FTC Bans Noncompetes

[Freud’sMommy]

FTC Announces Rule Banning Noncompetes | Federal Trade Commission

I imagine group practices will be less likely to hire, and more private practices would be created overall. Unsure about hospital employment for psychologists? I know noncompetes are ubiquitous among hospital-employed physicians.

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[WisNeuro]

Expect court challenges to stay this decision for at least a bit beyond it's initial effectiveness in 120 days.

 

[Therapist4Chnge]

Great news. Non-competes have always been sketchy at best. Written correctly, I can see a use, but so many companies write ridiculous ones that should fail in court when challenged, but most psychologists don’t challenge them.

Now we just need psychologists to unionize, and maybe we can get more bargaining power in hospital systems.

 

[ClinicalABA]

They've been illegal for psychologists (and any other profession that serves "the good of the public) in MA for as long as I can remember. Recent legislation has made them very difficult in other fields, with the addition of a "garden clause" requirement- iirc- that employers pay ex- employees 50% of salary for 1-2 years if they want to hold employee to non-compete (I think the term comes from English law slang about paying someone to "work in their garden").

Always good to point out that other contractual covenants, such a no-solicitation (also illegal for psychologists in MA) may still apply in your states. Also- even though non-competes or non-solicitations may be illegal, a work history of flipping between agents and "stealing" clients will eventually have negative impact on your professional reputation, especially in small areas (geographically or clinically). Be cautious.

 

[ClinicalABA]

Great news. Non-competes have always been sketchy at best.

Especially problematic in mental health care when they lead to artificial limitations on the public's chanceof finding a therapist.

Now we just need psychologists to unionize, and maybe we can get more bargaining power in hospital systems.

I know of several agencies where the psychologists are part of the bargaining unit. In such instances, they are almost universally grossly underpaid (relative to what psychologists CAN make) yet paid fairly in regards to what they do (see similar clients for outpatient therapy as do masters level therapists) and to what they bill (therapy codes that pay only slightly more the those of masters level clinicians and clearly not enough to justify much higher salaries than said clinicians). I'm very pro-union (proud ex-member of the United Auto Workers- but that's a different, less interesting than you might think story!), but it's got to be the right union.

 

[WisNeuro]

Especially problematic in mental health care when they lead to artificial limitations on the public's chanceof finding a therapist.

I know of several agencies where the psychologists are part of the bargaining unit. In such instances, they are almost universally grossly underpaid (relative to what psychologists CAN make) yet paid fairly in regards to what they do (see similar clients for outpatient therapy as do masters level therapists) and to what they bill (therapy codes that pay only slightly more the those of masters level clinicians and clearly not enough to justify much higher salaries than said clinicians). I'm very pro-union (proud ex-member of the United Auto Workers- but that's a different, less interesting than you might think story!), but it's got to be the right union.

In most locales, there is no problem finding a therapist. Can't swing a dead cat without hitting one. Now, finding a good and competent therapist is another matter.

 

[Sanman]

In most locales, there is no problem finding a therapist. Can't swing a dead cat without hitting one. Now, finding a good and competent therapist is another matter.

Where are you swinging these dead cats, the local CE conference?

In my area, the issue is usually finding one that accepts certain insurances. Cash pay is a different story.

 

[AbnormalPsych]

Good

 

[msc545]

Non-competes and non-solicitations have been illegal in California (where I live and practice) for years, yet I still get proposed contracts that include both.

 

[BuckeyeLove]

Huge news. You're a garbage person if you're a psychologist and have non-competes for your "employees." You know who never has non-competes? Attorneys.

 

[WisNeuro]

Where are you swinging these dead cats, the local CE conference?

In my area, the issue is usually finding one that accepts certain insurances. Cash pay is different story.

I can get immediate appointments for general therapy, psychiatry, SUD tx, DA, among other things. Insurance-based, through some of the chain practices here. For certain other niche issues, I have a list of providers I can go to. For the former, I do not send patients there, as I know the work products they churn out. So, very easy to just find someone, and I bet it's similar in most metro areas. If you're anything like me, you might have some VA blinders on, my list of people to refer to and knowledge of the MH arena in my area exploded when I left the VA and got into community and private practice.

 

[Ollie123]

Fantastic news and about damn time. That said, we'll see if this gets upheld. Seems pretty well-established at the state level that banning non-competes is allowable, but I suspect there will be lots of debate around whether it is within the authority of the FTC. Regardless, should put folks issuing them on notice.

 

[WisNeuro]

Fantastic news and about damn time. That said, we'll see if this gets upheld. Seems pretty well-established at the state level that banning non-competes is allowable, but I suspect there will be lots of debate around whether it is within the authority of the FTC. Regardless, should put folks issuing them on notice.

This will be the basis of the legal challenges and inevitable stays, while this works through the legal system.

 

[PsyDr]

If you include non-compete clauses in your contracts, you are implying that your employment does not add value to the employee.

There is always overhead. If it is cheaper, more convenient, and more rewarding to be an employee, people will not compete with you. This is why those percentages matter. If you make it cheaper and nicer to stay than leave, you never have a problem.

 

[ClinicalABA]

Non-competes and non-solicitations have been illegal in California (where I live and practice) for years, yet I still get proposed contracts that include both.

Yeah- I have one in my contract, even though totally unenforceable. I had the contract reviewed by an employment attorney before I signed, and he said not to worry about it as it is not enforceable and has no bearing on anything else in the contract. MA and CA are both "blue pen" states in regards to contractual covenants, meaning that a court can cross out the non-compete (or a portion thereof) and hold the rest of the contract valid. This was historically done with a blue pen due to mimeographing (i can smell the worksheets now- and if you know what I'm talking about you are old!). In these cases employees add them as a deterrent and hope the employee is afraid, even though they aren't valid. Not all state are blue pen- in some, courts must invalidate the entire contract to strike out an unfair non-compete.

 

[ClinicalABA]

I can get immediate appointments for general therapy, psychiatry, SUD tx, DA, among other things. Insurance-based, through some of the chain practices here. For certain other niche issues, I have a list of providers I can go to. For the former, I do not send patients there, as I know the work products they churn out. So, very easy to just find someone, and I bet it's similar in most metro areas. If you're anything like me, you might have some VA blinders on, my list of people to refer to and knowledge of the MH arena in my area exploded when I left the VA and got into community and private practice.

Definitely not the case here (relatively rural area), especially for anything regarding children or adolescents- even just "plain old" outpatient therapy. Even for private pay, but especially for insurance, and especially so for medicaid.

 

[Sanman]

I can get immediate appointments for general therapy, psychiatry, SUD tx, DA, among other things. Insurance-based, through some of the chain practices here. For certain other niche issues, I have a list of providers I can go to. For the former, I do not send patients there, as I know the work products they churn out. So, very easy to just find someone, and I bet it's similar in most metro areas. If you're anything like me, you might have some VA blinders on, my list of people to refer to and knowledge of the MH arena in my area exploded when I left the VA and got into community and private practice.

While I am not as connected as some, I tend to be fairly aware of the market outside of the VA as my patients often utilized community MH due to distance and I also tend to keep tabs myself for private practice reasons. There are certainly a few big box practices including a few Lifestance health offices opened not too long ago. They are fairly full though. The more rural areas only have a few midlevels and barely any psychologists. I am seeing a lot more online only solo practices pop up with a few insurances. Again, this may be regional depending on general pay and overhead costs.

 

[WisNeuro]

While I am not as connected as some, I tend to be fairly aware of the market outside of the VA as my patients often utilized community MH due to distance and I also tend to keep tabs myself for private practice reasons. There are certainly a few big box practices including a few Lifestance health offices opened not too long ago. They are fairly full though. The more rural areas only have a few midlevels and barely any psychologists. I am seeing a lot more online only solo practices pop up with a few insurances. Again, this may be regional depending on general pay and overhead costs.

Rural areas still def an issue. Also, issues with in-person therapy. Lot of people running telehealth only private practices these days. Not my cup of tea.

 

[Sanman]

Rural areas still def an issue. Also, issues with in-person therapy. Lot of people running telehealth only private practices these days. Not my cup of tea.

Very much my cup of tea at the moment. So, I am keeping tabs.

 

[AcronymAllergy]

I'm also in the camp that a non-compete, in most instances, means that you realize you aren't offering something of much value to the employee. Or that you don't trust your employees and/or your referral sources. After all, if you do good work, your referral sources will probably want to keep coming back to you regardless. And if you offer your employees a good deal, and make them feel valued and respected, they'll probably stick around for a little while. If your employees think they can do better somewhere else, more power to them; do you really want to have a bunch of bitter employees sticking around solely because you're trying to bar them from working anywhere else?

 

[Sanman]

I'm also in the camp that a non-compete, in most instances, means that you realize you aren't offering something of much value to the employee. Or that you don't trust your employees and/or your referral sources. After all, if you do good work, your referral sources will probably want to keep coming back to you regardless. And if you offer your employees a good deal, and make them feel valued and respected, they'll probably stick around for a little while. If your employees think they can do better somewhere else, more power to them; do you really want to have a bunch of bitter employees sticking around solely because you're trying to bar them from working anywhere else?

Agreed. That said, we all know that most of those employers gobble up the new grads, mid levels, and other folks that do not have the means to establish their own practice. The good practices are few and far between. The group practice I worked at with the best deal was small and I found it via word of mouth. Most anything on an employment site is terrible. Telehealth will do more to solve this issue than the FTC ruling, IMO.

 

[Ollie123]

Seems very common for major medical centers to have these in place. Even when enforcement isn't possible they have the resources to make it annoyingly frustrating to fight, which I've had a number of friends be caught up by. It seems particularly frustrating when waitlists are extraordinarily long - the hospital system is not going to run out of patients any time soon and gets more referrals than they can possibly manage. Definitely seems to be more about ensuring they can continue treating employees like crap than anything else.

 

[Sanman]

Seems very common for major medical centers to have these in place. Even when enforcement isn't possible they have the resources to make it annoyingly frustrating to fight, which I've had a number of friends be caught up by. It seems particularly frustrating when waitlists are extraordinarily long - the hospital system is not going to run out of patients any time soon and gets more referrals than they can possibly manage. Definitely seems to be more about ensuring they can continue treating employees like crap than anything else.

Psychologist friends or physician friends? Most of the local medical centers in my area are becoming local monopolies for medical care by purchasing the nearby PCP groups and a lot physicians are leaving, replaced by NPs. I have not seen this as much in mental health though.

 

[WisNeuro]

Psychologist friends or physician friends? Most of the local medical centers in my area are becoming local monopolies for medical care by purchasing the nearby PCP groups and a lot physicians are leaving, replaced by NPs. I have not seen this as much in mental health though.

Lifestance. They've bought up 12 practices in my area and counting. One of their recruiters contacted me, as they apparently have a hard time finding neuropsych. I told him that I could give him an estimate on fixing the typographical and factual errors on their webpage re: neuropsych testing, and he never got back to me.

 

[Sanman]

Lifestance. They've bought up 12 practices in my area and counting. One of their recruiters contacted me, as they apparently have a hard time finding neuropsych. I told him that I could give him an estimate on fixing the typographical and factual errors on their webpage re: neuropsych testing, and he never got back to me.

Yeah, they are a bit different though. Plus, they seem to be getting sued for clawing back salary (apparently they are are "advancing you" your billables). I'm not really sure what their business model is offering. Taking 45% of an agreed rate for what? Getting you paneled?

 

[Ollie123]

Psychologist friends or physician friends? Most of the local medical centers in my area are becoming local monopolies for medical care by purchasing the nearby PCP groups and a lot physicians are leaving, replaced by NPs. I have not seen this as much in mental health though.

Both, though in this case was referencing psychologists. Very much seeing the same with the AMCs buying up PCP practices at my previous area.

Not so much here, but we're a much smaller system that frankly can barely manage its own existence so its probably best we not look to expand any time soon...

 

[Therapist4Chnge]

If you include non-compete clauses in your contracts, you are implying that your employment does not add value to the employee.

There is always overhead. If it is cheaper, more convenient, and more rewarding to be an employee, people will not compete with you. This is why those percentages matter. If you make it cheaper and nicer to stay than leave, you never have a problem.

100% agree. I’ve had the same admin, tech, and counselor for 5+ years. I pay above the going rate (& bonuses) bc I know the value of quality work. They all have proven over time to be loyal and have my back, & I do the same.

 

[cara susanna]

I feel like this is going to get overturned because the courts can't let us have nice things, but here's hoping.

 

[WisNeuro]

I feel like this is going to get overturned because the courts can't let us have nice things, but here's hoping.

If it's overturned, it's procedural vs. merit-based. Doesn't change things for me, personally, my state has already made non-competes effectively kaput.

 

[msc545]

There is one advantage to non-competes that nobody has mentioned yet: The presence of one of these in a contract you are considering entering into is a giant red flag telling you "don't do this". This is particularly true in states where NC's are prohibited and the writers of the contract have gone ahead and written it that way regardless, presumably to intimidate people.

 

[clausewitz2]

There is one advantage to non-competes that nobody has mentioned yet: The presence of one of these in a contract you are considering entering into is a giant red flag telling you "don't do this". This is particularly true in states where NC's are prohibited and the writers of the contract have gone ahead and written it that way regardless, presumably to intimidate people.

Or because they copied and pasted most of the contract from a sample contract from a website without understanding what the terms entailed. A different kind of red flag.

 

[Sanman]

There is one advantage to non-competes that nobody has mentioned yet: The presence of one of these in a contract you are considering entering into is a giant red flag telling you "don't do this". This is particularly true in states where NC's are prohibited and the writers of the contract have gone ahead and written it that way regardless, presumably to intimidate people.

Eh, yes and no. It is usually a certain, rather greedy type, that includes an unfair non-compete clause. That said, plenty of folks with terrible or no contract in this field that simply don't know how to run a business. You don't want either one as a boss necessarily.

 

[deleted1129370]

Im glad for non-competes. I purposefully structure my contracts that do not have this included.

 

[R. Matey]

Expect court challenges to stay this decision for at least a bit beyond it's initial effectiveness in 120 days.

That was fast.

https://www.reuters.com/legal/us-judge-blocks-biden-administration-ban-worker-noncompete-agreements-2024-07-03/

 

[msc545]

That was fast.

https://www.reuters.com/legal/us-judge-blocks-biden-administration-ban-worker-noncompete-agreements-2024-07-03/

Texas courts always favor businesses over individuals. No surprise here.

 

[WisNeuro]

That was fast.

https://www.reuters.com/legal/us-judge-blocks-biden-administration-ban-worker-noncompete-agreements-2024-07-03/

We knew this was going to happen from the start. Interesting to see how the Chevron ruling will affect this.

 

[R. Matey]

We knew this was going to happen from the start. Interesting to see how the Chevron ruling will affect this.

The decision cites the recent Chevron overturn decision (can't remember the name of the case), but it does remain to be seen if they will be able to enforce the ban ultimately since it seems SCOTUS wants Congress to write specific rules for everything now.