The FTC warns health care companies for non -competitive restrictive contracts

Diving brief:

• The Federal Trade Commission urges major health employers and personnel companies to examine their employment agreements to eliminate non-concurrent restrictive clauses.
• On Wednesday, the president of the FTC, Andrew Ferguson, sent letters to an unspecified number of health care companies warning them that regulators will apply the law against unjust or anti-competitive non-concurrents. The letter stresses that the beneficiaries do not suspect any illegal conduct.
• This is part of a greater philosophical change to the FTC with regard to non-concurrents, because the agency is moving away from the total prohibition adopted by the Biden administration to a targeted application strategy. The new FTC position is probably a relief for hospitals and other employers, who had highly pressure against the ban.

Diving insight:

The health care industry is generally based on non-competition agreements, especially since a growing number of doctors are employed by hospitals and other companies. The American Medical Association estimates that non -competitive clauses affect between 37% and 45% of doctors.

But the frequency of arrangements does not mean that they are popular: doctors have testified to antitrust regulators that non-concurrents keep them locked up, unable to seek another job even if they are unhappy with their current situation.

Non-concurrents can also increase medical prices, while removing wages for workers and inhibiting the creation of new businesses, according to previous research from the FTC.

The FTC has the power to pursue too large or potentially anti-competitive non-confidence. But under President Donald Trump, the agency fell from the aggressive position of the Biden administration, which sought to completely eliminate non-concrete for non-executive workers.

Last week, the FTC commissioners voted to stop defending the national ban, that the Tenas and Florida courts had already blocked. (Another court in Pennsylvania had allowed him to continue).

Following the dispute, the prohibition has never entered into force. With the FTC’s decision to take a step back after his calls, he will probably never do – at least not during this administration. Instead, the FTC plans to pursue particularly expensive non-concrete.

Last week, the agency asked the public information that could shed light on future application measures. The FTC specifically asked commentators to call employers with problematic non-concurrents which can be illegal, in particular for “market players in the health care sector”.

And now, Ferguson follows his promise earlier this month to send letters to companies in the industries “in the grip of stoves of non-competitive action”, such as health care.

Ferguson’s letter asks the beneficiaries to “carry out a full examination [of] Employment agreements – including non -confidence or other restrictive clauses – to ensure that they comply with applicable laws and are appropriately adapted to the circumstances. »»

“If your business currently uses non-concurrents which are unfair or anti-competitive under the FTC law, I strongly encourage you to interrupt them immediately and inform the relevant employees of disintegrality,” wrote Ferguson.

There is a gray area on what makes an illegal non-confidence, which can make conformity delicate. However, the recent actions of the FTC against a company cremation company gives some clues on the regulatory bar for the application. Earlier this month, the FTC filed a complaint against Gateway Services after finding contracts to almost all of its employees prohibiting them from working in the animal cremation industry for a year after leaving the company.

“The application against unreasonable non-competition agreements remains an absolute priority for the Federal Trade Commission,” Kelse Moen, assistant director of the FTC competition office on Wednesday. “We strongly encourage all employers – not just those who receive letters today – to review their contracts closely.”

The FTC did not answer questions about what companies had received the letters or why they were selected.