encourage a shift toward building stronger internal processes and competing on merit. Moving away from non-competes pushes med spas to focus on operational improvements rather than relying solely on legal restrictions. FTC Chair Lina M. Khan highlighted this dynamic, stating:
Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism
This shift means med spas must prioritize better wages, benefits, and workplace conditions to retain skilled professionals like aesthetic injectors and estheticians.
To reduce the risk of trade secret disputes, med spas should require new hires to confirm in writing that they won’t disclose or use proprietary information from previous employers. It’s also crucial to regularly update employee handbooks to clearly define trade secrets and outline steps for protecting sensitive information. These proactive measures help med spas maintain their edge while navigating the evolving regulatory landscape.
Pros and Cons
Non-Compete Agreements vs NDAs for Med Spas: Key Differences
When deciding how to protect their business and retain staff, med spa owners must carefully consider the trade-offs between non-compete agreements and NDAs. Each approach has its own set of strengths and weaknesses, especially in the context of med spa operations.
Non-compete agreements are designed to stop employees from joining competitors or launching rival businesses. This can create a more stable workforce by legally restricting movement. However, these agreements come with notable downsides. Studies show they can lower employee wages, hinder innovation, and discourage new business creation. For example, the FTC estimates that eliminating non-competes could boost average worker earnings by $524 annually. Additionally, non-competes face growing legal challenges, with some states banning or heavily restricting their use, making them a risky choice for long-term staffing strategies.
On the other hand, NDAs and trade secret protections focus on safeguarding proprietary information like digital client lists or treatment protocols. These agreements do not prevent employees from seeking new jobs, making them a more flexible and enforceable option, even in states where non-competes are no longer valid . That said, enforcing NDAs can be more complex, as it requires proof that specific information was misused rather than simply showing an employee joined a competitor.
Here’s a side-by-side look at how these agreements compare:
| Feature | Non-Compete Agreements | NDAs & Trade Secret Protections |
|---|---|---|
| Primary Goal | Restrict employees from working with competitors | Protect proprietary business information |
| Worker Mobility | Highly restrictive; may force career or location changes | Allows employees to change jobs freely |
| Enforceability | Facing bans and restrictions in many states | Generally enforceable across the U.S. |
| Burden of Proof | Must prove employee is working in a restricted role | Must prove misuse or disclosure of protected information |
| Impact on Wages | Limits job-switching, often suppressing wages | Minimal impact on overall wages |
| Med Spa Context | Stops staff, like injectors, from taking clients to another spa | Prevents sharing of patient lists or proprietary treatment methods |
This comparison highlights a trend toward more precise protections, moving away from broad employment restrictions. As legal and regulatory pressures shift, med spas are encouraged to focus on improving wages, benefits, and workplace conditions to retain top talent. While NDAs require careful documentation and evidence to enforce, they offer a solid legal framework that protects your business without the risks tied to non-competes.
Conclusion
The shifting legal landscape around non-compete agreements and NDAs is forcing med spas to rethink their strategies. While the FTC's proposed non-compete ban remains blocked federally as of April 2026, the tide is clearly turning. In 2025 alone, thirteen states introduced stricter non-compete regulations. Whether you're operating in California, where non-competes are already banned, or in a state with evolving wage thresholds, it's clear that broad employment restrictions are becoming a relic of the past.
Moving forward, med spas need a two-pronged strategy: solid legal protections and a workplace culture that inspires loyalty. Use legal safeguards to protect sensitive business assets like patient lists and treatment methods while respecting employee mobility. These measures should go hand-in-hand with creating a workplace that people don’t want to leave. After all, the best way to retain staff isn’t through restrictive contracts - it’s by fostering an environment they’re excited to be part of.
FTC Chair Lina M. Khan put it well:
Instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker's labor services by improving wages and working conditions.
This means offering competitive pay, opportunities for professional growth, and tools that make day-to-day operations smoother. For instance, platforms like Prospyr can help med spas streamline scheduling, track performance metrics transparently, and cut down on administrative headaches - all of which contribute to happier employees and lower turnover rates.
Don’t forget to consult legal experts to ensure your employment agreements comply with state laws. Replace outdated non-competes with narrowly focused provisions that protect your business without alienating your workforce. The med spas that succeed in this evolving environment will be those that balance legal compliance with a commitment to employee satisfaction. Adapting now isn’t just about staying compliant - it’s about staying competitive.
FAQs
Which state law controls my med spa’s non-compete?
The Federal Trade Commission (FTC) has introduced a nationwide ban on non-compete agreements, effectively overriding state-specific laws. Beginning September 4, 2024, any existing non-compete agreements will no longer be enforceable, regardless of the regulations previously upheld by individual states. This federal rule creates a consistent standard across the entire United States.
When does an NDA become an illegal “hidden” non-compete?
An NDA crosses into illegal territory as a "hidden" non-compete if it prevents a worker from pursuing or accepting employment elsewhere or launching their own business after leaving their current job. In such cases, the NDA essentially operates as a non-compete, which violates the FTC's final rule prohibiting non-compete agreements.
How can I stop patients from following a departing injector?
When an injector leaves your practice, it's important to address the situation with transparency and care. Open communication is key - let patients know about the change and reaffirm your dedication to their well-being. This helps reassure them that their care remains a priority.
To maintain trust, consider offering personalized consultations or follow-ups. This not only strengthens relationships but also gives patients confidence in your practice's ability to meet their needs. Leveraging digital communication tools can also be effective. Use these platforms to send updates, appointment reminders, and any relevant information to keep patients engaged.
Lastly, focus on delivering outstanding care and maintaining consistent branding. These efforts help build loyalty and ensure patients feel connected to your practice, even during staff transitions. By prioritizing these strategies, you can retain patients and keep your practice thriving.
