AHA urges FTC to withdraw proposed rule that would ban noncompete clauses in employer agreements  

The AHA today urged the Federal Trade Commission to withdraw its proposed rule that would ban contractual terms that prohibit workers from pursuing certain employment after their contract with an employer ends.  
  
“The proposed regulation errs by seeking to create a one-size-fits-all rule for all employees across all industries, especially because Congress has not granted the FTC the authority to act in such a sweeping manner,” AHA wrote. “Even if the FTC had the legal authority to issue this proposed rule, now is not the time to upend the health care labor markets with a rule like this.” 
 
In its detailed comment letter, AHA said if FTC moves forward, it must exempt the hospital field or, at the very least doctors and senior hospital executives from its ban on non-compete clauses.  
 
“[T]he weight of the existing research indicates that non-compete agreements for certain categories of employees are beneficial.…  Any final rule must take full account of both the existing economic literature and the real-world experience of hospitals and health systems, which has been that non-compete agreements for physicians and senior executives incentivize recruitment, retention, training, investments in career-building (e.g., marketing and building individual physician practices) and the sharing of a broad range of proprietary information,” the AHA wrote.   
 
The proposed rule, if finalized, will apply only to for-profit hospitals. The AHA also urged the FTC “to exempt for-profit hospitals from any final rule it issues until it can better study the impact that applying the rule in an uneven fashion, as the law requires, would have on labor markets that include both non-profit and for-profit hospitals.”  
 
Comments on the proposed rule are currently due on March 20.