Nebraska Outlaws Noncompete Clauses for Healthcare Staffing Agencies

Nebraska passed a law prohibiting noncompete agreements in healthcare staffing agency contracts.

Nebraska has enacted the Health Care Staffing Agency Registration Act as part of Legislative Bill 921, creating new rules for healthcare staffing agencies operating in the state.

• The Act bans staffing agencies from using noncompete agreements—contract clauses that prevent workers from joining a competitor or working for a client after leaving the agency—in contracts with healthcare workers or healthcare entities (PDF).
• It also blocks agencies from requiring healthcare workers to pay liquidated damages (preset financial penalties) or employment fees if they become permanent employees at a healthcare facility—except in limited, defined situations.
• To operate legally, agencies must register with the Nebraska Department of Labor every year and pay a $1,500 fee per location, or $1,500 total if based outside the state and recruiting locally (Husch Blackwell analysis).
• The law is scheduled to start July 1, 2027.

This action comes amid a national trend to curb restrictive labor contracts in healthcare. The Federal Trade Commission (FTC) has warned staffing groups about possible enforcement for illegal noncompetes. “Enforcement against unreasonable noncompete agreements remains a top priority for the Federal Trade Commission,” said Kelse Moen, Deputy Director of the FTC Bureau of Competition.

Recent cases in other states highlight risks when agencies use restrictive clauses. The American Medical Association has also called for reforms, citing impacts on physician mobility (AMA).

Healthcare legal teams and agency compliance officers must review contracts and update processes ahead of the new requirements.

Yes, but: Nebraska’s law includes limited exceptions and gives staffing agencies three years to adapt.

What's next: Agencies must develop compliance strategies and update contract templates before July 1, 2027.