FTC: "End Non Compete" Profound Effects on Physicians and Healthcare
January 19th, the FTC published a proposed rule that would ban non-compete (NC) clauses in the United States (see below). If adopted, this rule could be one of the most significant changes in physician employment in all of our lifetimes.
74% of physicians are now employed. Many of their employment contracts have NC clauses that are central to their employment. If the FTC rule is implemented, it could have profound effects on many physicians’ careers, whether they are employed in academic, hospital/health systems, or venture capital settings.
Public comment on the proposed rule will be accepted until March 20, 2023. It is important that physicians be made aware of this proposal, and share their views.
The DuPage County Medical Society (DCMS), with collaboration from the American Medical Association (AMA) and the Illinois State Medical Society (ISMS), is hosting a virtual informational meeting to explain the proposed FTC rule and encourage physicians to share their thoughts during the public comment period. The session will be on Wednesday, February 15, at 6:30p.m. I encourage you to join us. And those of you who are in leadership positions, I urge you to make others aware of the proposed rule and the opportunity to share comments. Link for our meeting is below.:
Even if you are not involved with NC, this affects the majority of our colleagues, and the right path could make a profound difference for all physicians (especially for our younger and future colleagues), medicine, patients and healthcare in this country.
Rockford G. Yapp, MD, MPH, AGAF
Board Chair, DuPage County Medical Society
Full 60+ page document details the Commission’s rationale for ending NCs:
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FTC Proposal: Key excerpts:
SUMMARY: Pursuant to Sections 5 and 6(g) of the Federal Trade Commission Act, the Federal Trade Commission (‘‘Commission’’) is proposing the Non- Compete Clause Rule. The proposed rule would, among other things, provide that it is an unfair method of competition for an employer to enter into or attempt to enter into a non- compete clause with a worker; to maintain with a worker a non-compete clause; or, under certain circumstances, to represent to a worker that the worker is subject to a non-compete clause.
".... This research has shown the use of non-compete clauses by employers has negatively affected competition in labor markets, resulting in reduced wages for workers across the labor force – including workers not bound by non-compete clauses. This research has also shown that, by suppressing labor mobility, non- compete clauses have negatively affected competition in product and service markets in several ways.
....In this rulemaking, the Commission seeks to ensure competition policy is aligned with the current economic evidence about the consequences of non-compete clauses. In the Commission’s view, the existing legal frameworks governing non-compete clauses – formed decades ago, without the benefit of this evidence – allow serious anticompetitive harm to labor, product, and service markets to go unchecked."
The FTC proposal and public comment section:
To go directly to comment page and share your thoughts on the proposed rule:
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