Proposed Rule Might Do Away With Physician Non-Competes

by Gregory J. Pepe

On January 5, 2023, the Federal Trade Commission released a Notice of Proposed Rulemaking (NPRM) to prohibit employers from imposing non-compete clauses on workers. True to their name, non-competes block people from working for a competing employer, or starting a competing business, after their employment ends. Evidence shows that noncompete clauses bind about one in five American workers, approximately 30 million people. 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, non-competes hurt workers and harm competition.

As many healthcare providers are aware, more and more provider employment contracts include non-compete provisions which restrict the employment opportunities for providers after they leave their employment. The proposed FTC rule focuses on the economic harm these non-competes impose on the national economy. One aspect of these practices that is not discussed is the adverse effect on patients, who might be prevented from treating with their provider of choice. Some doctors have long-standing relationships with their patients, spanning many years. Noncompete provisions disregard those relationships and force a patient into a relationship with a new provider who they likely do not know and may not wish to treat with.

During the comment period established by the FTC, healthcare lawyers across the country will be submitting commentary on the adverse effect non-competes have on the physician-patient relationship. If you have an experience in which your relationship with your doctor or your patient has been interrupted because of a noncompete, please share it with NPM (www.npmlaw.com).

Gregory J. Pepe

Gregory J. Pepe, founding principal, practices in the areas of commercial finance, healthcare law, alternative dispute resolution and mediation, and general business law. Attorney Pepe represents numerous physician groups, including large integrated practices, IPAs, and PHOs. He has been an advisor to many state medical societies, including the Connecticut State Medical Society regarding physician practice management issues within the context of organized medicine, and regarding initiation of litigation by medical societies against managed care companies.