Non-compete

[Turducken21]

Curious what everyone’s thoughts are regarding the FTC ruling banning non-competes in for-profit organizations. Looks like non-profits are exempt.

https://www.npr.org/2024/04/23/1246655366/ftc-bans-noncompete-agreements-lina-khan

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[Stagg737]

Also curious about this or even the extent of its enforceability at this point from those who are more familiar with the ruling.

 

[claypigeon]

Where does it say non profits are exempt? Pages 51-54 explicitly state this applies to companies organized as non profits where “the corporation or its members derive a profit”.

https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf

 

[psych_0]

I have seen fierce opinions on both sides regarding whether or not this applies to not-for-profit hospitals, which many of us work in. Both sides seem very confident they are right and provide "sources" to back their claims that seem equally valid.

Would be an absolute game changer in terms of negotiating if the non-compete is lifted. Where I work now, the hospital has no incentive to give me a raise because they know I can't work anywhere close to where I live for 2 years so they're essentially like "What are you going to do? Leave? And go where? Lol"

Feels bad but it just sort of it what it is.....until maybe this rule dissolves the non-compete??

 

[nexus73]

Assuming "non-profit" hospitals won't pass the non-profit tests of the FTC rule, I'm all for it.

I can't imagine any physician would support continuing the ability for a corporation to tell you who you can or can't work for once you stop working for them. Especially with the way it's included as required boilerplate language in these contracts, and non-negotiable. Now if they want to agree to a golden severance or something if I leave like the CEO, then we can discuss non competes. I may be willing to not work across town for two years if I'm getting paid two year's salary and continued benefits after I leave.

 

[Turducken21]

Where does it say non profits are exempt? Pages 51-54 explicitly state this applies to companies organized as non profits where “the corporation or its members derive a profit”.

https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf

Not gonna lie, I have not read the ruling. It’s just something that I’ve seen in various articles and posts about it. It appears the American Hospital Association says it could apply to some non-profit hospitals but is vague in this article so I’m honestly not sure. Seems like it could be a big win for physicians but I’m pretty green on the subject and appreciate the dialogue.

FTC issues final rule banning most noncompete clauses in employer agreements | AHA News

The Federal Trade Commission April 23 voted 3-2 to issue a final rule that would ban as an unfair method of competition contractual terms that prohibit workers from pursuing certain employment after their contract with an employer ends.

www.aha.org

 

[clausewitz2]

Not gonna lie, I have not read the ruling. It’s just something that I’ve seen in various articles and posts about it. It appears the American Hospital Association says it could apply to some non-profit hospitals but is vague in this article so I’m honestly not sure. Seems like it could be a big win for physicians but I’m pretty green on the subject and appreciate the dialogue.

FTC issues final rule banning most noncompete clauses in employer agreements | AHA News

The Federal Trade Commission April 23 voted 3-2 to issue a final rule that would ban as an unfair method of competition contractual terms that prohibit workers from pursuing certain employment after their contract with an employer ends.

www.aha.org

Apparently while the FTC does not have authority over non-profits, it does have statutory authority to examine an entity's non-profit status and decide if it is effectively a sham. So I expected health system are going to want to not draw their attention.

 

[Merovinge]

This could be a huge game changer for physician salaries, particularly for folks who are not on the top end of the distribution in their salaries. It is actually less impactful for psychiatry which has the option for solo or group PP readily available, but will still make a big difference for those choosing to work with big box shops.

I have a personal and long story that I cannot get overly into details for to avoid doxxing myself, but due to the initial non-enforceability of my wife's non-compete she ended up making substantially more money.

I am also very interested to see how this would impact private equity buying up all the MD practices as they use heavy non-competes as one of the main ways to keep their doctors after the buyout.

I would never encourage single issue voting, but these types of changes that could drastically impact not only the financial but personal satisfaction/happiness of one's life are certainly worth paying attention to for any doctors but particularly MD students, resident, or early career docs.

 

[comp1]

This, thankfully, has long been the law in some of the more sane states. It's absolutely and completely unconscionable that any employer can dictate anything about your life when they stop paying you.

 

[calvnandhobbs68]

This could be a huge game changer for physician salaries, particularly for folks who are not on the top end of the distribution in their salaries. It is actually less impactful for psychiatry which has the option for solo or group PP readily available, but will still make a big difference for those choosing to work with big box shops.

I have a personal and long story that I cannot get overly into details for to avoid doxxing myself, but due to the initial non-enforceability of my wife's non-compete she ended up making substantially more money.

I am also very interested to see how this would impact private equity buying up all the MD practices as they use heavy non-competes as one of the main ways to keep their doctors after the buyout.

I would never encourage single issue voting, but these types of changes that could drastically impact not only the financial but personal satisfaction/happiness of one's life are certainly worth paying attention to for any doctors but particularly MD students, resident, or early career docs.

Right imagine that crazy non-compete we were talking about with Talkiatry a while back which effectively tried to ban people from doing telepsych ANYWHERE for a year after quitting.

 

[Candidate2017]

Curious what everyone’s thoughts are regarding the FTC ruling banning non-competes in for-profit organizations. Looks like non-profits are exempt.

https://www.npr.org/2024/04/23/1246655366/ftc-bans-noncompete-agreements-lina-khan

The American Hospital Association is one of the biggest lobbyists.

Pretty much every law passed regarding hospitals favors hospitals at the expense of doctors. There's a reason why hospitals get reimbursed for facility fees and can refer patients to their inhouse labs, pharmacies, and clinics, while doctors are legally prohibited from reaping those financial benefits. So, the FTC is never going to ban hospitals from using physician non-competes.

 

[Sushirolls]

Another issue is the pseudo regulatory agencies, like the ATF & EPA, have various cases on SCOTUS doorsteps which are anticipated to gut their powers, and put legislation back in the hands of the legislature away from runaway agencies - which would impact FTC, EPA, etc rightly so as they shouldn't be able to conjure of things at will.

Do I want non-competes to disappear? Yes. But it should be at the state/federal legislative levels not these organizations.

 

[clausewitz2]

Another issue is the pseudo regulatory agencies, like the ATF & EPA, have various cases on SCOTUS doorsteps which are anticipated to gut their powers, and put legislation back in the hands of the legislature away from runaway agencies - which would impact FTC, EPA, etc rightly so as they shouldn't be able to conjure of things at will.

Do I want non-competes to disappear? Yes. But it should be at the state/federal legislative levels not these organizations.

In what sense are the ATF pseudo-regulatory agencies? They are literally just designed to be regulatory agencies. Rulemaking is the job.

 

[Sushirolls]

That's the problem. Congress is meant to be the rule makers, not other entities. They shouldn't exist in the first place.

For instances the EPA or some other agency wants to say the rope lines for lobster traps are killing off sperm whales or some other whale, they pass some regulation - and poof the entire industry in that area is out of business. There is a case out there about that.

In the past, the entire great logging industry of the PNW was gutted because of spotted owls... only to learn now in the past few years, nope it wasn't logging, but other bigger owls that were eating the smaller spotted owls. So thousands of rural communities were destroyed because of poor regulatory over reach that should never have happened.

Recently the ATF attempted to turn millions of Americans into felons overnight by saying pistol braces are bad. Complete joke, and an over reach yet again.

 

[psycho-matic]

Most physicians at non-profit hospitals aren't actually employed by the hospital. They are usually employed by an associated physician group that does not have a non-profit status.

 

[comp1]

This is well within the scope of the FTC, IMNSHO. However, I do agree that we definitely need state laws in ADDITION to regulatory action to kill the very concept of a non-compete dead. I don't see the US Congress doing anything about this, unfortunately.

 

[clausewitz2]

This is well within the scope of the FTC, IMNSHO. However, I do agree that we definitely need state laws in ADDITION to regulatory action to kill the very concept of a non-compete dead. I don't see the US Congress doing anything about this, unfortunately.

The act of Congress that established the FTC exempted entities that are not organized for profit from their jurisdiction. The legal question is how much that set overlaps with the set of entities claiming tax-exempt non-profit status.

 

[hamstergang]

That's the problem. Congress is meant to be the rule makers, not other entities. They shouldn't exist in the first place.

Didn't Congress create these entities and set the parameters as to what rules they could make? Are you saying Congress should not have been able to make such laws?

 

[Sushirolls]

1) they didn't define well what those parameters are.
2) The consequences of these agencies to create felons out of millions of people or destroy entire industries over night is wrong.
3) In a way, yes, it is wrong, and this is being worked through cases that either are or soon to be on SCOTUS plate to digest. And there is a good chance that their rulings will drastically limit these pseudo governing agencies and force congress to be the one to pass the rulings.
4) These agencies could still exist, but serve to be like super committees. Do their surveys, data analysis, what ever. Package of a bill that what pass muster with budget, and rules compliance. Hand it off to senate/representative whomever. They in turn sponsor the bill, with a major foot note, this procured by Agency XYZ. Congress then does it what its supposed to.

 

[VA Hopeful Dr]

The American Hospital Association is one of the biggest lobbyists.

Pretty much every law passed regarding hospitals favors hospitals at the expense of doctors. There's a reason why hospitals get reimbursed for facility fees and can refer patients to their inhouse labs, pharmacies, and clinics, while doctors are legally prohibited from reaping those financial benefits. So, the FTC is never going to ban hospitals from using physician non-competes.

No they aren't, you just have to be careful about it. Otherwise there would be no physician-owned surgery centers, no one would do any of their own in-house labs/imaging, and multi-specialty groups would be illegal.

 

[comp1]

Hospitals will not become "felons" for trying to push non-competes. They will simply not be enforceable. There's no need to get hyperbolic about this. It's well within FTC's purview and should have been done decades ago.

 

[VA Hopeful Dr]

Hospitals will not become "felons" for trying to push non-competes. They will simply not be enforceable. There's no need to get hyperbolic about this. It's well within FTC's purview and should have been done decades ago.

I'll be shocked if this doesn't get overturned by the courts.

 

[Sushirolls]

Hospitals will not become "felons" for trying to push non-competes. They will simply not be enforceable. There's no need to get hyperbolic about this. It's well within FTC's purview and should have been done decades ago.

Felons is part of my argument in reference to things the ATF has done - not the FTC.
In context of the ATF, it isn't hyperbole, but fact. Here is a youtube to expand on.
Back to my larger point rather than my minutiae:
My argument is against all of these regulatory type agencies.

Do I want non-competes gone, yes. Could I have benefited form this in the past, oh, yes. Cost me thousands of dollars... story for another day.
Are these agencies able to make these sweeping changes? IMO, no, and these things are going to be digested by SCOTUS. Perhaps limiting their power, perhaps ending their power. We'll see.

 

[Cath Up]

Felons is part of my argument in reference to things the ATF has done - not the FTC.
In context of the ATF, it isn't hyperbole, but fact. Here is a youtube to expand on.
Back to my larger point rather than my minutiae:
My argument is against all of these regulatory type agencies.

Do I want non-competes gone, yes. Could I have benefited form this in the past, oh, yes. Cost me thousands of dollars... story for another day.
Are these agencies able to make these sweeping changes? IMO, no, and these things are going to be digested by SCOTUS. Perhaps limiting their power, perhaps ending their power. We'll see.

I would argue the death, destruction, and inequality arising from under-regulation of corporate activity far outweighs the inadvertent or even intended cost of regulatory agencies gone amok like those you mentioned. Democracies with more robust regulation in the setting of capitalism seem to do better than those which allow unfettered profit-seeking. It does make sense that congress should have final say but it has been poorly functioning for decades and it doesn't make sense to relegate everything to the states if most people are too poor to "vote with their feet" and leave when their states are corrupt or have disagreeable policies. There should be a baseline set of rules in a united states (that congress could subsequently overturn, if they wanted) and it is not realistic to wait for them to take action in every realm. I think regulatory agencies outside of congress make sense.

 

[FlowRate]

1) they didn't define well what those parameters are.
2) The consequences of these agencies to create felons out of millions of people or destroy entire industries over night is wrong.
3) In a way, yes, it is wrong, and this is being worked through cases that either are or soon to be on SCOTUS plate to digest. And there is a good chance that their rulings will drastically limit these pseudo governing agencies and force congress to be the one to pass the rulings.
4) These agencies could still exist, but serve to be like super committees. Do their surveys, data analysis, what ever. Package of a bill that what pass muster with budget, and rules compliance. Hand it off to senate/representative whomever. They in turn sponsor the bill, with a major foot note, this procured by Agency XYZ. Congress then does it what its supposed to.

As a bit of a counterpoint, there will be unintended consequences regardless of who is creating the laws. Regulatory agencies have the advantage of developing (or at least trying to develop) actual domain expertise, unlike legislators, who just take the word of whatever lobbyists are most persuasive.

 

[Merovinge]

As a bit of a counterpoint, there will be unintended consequences regardless of who is creating the laws. Regulatory agencies have the advantage of developing (or at least trying to develop) actual domain expertise, unlike legislators, who just take the word of whatever lobbyists are most persuasive.

Absolutely. This notion that right wing politicians across the globe are trying to sell that all government is wrong/corrupt except their elected officials who are somehow actually looking out for their constituents breaks down so rapidly (at least in the US) with the least amount of scrutiny over where they receive their funding from.

I am much more likely to trust someone who is willing to be a government servant with actual domain expertise/graduate degrees in relevant areas, than someone who is just inserting passages into laws from foreign governments.

E.G. Marjorie Taylor-Greene, in a nod to Viktor Orban, has submitted an amendment to the Ukraine aid bill barring funding until "restrictions on Hungarians in Transcarpathia" and other minorities are lifted.

 

[FlowRate]

Absolutely. This notion that right wing politicians across the globe are trying to sell that all government is wrong/corrupt except their elected officials who are somehow actually looking out for their constituents breaks down so rapidly (at least in the US) with the least amount of scrutiny over where they receive their funding from.

I am much more likely to trust someone who is willing to be a government servant with actual domain expertise/graduate degrees in relevant areas, than someone who is just inserting passages into laws from foreign governments.

E.G. Marjorie Taylor-Greene, in a nod to Viktor Orban, has submitted an amendment to the Ukraine aid bill barring funding until "restrictions on Hungarians in Transcarpathia" and other minorities are lifted.

And also the people who set the strategic direction for those agencies are appointed officials--who are appointed by elected officials. So it's not like they're "rogue" regulatory agencies that are totally isolated from political pressure (for better or for worse.)

 

[Stagg737]

As a bit of a counterpoint, there will be unintended consequences regardless of who is creating the laws. Regulatory agencies have the advantage of developing (or at least trying to develop) actual domain expertise, unlike legislators, who just take the word of whatever lobbyists are most persuasive.

See legislative process in every state where NPs have gained FPA...