FTC bans non competes

[GravelRider]

It’s tricky. I know it’s a broad decision across many industries (not just the health care) But anesthesia rads em path etc really don’t control who they can see.

But primary care or speciality care with clinics do control who they can see. They can jump from one hospital based practice to another and take patients with them. It’s tricky.

What about a dentist bringing in a younger dentist who will eventually buyout their practice. But it’s suppose to be a 3 year commitment.

But after 2 years. That younger dentist leaves the practice (has access to the older dentist clients) and builds clinic down the street. That younger dentist is stealing patients from the established dentist. That’s just wrong.

Patient lists can be covered by nondisclosure agreements, but we all know how useless that is with everyone having internet access. So the overly restrictive non-compete clauses took their place. The non-compete clauses restrict where you can work and who you can work for. Some of these non-compete clauses have become beyond absurd. I’ve seen ones with statewide or even nationwide restrictions. They’ve gotten to the point where they are no longer protecting trade secrets, but rather restricting your ability to earn a living to the best of your ability. As with most things, businesses took them too far, which has invited the increased scrutiny.

I would say that for anesthesia specifically, non-compete clauses bear a huge amount of the responsibility for the wage stagnation and depression that occurred in the decade prior to this current environment. Non-compete clauses have probably cost me $500k or more in my short 10 year career thus far.

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[caligas]

I’m lost, private group at non profit hospital, is the non compete I signed in effect or no?

 

[Dr. Rude]

I’m lost, private group at non profit hospital, is the non compete I signed in effect or no?

They are in effect atleast for awhile.
Nothing is certain. But in the future it is likely that the noncompete you signed with the private group will not be in effect. A noncompete that your group signed with the hospital is more likely to be in effect. As will an individual noncompete that you signed with the hospital. I had to these three non competes when we were a private group.

 

[caligas]

They are in effect atleast for awhile.
Nothing is certain. But in the future it is likely that the noncompete you signed with the private group will not be in effect. A noncompete that your group signed with the hospital is more likely to be in effect. As will an individual noncompete that you signed with the hospital. I had to these three non competes when we were a private group.

Interesting

We just have the first one of those 3

 

[aneftp]

There are a lot of gotcha with the non competes

Like if u sold out ur practice like the usap Colorado docs. Those non competes still apply. That’s why I have zero sympathy for those usap docs who sold out in 2015. No matter how bad the deal turned out (because they were hedging on usap stock begin worth a lot more)

So their non competes really would have been valid even with their new ftc ruling
My pain friend is about to sell out part of his shares at pain cnet we and his non compete will be valid for the next 5 years as well per terms of the contract.

 

[DoctwoB]

It’s tricky. I know it’s a broad decision across many industries (not just the health care) But anesthesia rads em path etc really don’t control who they can see.

But primary care or speciality care with clinics do control who they can see. They can jump from one hospital based practice to another and take patients with them. It’s tricky.

What about a dentist bringing in a younger dentist who will eventually buyout their practice. But it’s suppose to be a 3 year commitment.

But after 2 years. That younger dentist leaves the practice (has access to the older dentist clients) and builds clinic down the street. That younger dentist is stealing patients from the established dentist. That’s just wrong.

Non-competes are different from non-solicitation agreements.

I am in california where non-competes are illegal. My contract still includes a non-solicitation agreement where I am not allowed to contact any patients to bring them with me to a new practice. For legal/continuity purposes, they receive a form letter stating i have left and my new practice location.

 

[periopdoc]

It may be too expensive for one group, but not for the NRLB.
To your second point, you can get around this by making everyone a partner.

I don't see how that changes anything. Everyone is already a full partner (except during the 1-year probationary period). The non-compete protected us from a few partners peeling off and negotiating a separate contract with the hospital behind our backs. Now, we have no protection against that, and from the hospital trying to negotiate individual employment contracts with our partners.

 

[periopdoc]

They can't though, the FTC literally does not have jurisdiction over "true non-profit" entities by nature of it being...the Federal Trade Commission.

Which is exactly what they stated...they do have the ability to evaluate whether they consider entities that claim to be nonprofits to ACTUALLY be nonprofits or not for trade purposes as noted above.

Except they have explicitly applied rules to "non-profit" hospitals before, and they could have here. These simply aren't true non-profits.

 

[periopdoc]

What kind of a deal? Secret back room deals to provide anesthesia?

Happens more often than we would like to think, but was more common in the days of an oversupply of anesthesiologists.

 

[dozitgetchahi]

What’s wrong is trying to control where and when someone else can practice medicine with or without you. Your business is your concern. If you want to keep your patients you should look to increase your patient relations so that they are more attached to your practice than an individual doctor and not focus on trying to limit someone else’s career. No former employer or job should have a say in someone’s life or their jobs going forward because they’re concerned about competition. That’s insane and controlling.

Exactly.

Also, my experience as an OP doctor with patient behavior is this: patients may have loyalty to a *specific physician*, but not really to a practice. If patients really like Dr. Jones, they’re likely to follow Dr Jones wherever he/she goes. Patients could generally give a **** less about whether Dr Jones works for X hospital or Z medical group, as long as their insurance works there (and sometimes they like a doc so much that they’ll pay cash to keep seeing them even if it doesn’t). That’s just how the cookie crumbles. If you like watching Lebron, you don’t really care if he’s a Laker, a Cavalier etc.

The whole notion that the “patients are the property of the practice” is poppycock. Patients are beholden to no one and are free to leave at any time. If the practice loses a good physician, see how many of their patients stay.

 

[kb1900]

I encourage people to actually read the filing documents instead of sitting here uncertain. They explicitly discuss physicians and hospitals throughout pages 170-200. Yes the entire document is 570 double spaced pages. 173 has direct comments from a couple healthcare workers.



you can read the entire thing in an hour

 

[bronx43]

It’s tricky. I know it’s a broad decision across many industries (not just the health care) But anesthesia rads em path etc really don’t control who they can see.

But primary care or speciality care with clinics do control who they can see. They can jump from one hospital based practice to another and take patients with them. It’s tricky.

What about a dentist bringing in a younger dentist who will eventually buyout their practice. But it’s suppose to be a 3 year commitment.

But after 2 years. That younger dentist leaves the practice (has access to the older dentist clients) and builds clinic down the street. That younger dentist is stealing patients from the established dentist. That’s just wrong.

The days of selling a practice simply because you "built a practice" is over. No one buys practices anymore, since it's largely worthless. Entirely pointless to pay some boomer 7 figures for the "privilege" of MAYBE keeping his/her clientele. Patients go wherever they want nowadays. You can always build up your own panel over 2-3 years without contributing to someone else's post retirement travel fund.

Once this goes into effect, the older dentist in this scenario would think twice about giving up patients for no reason other than to dump his/her "practice" to the young chump fresh from dental school.

 

[GravelRider]

The days of selling a practice simply because you "built a practice" is over. No one buys practices anymore, since it's largely worthless. Entirely pointless to pay some boomer 7 figures for the "privilege" of MAYBE keeping his/her clientele. Patients go wherever they want nowadays. You can always build up your own panel over 2-3 years without contributing to someone else's post retirement travel fund.

Once this goes into effect, the older dentist in this scenario would think twice about giving up patients for no reason other than to dump his/her "practice" to the young chump fresh from dental school.

This will never go into effect. It will be overturned in federal court in a matter of weeks. Any discussion is purely academic.

 

[aneftp]

This will never go into effect. It will be overturned in federal court in a matter of weeks. Any discussion is purely academic.

What do u mean it won’t into effect.

It’s not like a rash decision the ftc made. They paused the decision for a year as well to gather more information. It was a 3-2 vote. So tons of lobbying power involved here

I’m sure in the healthcare industry the American Hospital association fiercely opposed ending the non compete so they can keep physician salaries down.

 

[bronx43]

This will never go into effect. It will be overturned in federal court in a matter of weeks. Any discussion is purely academic.

I highly doubt that it will be overturned. They may carve out physician noncompetes, but it'll be implemented broadly otherwise.

 

[dozitgetchahi]

This will never go into effect. It will be overturned in federal court in a matter of weeks. Any discussion is purely academic.

I think it’s quite likely that it DOES go into effect. And if the courts try to strike it down on the grounds that the FTC is overstepping its boundaries etc, then expect people to start lobbying Congress to see legislation in that direction.

People are mad about this, and people are right to be mad about this. Noncompetes are fundamentally anti-free market and, IMHO, un-American. They’re a particularly ridiculous example of the brand of “crony capitalism” that has come to dominate American politics. They should have been thrown in the garbage can a long time ago.

 

[GravelRider]

What do u mean it won’t into effect.

It’s not like a rash decision the ftc made. They paused the decision for a year as well to gather more information. It was a 3-2 vote. So tons of lobbying power involved here

I’m sure in the healthcare industry the American Hospital association fiercely opposed ending the non compete so they can keep physician salaries down.

Chamber of Commerce and multiple other business groups launched lawsuits immediately. I’m pretty confident it will be struck down before the 120 days.

I think it’s quite likely that it DOES go into effect. And if the courts try to strike it down on the grounds that the FTC is overstepping its boundaries etc, then expect people to start lobbying Congress to see legislation in that direction.

People are mad about this, and people are right to be mad about this. Noncompetes are fundamentally anti-free market and, IMHO, un-American. They’re a particularly ridiculous example of the brand of “crony capitalism” that has come to dominate American politics. They should have been thrown in the garbage can a long time ago.

There has been bipartisan legislation proposed, but I wouldn’t hold my breath when it comes to Congress. Anything passed by Congress would almost certainly have carve-outs allowing non-competes for high earners.

 

[dozitgetchahi]

Chamber of Commerce and multiple other business groups launched lawsuits immediately. I’m pretty confident it will be struck down before the 120 days.



There has been bipartisan legislation proposed, but I wouldn’t hold my breath when it comes to Congress. Anything passed by Congress would almost certainly have carve-outs allowing non-competes for high earners.

Not sure about that.

There was a lot of discussion in the FTC documentation about how in the context of medicine, these noncompetes disrupt medical care (especially in rural areas) by forcing doctors to leave the area.

People have locked onto this as an issue.

 

[aneftp]

Chamber of Commerce and multiple other business groups launched lawsuits immediately. I’m pretty confident it will be struck down before the 120 days.



There has been bipartisan legislation proposed, but I wouldn’t hold my breath when it comes to Congress. Anything passed by Congress would almost certainly have carve-outs allowing non-competes for high earners.

We will see.

Remember when Medicare ruling about opt outs 20 plus years ago. Once that ruling was made. It was very hard to overturn when they let the states decide.

Maybe they will let each state decide on non competes.

 

[OTCAwesome]

Not sure about that.

There was a lot of discussion in the FTC documentation about how in the context of medicine, these noncompetes disrupt medical care (especially in rural areas) by forcing doctors to leave the area.

People have locked onto this as an issue.

Totally agree. It was actually pretty refreshing to see the FTC taking these "non-Profits" to task,. @GravelRider did you actually read the official 570 page PDF? If not, take a look at page 372 onward. I think it may change your thought process.

 

[GravelRider]

Totally agree. It was actually pretty refreshing to see the FTC taking these "non-Profits" to task,. @GravelRider did you actually read the official 570 page PDF? If not, take a look at page 372 onward. I think it may change your thought process.

I hope you are right. However well-intentioned and well thought out the document is doesn’t change my opinion that a federal court will overturn it on the grounds that the FTC doesn’t have the authority to make such a sweeping rule. I hope I am proven wrong, but I don’t think I will be. Our current judicial system often rules in favor of businesses over individual rights and I think they will do the same here.

 

[calvnandhobbs68]

Not sure about that.

There was a lot of discussion in the FTC documentation about how in the context of medicine, these noncompetes disrupt medical care (especially in rural areas) by forcing doctors to leave the area.

People have locked onto this as an issue.

Even outside of rural areas, say you sign a noncompete with a huge ass health system (like CCF, Mayo, HCA, Advent, UPMC, etc). What exactly is the point of that noncompete besides keeping you locked into that job? Are you really presenting a ton of "competition" to the health system with billions of dollars in revenue if you want to go setup a private practice 5 miles away from one of their hospitals you never even worked at where you probably get LESS favorable insurance reimbursement and can bill LESS without having facility fees and ****?

I mean outside of healthcare, there's all kinds of ridiculous egregious things that came up during the comment period for the FTC. Janitors having to sign noncompetes, crazy stuff like that.

It's absurd and rightly so needs to be heavily heavily restricted.

 

[triggermaster]

Even outside of rural areas, say you sign a noncompete with a huge ass health system (like CCF, Mayo, HCA, Advent, UPMC, etc). What exactly is the point of that noncompete besides keeping you locked into that job? Are you really presenting a ton of "competition" to the health system with billions of dollars in revenue if you want to go setup a private practice 5 miles away from one of their hospitals you never even worked at where you probably get LESS favorable insurance reimbursement and can bill LESS without having facility fees and ****?

I mean outside of healthcare, there's all kinds of ridiculous egregious things that came up during the comment period for the FTC. Janitors having to sign noncompetes, crazy stuff like that.

It's absurd and rightly so needs to be heavily heavily restricted.

Plus you have every right to compete. You aren’t getting trade secrets that you’ll use against them and they aren’t investing in training you. You show up
Fully trained and practice standard anesthesia. There should be no noncompetes.

 

[jwk]

I think it’s quite likely that it DOES go into effect. And if the courts try to strike it down on the grounds that the FTC is overstepping its boundaries etc, then expect people to start lobbying Congress to see legislation in that direction.

People are mad about this, and people are right to be mad about this. Noncompetes are fundamentally anti-free market and, IMHO, un-American. They’re a particularly ridiculous example of the brand of “crony capitalism” that has come to dominate American politics. They should have been thrown in the garbage can a long time ago.

You forget - all it takes is one federal judge to issue an injunction and it all comes to a screeching halt. No court decision at that point - just a pause.

 

[sevoflurane]

Plus you have every right to compete. You aren’t getting trade secrets that you’ll use against them and they aren’t investing in training you. You show up
Fully trained and practice standard anesthesia. There should be no noncompetes.

this

 

[dozitgetchahi]

Even outside of rural areas, say you sign a noncompete with a huge ass health system (like CCF, Mayo, HCA, Advent, UPMC, etc). What exactly is the point of that noncompete besides keeping you locked into that job? Are you really presenting a ton of "competition" to the health system with billions of dollars in revenue if you want to go setup a private practice 5 miles away from one of their hospitals you never even worked at where you probably get LESS favorable insurance reimbursement and can bill LESS without having facility fees and ****?

I mean outside of healthcare, there's all kinds of ridiculous egregious things that came up during the comment period for the FTC. Janitors having to sign noncompetes, crazy stuff like that.

It's absurd and rightly so needs to be heavily heavily restricted.

I know.

I once was given a contract for a big health system that covered a huge portion of a state I was considering moving to. The noncompete clause was ridiculously broad and basically meant you couldn’t work within 50 miles of any of their facilities. That pretty much boxed you out of the entire state.

There is no way that’s ok, and it should not be legal. Being fired from a job shouldn’t mean that you immediately have to leave a geographical area of hundreds of miles if you want to be able to work again.

 

[anonperson]

Any opposition to non competes is based on pure greed.

There are no non competes in California and the health care industry functions fine. Physicians have freedom to leave crappy jobs and still practice in the same community.

It's great.

I worked for a small health system (bogus non profit status) who tried to get cute during contract renegotiates. Several left and we all found jobs with different employers with a couple of miles. I still even operate out of the same hospital.

No way in hell should a former employer control where I can work in the future. If they want that kind of say, they'd better pay seven figures.

 

[MTGas2B]

Happens more often than we would like to think, but was more common in the days of an oversupply of anesthesiologists.

Been a while, but I remember when that exact scenario happened to the group at Northwest Hospital in Seattle, about 20 year ago.

I think these scenarios are where NDAs are needed. Can't use your inside knowledge of contracts and the books to out negotiate your old group.

 

[periopdoc]

This will never go into effect. It will be overturned in federal court in a matter of weeks. Any discussion is purely academic.

It won't be overturned in a matter of weeks. It is quite likely that an injunction will be issued, within the 120 day window, against enforcement.

What do u mean it won’t into effect.

It’s not like a rash decision the ftc made. They paused the decision for a year as well to gather more information. It was a 3-2 vote. So tons of lobbying power involved here

I’m sure in the healthcare industry the American Hospital association fiercely opposed ending the non compete so they can keep physician salaries down.

More like they paused it for a year to garner votes for the current admin. Over a year ago, they already had all the info and comments that they needed.

With the huge money interests on both sides, this will eventually go to The Supreme Court. I would put money on it being struck down, based on the current court's view on legislation via the administrative state. One of the commissioners voted against it on the basis that the FTC doesn't have the authority to enact these rules (legislation). I agree with him, though I do wish congress would vote to eliminate non-competes.

 

[AKMD_1984]

Any opposition to non competes is based on pure greed.

There are no non competes in California and the health care industry functions fine. Physicians have freedom to leave crappy jobs and still practice in the same community.

It's great.

I worked for a small health system (bogus non profit status) who tried to get cute during contract renegotiates. Several left and we all found jobs with different employers with a couple of miles. I still even operate out of the same hospital.

No way in hell should a former employer control where I can work in the future. If they want that kind of say, they'd better pay seven figures.

Love the word “cute” in this context 👌

 

[Dr. Rude]

Any opposition to non competes is based on pure greed.

Only the other fella is greedy. Love em or hate em, they provide powerful leverage for the employer if enforceable. Where you stand depends on where you sit. As an employee doc I hate em. As a co-owner in a private practice, it was the practice's most valuable asset-for the owners.

 

[dizzy21]

There is a carve out for “senior” employees with decision making responsibilities. I think the AMCs will attempt to make everyone “senior” by sending out a BS survey to everyone so they can continue to use non competes. There was a WSJ podcast today about this today how there is title inflation for even entry level positions in other industries.

I anticipate they will try to find ways around this rule even if it ends up being upheld by the courts.

 

[Dr. Rude]

Nope, doesn't matter. You just can't go work for a private GI center where you currently provide anesthesia as a member of another group no matter who's "idea" it is.

It doesn’t work that way in law firms. Atleast in one state according to a family member. E.g., I sign a non solicitation covenant with my law firm. I leave. I can’t solicit clients….but the client hears that I leave and initiates contact with me. I am good to take them on.

 

[DireWolf]

Non competes are unenforceable for anethesiologists. The law is meant to protect companies from losing proprietary information. Anesthesiologists do not bring patients into the system. I have never seen a successful non compete against an anesthesiologist (n= 20). The hospitals in our area still have them in the contract but don't enforce anymore because they know they'll lose and waste money on attorney fees.

 

[VA Hopeful Dr]

Non competes are unenforceable for anethesiologists. The law is meant to protect companies from losing proprietary information. Anesthesiologists do not bring patients into the system. I have never seen a successful non compete against an anesthesiologist (n= 20). The hospitals in our area still have them in the contract but don't enforce anymore because they know they'll lose and waste money on attorney fees.

State dependant

 

[amyl]

USAP has successfully enforced their non competes in vegas

 

[kidthor]

Non competes are unenforceable for anethesiologists. The law is meant to protect companies from losing proprietary information. Anesthesiologists do not bring patients into the system. I have never seen a successful non compete against an anesthesiologist (n= 20). The hospitals in our area still have them in the contract but don't enforce anymore because they know they'll lose and waste money on attorney fees.

Not at all true. They are quite enforceable. And do you want to screw around with your deep pockets litigious AMC to find out?

I’ve seen them enforced against anesthesiologists many times.

Nowhere do noncompete laws consider whether you bring people into the system, that simply not a legal factor.

 

[DireWolf]

100% true. All anesthesiologists have won their cases in our area for 20+ years. That's why hospitals have stopped enforcing them. You obviously don't know anything about non compete laws. They are not meant to be punitive. They are only meant to protect a company's propriety information and stop competing companies from "stealing business". An anesthesiologist is not a surgeon or IM specialist. Since we don't bring patients into the system, the hospital doesn't lose business. Only a corrupt or inept judge would allow a non compete to stand against an anesthesiologist. And any decent lawyer can destroy a case to enforce it. Grow up and educate yourself

 

[kidthor]

100% true. Did I stutter? All anesthesiologists have won their cases in our area for 20+ years. You obviously don't know anything about non compete laws. They are not meant to be punitive. They are only meant to protect a company's propriety information and stop competing companies from "stealing business". An anesthesiologist is not a surgeon or IM specialist. Since we don't bring patients into the system, the hospital doesn't lose business. Only a corrupt or inept judge would allow a non compete to stand against an anesthesiologist. And any decent lawyer can destroy a case to enforce it. Grow up and educate yourself

Cool story, brah.

 

[VA Hopeful Dr]

100% true. All anesthesiologists have won their cases in our area for 20+ years. That's why hospitals have stopped enforcing them. You obviously don't know anything about non compete laws. They are not meant to be punitive. They are only meant to protect a company's propriety information and stop competing companies from "stealing business". An anesthesiologist is not a surgeon or IM specialist. Since we don't bring patients into the system, the hospital doesn't lose business. Only a corrupt or inept judge would allow a non compete to stand against an anesthesiologist. And any decent lawyer can destroy a case to enforce it. Grow up and educate yourself

The bold is the important part. Some states don't allow non-competes at all. Some allow them but are easy to get thrown out if too restrictive. Some states allow them pretty much no matter how restrictive they are.

Its nice that your area is one that doesn't enforce them (seriously, that sounds great), but that is absolutely not that case for everywhere.

In the more restrictive states, it doesn't matter if you bring in patients or not. In my state I've seen them upheld against hospitalists and EM doctors multiple times. In fact my practice lawyer is locally well known for getting fairly bad non-competes upheld in court.

 

[DireWolf]

The bold is the important part. Some states don't allow non-competes at all. Some allow them but are easy to get thrown out if too restrictive. Some states allow them pretty much no matter how restrictive they are.

Its nice that your area is one that doesn't enforce them (seriously, that sounds great), but that is absolutely not that case for everywhere.

In the more restrictive states, it doesn't matter if you bring in patients or not. In my state I've seen them upheld against hospitalists and EM doctors multiple times. In fact my practice lawyer is locally well known for getting fairly bad non-competes upheld in court.

It's sad that some areas/judges allow abuse of the law. Non competes are not allowed to be punitive.. having an employee leave and go to another company where it doesn't unfairly hurt your business and unfairly help the other business is totally protected. It would be like enforcing a non compete on a cook at McDonald's going to Taco Bell down the street. Physicians who don't bring in revenue on their own accord and don't hold proprietary trade secrets are protected under non compete laws. Examples include anesthesiologists, ER docs, radiologists, pathologists, hospitalists, etc. It's up to the judges to properly enforce them.

 

[DireWolf]

Cool story, brah.

Totally, little guy

You are clearly ignorant when it comes to non compete laws, so stop doing a disservice to this forum. Maybe comment on the dildo thread, where you're seemingly an expert.

 

[VA Hopeful Dr]

It's sad that some areas/judges allow abuse of the law. Non competes are not allowed to be punitive.. having an employee leave and go to another company where it doesn't unfairly hurt your business and unfairly help the other business is totally protected. It would be like enforcing a non compete on a cook at McDonald's going to Taco Bell down the street. Physicians who don't bring in revenue on their own accord and don't hold proprietary trade secrets are protected under non compete laws. Examples include anesthesiologists, ER docs, radiologists, pathologists, hospitalists, etc. It's up to the judges to properly enforce them.

Or those judges follow the law in the states where they work...

 

[DireWolf]

Or those judges follow the law in the states where they work...

So you're saying some states have non compete laws that are punitive and arbitrary? And those laws are being upheld as constitutional?

If so then the cook at McDonald's can totally be subject to a non compete in the states you describe. Wild

 

[VA Hopeful Dr]

So you're saying some states have non compete laws that are punitive and arbitrary? And those laws are being upheld as constitutional?

If so then the cook at McDonald's can totally be subject to a non compete in the states you describe. Wild

Depends on your definition of punitive and arbitrary

 

[DireWolf]

Depends on your definition of punitive and arbitrary

Must be an attorney lol. This is cut and dry stuff.

But this is exactly why the Biden administration is banning them. They are unfair and corrupt.. a relic of the age old practice of big businesses screwing over working people.

And btw your practice attorney is a POS human being. Sounds like a predatory group.

 

[VA Hopeful Dr]

Must be an attorney lol. This is cut and dry stuff.

But this is exactly why the Biden administration is banning them. They are unfair and corrupt.. a relic of the age old practice of big businesses screwing over working people.

Is anything in law 100% cut and dry?

Not a lawyer, FP for 14 years. None of my noncompetes or my wife's (IM) have been onerous at all, but maybe we're just lucky.

 

[Arch Guillotti]

Closing at least temporarily. Too many complaints.

I had a non compete and could not be guaranteed it wouldn't be enforced. I chose not to fight the academic machine.