FTC Expected to Vote on Banning Noncompete Clauses

Noncompete clauses may become a thing of the past as the Federal Trade Commission (FTC) is expected to vote on its proposal to ban noncompete language in employment contracts in April of 2024.

The FTC first proposed the rule to ban noncompete clauses back in January, resulting in 27,000 comments during the initial comment period. The agency estimates this could increase wages by nearly $300 billion per year and reduce healthcare spending by $148 billion.

Currently, an estimated 18% of U.S. workers are covered by noncompete clauses. While data is limited for the total number of physicians included in this number, a 2018 study found 45% of primary care physicians in group practices have noncompete agreements.

The American Hospital Association and the U.S. Chamber of Commerce argue noncompete clauses make it difficult for employers to retain workers, but Roll Call reported physicians claim these types of contracts contribute to burnout, force them to leave their communities when seeking new jobs and make it difficult to recruit physicians locally.

California, Delaware, Massachusetts, New Hampshire and Rhode Island have already banned physician noncompetes.