Biden directed the Federal Trade Commission to ban or limit noncompete agreements in 2021 as part of a wider effort to improve competitiveness for workers. The FTC proposed the rule last month widely banning the agreements for all industries and is taking feedback from the public until March 20 before making a final determination.
“By preventing workers across the labor force from pursuing better opportunities that offer higher pay or better working conditions, and by preventing employers from hiring qualified workers bound by these contracts, noncompetes hurt workers and harm competition,” the FTC said in announcing the proposed rule.
In dozens of letters to the agency over the past month, doctors described how they have been affected by noncompete agreements, including being forced to move themselves and their families to other regions just to find work after leaving a job, and urged the FTC to ban them.
Eliminating the agreements could have a significant impact on workers‘ ability to negotiate wages and change jobs, said Mainzer with the American Nurses Association.
“If you’re stuck with an employer, it can suppress wages. It’s not truly a free market,” said Mainzer. “If you can advertise yourself openly you can try to find the highest bidder wherever you’re most qualified and right now they can’t do that.”
The move by the FTC is expected to draw opposition from companies in a range of sectors. The American Hospital Association along with 100 other industry groups is asking the FTC for more time to formulate a response to its plan given the economic and legal implications it could have.
Hospitals argue that the FTC proposal is too wide-ranging and would prevent exceptions where they might be merited, such as when a hospital spends a significant amount of money recruiting and relocating a physician and helping them to build up their patient base, a hospital industry representative said. In addition, nonprofit hospitals, which make up more than half of hospitals, would not be covered by the FTC rule, which could give them an unfair advantage, the representative said.
“The proposed regulation errs by seeking to create a one-size-fits-all rule for all employees across all industries, without having studied the unique effects that this rule will have on the health care field, and hospitals and health systems in particular, especially as they continue to deal with serious workforce shortages that can threaten patient access to care,” said Chad Golder, deputy general counsel for the American Hospital Association.
The American Medical Association, the largest group representing physicians, said its ethics policy opposes “unreasonable noncompete” agreements, but it opposes the blanket nature of the FTC rule.
“Many states have enacted negotiated health care-specific noncompete statutes that take into account their unique health care markets and that balance the competing stakeholder interests,” the AMA said in a statement. “The balanced approach of these states must be considered against a proposed universal federal ban on all noncompete agreements.”
Susan Kressly, a pediatrician who spent much of her career working in the Philadelphia area, said she has been on both sides of the issue — having been bound by a noncompete agreement when working for a group practice and later requiring doctors to sign them when she started her own. She agreed that noncompetes can help medical practices protect the investment they put into doctors and nurses.
But she said the agreements have gotten too broad in many instances, with some large hospitals not only prohibiting doctors from working near their old employer but any facilities that the hospital owns, forcing doctors to move out of state or stop practicing medicine for more than a year.
“It seems logical that you need some way to protect that investment so people aren’t just going to set up next door and compete against you after you just gave them an opportunity,” said Kressly. “Noncompetes protect people who are willing to invest in growing their business. But it’s gotten out of hand with all the consolidation and become unreasonable.”
Source: | This article originally belongs to Nbcnews.com
