Is This The End Of Non-Competes? Hospitals, Physicians, Pharmaceutical And Medical Device Manufacturers Need To Know
Highlights
The FTC has proposed a new federal rule that would ban all non-compete clauses, except for in a few limited exceptions when selling a business, and require companies to rescind any existing non-compete agreements at the time of the rule’s effective compliance date
The rule would apply to all businesses and professions, including healthcare providers such as hospitals and pharmaceutical and medical supply companies. Healthcare is an industry that has relied heavily on non-compete agreements, and should the proposed rule be finalized, it would have a significant impact for physicians and those companies that employ physicians
The proposed rule will soon be published in the Federal Register, triggering a 60-day public comment period. Once a final rule is published, it will become effective 60 days after publication, and compliance is mandatory 180 days after publication
As discussed in more detail here, the Federal Trade Commission (FTC) proposed a new federal rule that would ban all non-compete clauses, except for in a few limited exceptions when selling a business. The proposed rule would also require companies to rescind any existing non-compete agreements at the time of the rule’s effective compliance date. The new proposed rule is broad and would apply to all businesses and professions, including healthcare providers such as hospitals and pharmaceutical and medical supply companies. Healthcare is an industry that has relied heavily on non-compete agreements, especially in hospitals and medical group practices. It is very common for physicians to be bound by non-compete clauses in employment agreements. Should the proposed rule be finalized, it would have a significant impact for physicians and those companies that employ physicians.
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