ACEP Responds to FTC’s Proposed Ban of Noncompete Clauses

On Jan. 5, the Federal Trade Commission released its proposed ban on noncompete clauses in employment contracts. Knowing this could potentially have a significant impact on emergency physicians, ACEP immediately started collecting firsthand perspectives from its members. ACEP’s advocacy team analyzed 75 responses to its questionnaire, looking for commonalities to inform its official response to the proposed ban.

In its response to the FTC, ACEP urged the Commission to finalize the proposed ban on noncompetes to help address the current anti-competitive conditions in the emergency medicine labor market, while also encouraging the agency to study how noncompetes are used in rural and underserved areas as a way to recruit and maintain a stable workforce. ACEP also raised concerns about the potential for unintended consequences should nonprofit health systems be exempt from a ban, as appears to be the case under the proposed rule’s structure.

These are just a few of the takeaways from ACEP’s survey results:

  • Three-quarters of emergency physicians who responded have had noncompete clauses in their contracts in the last five years.
  • Of respondents who have had a noncompete clause in their contract in the last five years:
    • 10 out of 12 said that the noncompete clause had some impact on their employment search, and more than two-thirds said that the impact was generally negative.
    • More than half said that they have felt limited geographically and/or were unable to seek a local job as per their noncompete clause.
  • More than a third of total of all respondents have had to move away to find a job because of the limitations of their noncompete clause.
  • Responses from emergency physician employers indicated that more than half thought a ban on noncompete clauses would have a positive effect on their practice.
    • Slightly more than one-third of employers said a ban would have minimal or no effect on their practice.
    • 10 percent said that a ban would have a negative effect on their practice.

The member stories collected by ACEP help demonstrate that restrictive covenants have an impact beyond economics. Contract limitations can impact physician wellness and contribute to burnout.

“My non-compete is geographically quite broad, and basically means that if I leave my current employer, I will have to move my special needs kids out of the school system we moved here for.”

“It has caused physicians in my group to have prospective employees decline to work with us as their non-compete clause from a previous job prevents them from working in our sites, or to have new employees limited in what sites they can cover due to distance from previous jobs.”