Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC comments on Pennsylvania bill restricting non-compete clauses for health care practitioners, (Jun 4, 2024)

By Elizabeth C. Pope, J.D.

The Pennsylvania bill restricts the use of noncompetes for certain health are practitioners.

Hannah Garden-Monheit, Director of the FTC Office of Policy Planning, has written a letter to three Pennsylvania state legislators in acknowledgment that the ...

By Elizabeth C. Pope, J.D.

The Pennsylvania bill restricts the use of noncompetes for certain health are practitioners.

Hannah Garden-Monheit, Director of the FTC Office of Policy Planning, has written a letter to three Pennsylvania state legislators in acknowledgment that the Pennsylvania legislature is presently considering the Fair Contracting for Health Care Practitioners Act (HB 1633), a bill that, among other things, restricts the use of noncompetes for certain health care practitioners. The letter notes that the FTC has approved a final rule banning noncompete clauses. The letter highlights a number of the evidentiary findings underpinning the Commission’s new rule that Pennsylvania’s legislators “may find informative as you consider the bill.”

FTC rule. The FTC released its proposed final Non-Compete Clause Rule (16 CFR Part 910) on April 23. Under the rule, it would be an unfair method of competition under the Section 5 of the FTC Act for persons to enter into noncompete clauses with workers on or after the final rule’s effective date. The rule is anticipated to take effect September 4, 2024, 120 days after publication in the Federal Register (89 Fed. Reg. 38342 (May 7, 2024)).

The FTC letter. The FTC’s letter to Pennsylvania State Representative Dan Frankel and Pennsylvania State Senators Michele Brooks and Art Haywood highlighted for the three state lawmakers the FTC’s conclusions about noncompetes that could be informative for Pennsylvania lawmakers considering HB 1633:

Unpopular. Of the 26,000 comments the Commission received regarding its proposed final rule, approximately 25,000 favored a categorical ban. The letter noted that “many of the comments,” which are available for review on the FTC’s public docket at Regulations.gov, were from Pennsylvania workers, businesses, and health care practitioners.
Bad for workers. Based on what the letter described as “empirical research and public comments,” the Commission found that noncompetes are exploitative and coercive for all workers except for senior executives. Because noncompetes decrease mobility and competition in the labor market, they suppress wages for all workers, not just for workers who are subject to them. The Commission estimates that because of its new rule the average worker in Pennsylvania will earn $596 more per year.
Pervasive in health care. The Commission determined that noncompetes are pervasive in health care, with one study finding that 45% of physicians worked under a noncompete. Noncompetes increase healthcare costs, the Commission found.
State-based enforcement. The letter also noted how “state-based enforcement against noncompetes can be a potent force that supplements the federal rule.” State restrictions are important with regard to employers or activities that are outside the FTC jurisdiction—including certain healthcare non-profits. In addition, unlike the FTC Act, states’ noncompete laws may provide for a private right of action and/or monetary penalties.

News: Antitrust FederalTradeCommissionNews ConsumerProtection PennsylvaniaNews

Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC comments on Pennsylvania bill restricting non-compete clauses for health care practitioners, (Jun 4, 2024)

By Elizabeth C. Pope, J.D.

The Pennsylvania bill restricts the use of noncompetes for certain health are practitioners.

Hannah Garden-Monheit, Director of the FTC Office of Policy Planning, has written a letter to three Pennsylvania state legislators in acknowledgment that the ...

By Elizabeth C. Pope, J.D.

The Pennsylvania bill restricts the use of noncompetes for certain health are practitioners.

Unpopular. Of the 26,000 comments the Commission received regarding its proposed final rule, approximately 25,000 favored a categorical ban. The letter noted that “many of the comments,” which are available for review on the FTC’s public docket at Regulations.gov, were from Pennsylvania workers, businesses, and health care practitioners.
Bad for workers. Based on what the letter described as “empirical research and public comments,” the Commission found that noncompetes are exploitative and coercive for all workers except for senior executives. Because noncompetes decrease mobility and competition in the labor market, they suppress wages for all workers, not just for workers who are subject to them. The Commission estimates that because of its new rule the average worker in Pennsylvania will earn $596 more per year.
Pervasive in health care. The Commission determined that noncompetes are pervasive in health care, with one study finding that 45% of physicians worked under a noncompete. Noncompetes increase healthcare costs, the Commission found.
State-based enforcement. The letter also noted how “state-based enforcement against noncompetes can be a potent force that supplements the federal rule.” State restrictions are important with regard to employers or activities that are outside the FTC jurisdiction—including certain healthcare non-profits. In addition, unlike the FTC Act, states’ noncompete laws may provide for a private right of action and/or monetary penalties.

News: Antitrust FederalTradeCommissionNews ConsumerProtection PennsylvaniaNews