What a Non-Compete Ban Means for Physicians
Non-compete agreements amongst physicians has long been a topic that raises strong opinions. On the one hand, non-competes can create a real problem for physicians looking to leave their current role. On the other hand, a ban does pose implications for the value of a practice in a buy-out and other economic issues that may not be as obvious up front.
In January, the Federal Trade Commission (FTC) proposed a rule that would keep employees free from non-compete contracts. The rule would apply to full-time employees and independent contractors, both paid and unpaid.
The non-compete rule—on which the FTC is accepting public comments until March 10—would impact nearly every job position in the United States, including physicians and medical staff.
Health systems often impose non-compete contracts on physicians to prohibit them from leaving to start a new practice, or following fellow physicians who leave to start their own practice, according to a January 12, 2023 report from Medscape.
Becker’s ASC Review did a nice job showing the balance of the argument in a January post. As you can see from the article, the arguments are not black and white. While the ban may seem like a no-brainer to anyone ever wrapped up with a non-compete, we need to be careful of the law of unintended consequences.