Hospitals want FTC's noncompete rule vacated nationwide
The American Hospital Association and Federation of American Hospitals on Feb. 11 filed a friend-of-the-court brief urging an appellate court to vacate nationwide the Federal Trade Commission's noncompete rule. A Texas federal judge in August issued a nationwide injunction blocking the implementation of the FTC's noncompete ban, which would have invalidated tens of millions of existing noncompete agreements and prohibited employers from entering into or attempting to enforce any new noncompetes. "The commission's treatment of the hospital labor market underscores why the final rule was not supported by relevant evidence, lacked a reasonable explanation and did not consider proffered alternatives," the hospital groups wrote in their friend-of-the-court brief. "Both the AHA and FAH explained to the commission that the rule could create significant distortions in the healthcare labor market because the commission lacks the statutory authority to apply the rule to nonprofit hospitals." The noncompete ban would have had significant implications for the healthcare industry and was described by FAH President and CEO Chip Kahn as a "double whammy" against hospitals. "The ban makes it more difficult to recruit and retain caregivers to care for patients, while at the same time creating an anticompetitive, unlevel playing field between taxpaying and tax-exempt hospitals — a result the FTC rule precisely intended to prevent," Mr. Kahn said in an April statement shared with Becker's. "In a time of constant healthcare workforce shortages, the FTC's vote today threatens access to high-quality care for millions of patients." The AHA had urged the FTC to withdraw the noncompete ban or exempt the hospital field amid staffing shortages that are projected to affect hospitals and health systems far beyond the pandemic. It also argued that the agency erred by seeking to create a one-size-fits-all rule" for employees across all industries.
The American Hospital Association and Federation of American Hospitals on Feb. 11 filed a friend-of-the-court brief urging an appellate court to vacate nationwide the Federal Trade Commission's noncompete rule.
A Texas federal judge in August issued a nationwide injunction blocking the implementation of the FTC's noncompete ban, which would have invalidated tens of millions of existing noncompete agreements and prohibited employers from entering into or attempting to enforce any new noncompetes.
"The commission's treatment of the hospital labor market underscores why the final rule was not supported by relevant evidence, lacked a reasonable explanation and did not consider proffered alternatives," the hospital groups wrote in their friend-of-the-court brief. "Both the AHA and FAH explained to the commission that the rule could create significant distortions in the healthcare labor market because the commission lacks the statutory authority to apply the rule to nonprofit hospitals."
The noncompete ban would have had significant implications for the healthcare industry and was described by FAH President and CEO Chip Kahn as a "double whammy" against hospitals.
"The ban makes it more difficult to recruit and retain caregivers to care for patients, while at the same time creating an anticompetitive, unlevel playing field between taxpaying and tax-exempt hospitals — a result the FTC rule precisely intended to prevent," Mr. Kahn said in an April statement shared with Becker's. "In a time of constant healthcare workforce shortages, the FTC's vote today threatens access to high-quality care for millions of patients."
The AHA had urged the FTC to withdraw the noncompete ban or exempt the hospital field amid staffing shortages that are projected to affect hospitals and health systems far beyond the pandemic. It also argued that the agency erred by seeking to create a one-size-fits-all rule" for employees across all industries.
