7 Ways The “One Big Beautiful Bill Act” Impacts Dental Practices and Owners
Jordan Uditsky • August 20, 2025
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. One may question whether this sprawling piece of legislation deserves to be called “beautiful,” but it undoubtedly earns the “big” in its name, especially for small businesses like dental practices. That is because it contains several provisions that could have a significant impact on the tax obligations of practices and their owners. Most notably, the OBBBA solidifies significant tax reforms and exemptions that were part of the 2017 Tax Cuts and Jobs Act (TCJA).
Here are seven aspects of the OBBBA that are of particular interest to dental practices and their owners.
1. Permanent Qualified Business Income (QBI) Deduction
The 20 percent small business tax deduction (also known as the section 199a deduction) for sole proprietorships, partnerships, S-corporations, and LLCs, which was scheduled to expire at the end of 2025, is made permanent and extends the amount of income subject to the phase-out rules. Specifically, the income threshold for single taxpayers is expanded by $25,000 and for joint filers by $50,000. The bill also includes a new minimum deduction of $400 for taxpayers with at least $1,000 of qualified business income from one or more actively conducted trades or businesses in which they materially participate.
2. Expanding Section 179 Expensing
The bill increases the Small Business Expensing Cap from $1.22 million to $2.5 million. It also brings back and makes permanent “bonus depreciation,” which allows for an immediate write-off of 100 percent (versus 40 percent) of the cost of new qualified property acquired after January 19, 2025, such as equipment, vehicles, and software.
3. Qualified Small Business Stock
The OBBBA modifies the Qualified Small Business Stock (QSBS) provisions contained in Section 1202 of the Internal Revenue Code by increasing the amounts that can be excluded from gross income, raising the size limit for QSBS investments, and shortening the holding period so investors can take advantage of the provision's benefits earlier than before.
Specifically:
- For QSBS issued after OBBBA's July 4, 2025, effective date, the per-taxpayer gain exclusion cap for the sale of QSBS is raised from $10 million to $15 million, with that threshold being adjusted for inflation starting in 2027. The exclusion amount will now be $15 million or 10x the basis in the stock, whichever is greater.
- The aggregate gross assets a C corporation may have for its stock to qualify as a qualified small business is now $75 million – up from $50 million - for stock issued after July 4, 2025, with the new limit to be adjusted for inflation beginning in 2027.
- For QSBS acquired after July 4, 2025, the holding period required to qualify for the QSBS gain exclusion drops from five years to three years. After three years, a 50% exclusion is available, increasing to 75% after four years, and reaching 100% exclusion after five years.
4. Enhancing the Employer-provided Childcare Credit
Section 45F of the tax code, which is designed to incentivize businesses to invest in childcare, now provides qualifying small businesses (gross receipts of $25 million or less for the preceding five years) with a maximum tax credit of up to $600,000 per year on up to 50 percent of qualified childcare expenses provided to employees. This credit is effective beginning in 2026.
5. Employer-provided Student Loan Repayment Assistance
The OBBBA makes the employer-provided student loan repayment benefit permanent, allowing employers to contribute up to $5,250 per year towards employees' student loans, tax-free for both the employer and employee. This annual limit will be adjusted for inflation starting in 2026, ensuring the benefit keeps pace with rising education costs.
6. Permanent, Inflation-Indexed Estate & Gift Tax Exemption
The OBBBA permanently increases the unified federal estate and lifetime gift tax exemption to $15 million per individual ($30 million for married couples), indexed for inflation starting in 2026. If the TCJA’s exemption provisions had expired, the threshold would have dropped to approximately $7 million per individual. This stability allows ultra-high-net-worth individuals to accelerate lifetime gifting and fund trusts efficiently. Techniques such as SLATs (Spousal Lifetime Access Trusts) are now more powerful planning tools given the increased exemption scope.
The generation-skipping transfer (GST) tax exemption is now also aligned with the $15 million per individual exemption, also indexed for inflation.
7. SALT Deduction Raised – For Some
The law increased the state and local tax (SALT) deduction cap from $10,000 to $40,000; however, this cap is not universally available. If your modified adjusted gross income (MAGI) exceeds certain thresholds, the $40,000 cap will be phased out.
- For single filers, the phase-out starts at $250,000 MAGI.
- For joint filers, the phase-out starts at $500,000 MAGI.
- The deduction is reduced by 30% of the amount exceeding these thresholds until it reaches the original $10,000 cap for the highest earners.
- The income thresholds for the phase-out will increase by 1% annually from 2026 to 2029.
If you have questions about the OBBBA and what it means for you and your practice, please contact Grogan Hesse & Uditsky today at (630) 833-5533 or contact us online to arrange for your free initial consultation.
We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you.
Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Speak to an Attorney
Related Posts
Whatever shortcomings and deficiencies there may be in the dynamic between dental practices and insurance companies, their distinct roles in patient care are not among them. While dentists certainly want to maximize reimbursements for the services they provide, they are not beholden to insurers and remain in a position to advocate for their patients and challenge an insurer’s cost-related decisions without fear of retribution. But a recent unprecedented move by Delta Dental in Wisconsin threatens to upend this relationship model and has raised serious concerns among industry groups, patient advocates, and regulators about conflicts of interest, competition, and provider independence. Over the summer, Delta Dental announced that it had acquired Cherry Tree Dental, which owns and operates 31 clinics, 25 of which are in Wisconsin. The American Dental Association (ADA) is among several organizations that have vocally opposed the transaction. As the ADA wrote shortly after the deal was announced: When an insurance company becomes both health care provider and insurance payer, questions arise regarding potential conflict of interest. From a business standpoint, dental insurance companies seek to minimize cost and maximize profit. As a result, patients may find their treatment options limited to what is most cost-effective for the insurer, not necessarily what is most effective for their oral health. The ADA believes that the health interests of patients are best protected when dental practices and other private facilities for the delivery of dental care are owned and controlled by a dentist licensed in the jurisdiction where the practice is located. In November, the ADA filed a letter with the Wisconsin Office of the Commissioner of Insurance expanding on its concerns and opposition, including worries about provider independence in making care decisions: Direct ownership by Delta Dental could compromise dentists’ ability to advocate for patients. In traditional arrangements, dentists can appeal plan decisions regarding patient care or choose to leave a network if plan policies are overly restrictive. However, the ADA warned that when dentists are employed by the payer, challenging cost-related decisions could label them as “problem employees,” potentially discouraging proper patient care. The potentially anti-competitive effects of such arrangements were also raised by the ADA, which noted that “Delta Dental’s acquisition could influence agreements, business practices, and fee schedules between Cherry Tree and other payers, potentially creating unfair competition.” In addition to the ADA, the acquisition has drawn concerns from the Wisconsin Dental Association, the American Economic Liberties Project, and the Alliance of Independent Dentists. The fallout of this acquisition, if consummated, could ripple through other markets, potentially leading to a seismic shift in the provider-insurer landscape. We will continue to monitor developments and provide updates as warranted. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
For many associate dentists, the sound of opportunity knocking comes in the form of an offer to become a co-owner of the practice where they work. Rare is the dentist who would reject out of hand the chance to reap the rewards of years of hard work and move from employee to owner. For the practice owner who opens the equity door for their associate, such a “buy-in” can infuse cash and value into the business, laying the foundation for a seamless ownership transition upon their retirement. The key to a successful buy-in is a clear and equitably structured deal that is workable for both parties in terms of how the associate will pay for their equity interest. However, there is no one-size-fits-all approach. The structure of a dental associate buy-in can vary significantly depending on factors such as the associate’s financial capacity, the practice’s value, and the owner’s long-term objectives. Whether you are the associate or the practice owner in such an anticipated transaction, you should consult with an experienced dental practice attorney to understand your options and determine which structure provides you with the most value. Your discussions with your attorney will likely include some or all of these common dental associate buy-in arrangements: Cash Purchase A cash purchase is the most straightforward buy-in model. With either cash on hand or through financing (the more likely scenario), the associate purchases an agreed-upon percentage of the practice (for example, 25% or 50%) for a lump sum based on the appraised value of the practice. That appraisal will likely use metrics such as collections, earnings before interest and taxes (EBIT), or a percentage of annual gross revenue. The main advantage of a cash purchase is its simplicity and immediacy. The associate becomes an owner right away, while the practice owner receives a clean and full payout for the equity sold. However, obtaining the needed financing may be easier said than done for an associate dentist, and a large cash payout may also come with unwanted tax ramifications for the owner. Buy-in documents for a cash purchase should address governance rights, profit distribution, and exit mechanisms. They should also define what happens if an associate departs, how future buyouts are valued, and whether non-compete or non-solicitation covenants apply. Installment Sale An installment sale allows the associate to purchase equity over time, making periodic payments instead of an upfront lump-sum payment. After the practice value is determined, the associate agrees to buy a certain percentage of ownership through regular payments (e.g., monthly or quarterly) over several years. Payments may include interest, and ownership may be transferred incrementally or upon full payment. This is a good option for associates who do not have the means for a full cash buy-in immediately. For owners, this arrangement provides a steady income stream – so long as the associate does not leave before completing payments. That is why the documentation should clearly outline the timing of ownership right transfers and provide robust default remedies, such as forfeiture of prior payments or reversion of ownership interests. Sweat Equity In a sweat equity buy-in, the associate essentially cashes in their years of service, earning ownership over time based on their contribution to the practice’s growth or profitability rather than through an immediate cash investment. In a typical sweat equity arrangement, the associate receives equity credits or options tied to measurable performance benchmarks, such as production levels, collections, or tenure. Once those targets are met, a portion of ownership is granted or sold at a reduced price. This structure enables talented but liquidity-challenged associates to become owners without initial financial strain. It also incentivizes them to grow the practice and stay long-term. Shadow Account (a/k/a Phantom Equity) As I discussed in detail in this post , a shadow account (also known as a phantom equity plan) is an increasingly popular buy-in model, especially when the owner is not yet ready to transfer real equity but wants to reward the associate as if they were an owner. In this model, the associate receives the right to cash payments equal to the value of the shares at a specified later date or distribution event. That value can be established through an appraisal or an agreed-upon formula. The selected events that give an associate a right to a payout can include such things as achieving performance goals, termination, or retirement. There are two types of shadow account/phantom stock plans. In an "appreciation only” plan, the cash payout upon vesting does not include the value of the underlying shares, only the increase in value of that stock since it was granted. In a “full value” plan, the practice pays both the underlying value of the stock and the amount the stock has appreciated while held by the associate. Like actual stock, phantom stock has a defined value and tracks the practice’s performance, but an associate holding phantom stock typically does not have either minority shareholder rights or voting rights in the practice. This makes phantom stock plans attractive for owners who want to provide associates with a sense of equity ownership without giving up any actual control. The practice has broad discretion and flexibility in designing the plan, including valuation formulas and vesting conditions, and the administrative burdens are less than for traditional stock option plans. As noted, the “best” buy-in structure depends on the unique goals of both parties. No matter which model is ultimately adopted, well-crafted documentation, preceded by careful consideration and consultation with counsel, is essential. That is because these deals do more than just transfer ownership - they can lay the foundation for a stable, profitable partnership that preserves the practice’s legacy and rewards everyone’s investment, financial or otherwise. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
For years, state courts and legislatures have taken a skeptical eye toward non-competition agreements. Judges here in Illinois and elsewhere routinely struck down overly broad and overreaching provisions, while an increasing number of jurisdictions have passed legislation or ordinances banning non-competes outright or limiting their scope and enforceability. During the Biden administration, the federal government injected itself into the heretofore state and local assault on non-competes. Both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) took the position, in a Final Rule and counsel's opinion, respectively, that almost all existing and future non-competes were void and unenforceable. Those actions were immediately challenged in court, and litigation about the FTC's ban resulted in dueling district court rulings, with injunctions issued against its enforcement in some cases, while other judges found the FTC had properly issued the Final Rule. The FTC subsequently appealed federal court rulings in Texas and Florida that invalidated or enjoined, respectively, the FTC's non-compete ban. Then came Election Day 2024. Nationwide Ban Abandoned, but Challenges to Non-Competes Remain Unsurprisingly, for an administration with a penchant for being business-friendly and regulation-averse, the newly comprised FTC quickly changed its tune on a nationwide non-compete ban. A series of moves this year has made it clear that the federal government, at least for the next three years, is abandoning any such blanket efforts. Specifically, the FTC moved in September to dismiss its appeals of two district court decisions that had struck down the Final Rule. Simultaneously, the commission took steps towards acceding to the vacatur of the non-compete ban . At the same time, however, the FTC has also indicated, through recent enforcement actions and warning letters , that it will continue to pursue remedies against employers on a case-by-case basis for the unlawful use of post-employment non-competes under Section 5 of the FTC Act, which prohibits "unfair methods of competition." Those FTC efforts, which are nothing new, mean the battle over the validity of non-compete agreements will continue to be fought largely at the state and local levels. Once again, dental practice owners and other employers will need to tailor their non-competition agreements to comply with the patchwork of jurisprudence, laws, and regulations of the states and localities where they have employees while remaining mindful of anti-competitive overreach that could attract the FTC's attention. With the nationwide non-compete ban dead and buried, but restrictions on and litigation about the enforceability of such agreements very much alive, now is an opportune time for practice owners to consult with experienced employment counsel who can review and revise any existing or contemplated non-competition provision as necessary. If you have questions about your company’s non-competes or would like assistance reviewing or drafting such agreements, please call Grogan Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Whatever shortcomings and deficiencies there may be in the dynamic between dental practices and insurance companies, their distinct roles in patient care are not among them. While dentists certainly want to maximize reimbursements for the services they provide, they are not beholden to insurers and remain in a position to advocate for their patients and challenge an insurer’s cost-related decisions without fear of retribution. But a recent unprecedented move by Delta Dental in Wisconsin threatens to upend this relationship model and has raised serious concerns among industry groups, patient advocates, and regulators about conflicts of interest, competition, and provider independence. Over the summer, Delta Dental announced that it had acquired Cherry Tree Dental, which owns and operates 31 clinics, 25 of which are in Wisconsin. The American Dental Association (ADA) is among several organizations that have vocally opposed the transaction. As the ADA wrote shortly after the deal was announced: When an insurance company becomes both health care provider and insurance payer, questions arise regarding potential conflict of interest. From a business standpoint, dental insurance companies seek to minimize cost and maximize profit. As a result, patients may find their treatment options limited to what is most cost-effective for the insurer, not necessarily what is most effective for their oral health. The ADA believes that the health interests of patients are best protected when dental practices and other private facilities for the delivery of dental care are owned and controlled by a dentist licensed in the jurisdiction where the practice is located. In November, the ADA filed a letter with the Wisconsin Office of the Commissioner of Insurance expanding on its concerns and opposition, including worries about provider independence in making care decisions: Direct ownership by Delta Dental could compromise dentists’ ability to advocate for patients. In traditional arrangements, dentists can appeal plan decisions regarding patient care or choose to leave a network if plan policies are overly restrictive. However, the ADA warned that when dentists are employed by the payer, challenging cost-related decisions could label them as “problem employees,” potentially discouraging proper patient care. The potentially anti-competitive effects of such arrangements were also raised by the ADA, which noted that “Delta Dental’s acquisition could influence agreements, business practices, and fee schedules between Cherry Tree and other payers, potentially creating unfair competition.” In addition to the ADA, the acquisition has drawn concerns from the Wisconsin Dental Association, the American Economic Liberties Project, and the Alliance of Independent Dentists. The fallout of this acquisition, if consummated, could ripple through other markets, potentially leading to a seismic shift in the provider-insurer landscape. We will continue to monitor developments and provide updates as warranted. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
For many associate dentists, the sound of opportunity knocking comes in the form of an offer to become a co-owner of the practice where they work. Rare is the dentist who would reject out of hand the chance to reap the rewards of years of hard work and move from employee to owner. For the practice owner who opens the equity door for their associate, such a “buy-in” can infuse cash and value into the business, laying the foundation for a seamless ownership transition upon their retirement. The key to a successful buy-in is a clear and equitably structured deal that is workable for both parties in terms of how the associate will pay for their equity interest. However, there is no one-size-fits-all approach. The structure of a dental associate buy-in can vary significantly depending on factors such as the associate’s financial capacity, the practice’s value, and the owner’s long-term objectives. Whether you are the associate or the practice owner in such an anticipated transaction, you should consult with an experienced dental practice attorney to understand your options and determine which structure provides you with the most value. Your discussions with your attorney will likely include some or all of these common dental associate buy-in arrangements: Cash Purchase A cash purchase is the most straightforward buy-in model. With either cash on hand or through financing (the more likely scenario), the associate purchases an agreed-upon percentage of the practice (for example, 25% or 50%) for a lump sum based on the appraised value of the practice. That appraisal will likely use metrics such as collections, earnings before interest and taxes (EBIT), or a percentage of annual gross revenue. The main advantage of a cash purchase is its simplicity and immediacy. The associate becomes an owner right away, while the practice owner receives a clean and full payout for the equity sold. However, obtaining the needed financing may be easier said than done for an associate dentist, and a large cash payout may also come with unwanted tax ramifications for the owner. Buy-in documents for a cash purchase should address governance rights, profit distribution, and exit mechanisms. They should also define what happens if an associate departs, how future buyouts are valued, and whether non-compete or non-solicitation covenants apply. Installment Sale An installment sale allows the associate to purchase equity over time, making periodic payments instead of an upfront lump-sum payment. After the practice value is determined, the associate agrees to buy a certain percentage of ownership through regular payments (e.g., monthly or quarterly) over several years. Payments may include interest, and ownership may be transferred incrementally or upon full payment. This is a good option for associates who do not have the means for a full cash buy-in immediately. For owners, this arrangement provides a steady income stream – so long as the associate does not leave before completing payments. That is why the documentation should clearly outline the timing of ownership right transfers and provide robust default remedies, such as forfeiture of prior payments or reversion of ownership interests. Sweat Equity In a sweat equity buy-in, the associate essentially cashes in their years of service, earning ownership over time based on their contribution to the practice’s growth or profitability rather than through an immediate cash investment. In a typical sweat equity arrangement, the associate receives equity credits or options tied to measurable performance benchmarks, such as production levels, collections, or tenure. Once those targets are met, a portion of ownership is granted or sold at a reduced price. This structure enables talented but liquidity-challenged associates to become owners without initial financial strain. It also incentivizes them to grow the practice and stay long-term. Shadow Account (a/k/a Phantom Equity) As I discussed in detail in this post , a shadow account (also known as a phantom equity plan) is an increasingly popular buy-in model, especially when the owner is not yet ready to transfer real equity but wants to reward the associate as if they were an owner. In this model, the associate receives the right to cash payments equal to the value of the shares at a specified later date or distribution event. That value can be established through an appraisal or an agreed-upon formula. The selected events that give an associate a right to a payout can include such things as achieving performance goals, termination, or retirement. There are two types of shadow account/phantom stock plans. In an "appreciation only” plan, the cash payout upon vesting does not include the value of the underlying shares, only the increase in value of that stock since it was granted. In a “full value” plan, the practice pays both the underlying value of the stock and the amount the stock has appreciated while held by the associate. Like actual stock, phantom stock has a defined value and tracks the practice’s performance, but an associate holding phantom stock typically does not have either minority shareholder rights or voting rights in the practice. This makes phantom stock plans attractive for owners who want to provide associates with a sense of equity ownership without giving up any actual control. The practice has broad discretion and flexibility in designing the plan, including valuation formulas and vesting conditions, and the administrative burdens are less than for traditional stock option plans. As noted, the “best” buy-in structure depends on the unique goals of both parties. No matter which model is ultimately adopted, well-crafted documentation, preceded by careful consideration and consultation with counsel, is essential. That is because these deals do more than just transfer ownership - they can lay the foundation for a stable, profitable partnership that preserves the practice’s legacy and rewards everyone’s investment, financial or otherwise. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
For years, state courts and legislatures have taken a skeptical eye toward non-competition agreements. Judges here in Illinois and elsewhere routinely struck down overly broad and overreaching provisions, while an increasing number of jurisdictions have passed legislation or ordinances banning non-competes outright or limiting their scope and enforceability. During the Biden administration, the federal government injected itself into the heretofore state and local assault on non-competes. Both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) took the position, in a Final Rule and counsel's opinion, respectively, that almost all existing and future non-competes were void and unenforceable. Those actions were immediately challenged in court, and litigation about the FTC's ban resulted in dueling district court rulings, with injunctions issued against its enforcement in some cases, while other judges found the FTC had properly issued the Final Rule. The FTC subsequently appealed federal court rulings in Texas and Florida that invalidated or enjoined, respectively, the FTC's non-compete ban. Then came Election Day 2024. Nationwide Ban Abandoned, but Challenges to Non-Competes Remain Unsurprisingly, for an administration with a penchant for being business-friendly and regulation-averse, the newly comprised FTC quickly changed its tune on a nationwide non-compete ban. A series of moves this year has made it clear that the federal government, at least for the next three years, is abandoning any such blanket efforts. Specifically, the FTC moved in September to dismiss its appeals of two district court decisions that had struck down the Final Rule. Simultaneously, the commission took steps towards acceding to the vacatur of the non-compete ban . At the same time, however, the FTC has also indicated, through recent enforcement actions and warning letters , that it will continue to pursue remedies against employers on a case-by-case basis for the unlawful use of post-employment non-competes under Section 5 of the FTC Act, which prohibits "unfair methods of competition." Those FTC efforts, which are nothing new, mean the battle over the validity of non-compete agreements will continue to be fought largely at the state and local levels. Once again, dental practice owners and other employers will need to tailor their non-competition agreements to comply with the patchwork of jurisprudence, laws, and regulations of the states and localities where they have employees while remaining mindful of anti-competitive overreach that could attract the FTC's attention. With the nationwide non-compete ban dead and buried, but restrictions on and litigation about the enforceability of such agreements very much alive, now is an opportune time for practice owners to consult with experienced employment counsel who can review and revise any existing or contemplated non-competition provision as necessary. If you have questions about your company’s non-competes or would like assistance reviewing or drafting such agreements, please call Grogan Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
