Last week, the Federal Trade Commission (FTC) issued a final rule that would ban nearly all noncompete agreements among for-profit employers and a small subset of nonprofits as well. In healthcare, it represents a significant shift in employment and contractual agreements, allowing clinicians to switch jobs and work for rival providers without limitations. Rules are set to take effect in 4 months. The American Medical Association estimates as many as 45% of physicians work under noncompete contracts, and it has been in favor of outlawing them. Advocates say allowing clinicians to move around could help solve the physician shortage in many markets. Separately, the American Hospital Association, other healthcare organizations, and many legal experts say FTC does not have the authority to regulate this aspect of commerce.Â
Here’s the forecast: Many legal experts are confident that the rule is wide open to challenge in the courts. The rule is as broad as it is confusing, leaving many predicting that it soon will be tied up in legal action following a temporary injunction.