American Hospitals Opposing Noncompete Ban On Labour Deals


The American Hospital Association has been urging the Federal Trade Commission to abandon one of the sweeping proposals that looks to place a ban on noncompete arrangements when it comes to labour contracts and also invalidate the ones that have been in place. The hospital lobby has already submitted its comments on March 1 in response to the rules that have been proposed by the FTC in early 2023.

According to the AHA, the proposal goes on to create a one-size-fits-all rule when it comes to all employees, regardless of the industry, and thereby lacks variation. The proposal is apparently going to transform the healthcare labour spectrum, especially when it comes to physicians as well as senior executives.

It does not come as a surprise when we say that the pandemic has worsened the already existing staffing shortages, and it is now time to reverse the healthcare labour market with a rule such as this, as mentioned by the AHA in its report. Apparently, the AHA has been pushing the FTC to exempt the hospital vertical from the proposed rule.

According to the AHA, at the very least, this rule must exempt the highly skilled and compensated workforce, such as senior executives and physicians, arguing that some research shows that noncompete arrangements can be beneficial in such instances.

It is well to be noted that the hospital sector goes on to employ thousands with varied skill sets, from surgeons to food service workers, as well as translators. The fact remains that some employees happen to be highly compensated while others are low-wage earners. As per the AHA, it is indeed unfair to treat a broad range of employees all the same under the sweeping rule.

As per the group, this would at once invalidate millions of dollars when it comes to existing contracts and, at the same time, worsen the problem as far as healthcare labour shortages are concerned, especially for those in medically underserved regions such as rural communities. Besides this, the AHA also argued that there is a lack of authority from the FTC when it comes to issuing such a rule in the first place since it does not hold the statutory rank. Experts opine that the proposal by the FTC is all set to alter the healthcare industry, which more often than not relies on restrictive contracts so as to retain the physicians as well as the patients they go on to treat, while the non-profit hospitals, which are a large chunk of the sector, are most likely to be exempted from the proposal.