NONCOMPETE POWER PLAY — The Federal Trade Commission is expected to vote tomorrow on issuing a rule that would prevent employers, including in the health care sector, from enforcing most noncompete agreements. The FTC has argued that such clauses stifle wages and innovation by making it harder for workers to change jobs and bring new ideas to other companies. The commission proposed the ban in January 2023 and received more than 26,000 comments from the public. FTC Chair Lina Khan has said freedom to change jobs is key to “economic liberty” and “a competitive, thriving economy.” Erin C. Fuse Brown, director of the Center for Law, Health & Society at Georgia State University, told Pulse that banning such agreements would have far-reaching consequences because most doctors don’t operate their own practices and are employed by other groups. “The FTC’s ban on noncompetes would loosen the grip that corporate employers have on their physicians," she said. John Carroll, a partner in the antitrust and competition practice group at Sheppard Mullin, said the most significant impact would be on the valuation of physician group transactions. The pushback: Hospitals have fought the proposal and are pushing for an exemption. The American Hospital Association has argued that the FTC doesn't have the authority to propose such a ban, and has said that doctors and senior executives "at the very least" should be excluded. “Even if the FTC had the legal authority ... now is not the time to upend the health care labor markets with a rule like this,” AHA wrote in comments to the commission, adding that the pandemic exacerbated worker shortages in the health care sector. The Federation of American Hospitals also opposed the proposed ban. The American Medical Group Association, with members including physician group practices, is at odds with the FTC proposal, saying noncompetes bolster a "team-based approach" to care, which can improve continuity of care. On the other side: The American Medical Association's House of Delegates voted to oppose noncompetes for doctors at for-profit and nonprofit hospitals, hospital systems or who are employed by staffing firms. The AMA has noted that some doctors who are employers and own physician practices may support "reasonable noncompetes," while employed physicians might support banning the clauses. Many doctors have argued that ending noncompetes would benefit patients and help balance the power between doctors and the powerful interests behind hospitals and large physician practices. What to watch for: The FTC is expected to vote to ban noncompetes, but it’s unclear whether the decision will include exemptions for health care workers. WELCOME TO MONDAY PULSE. AI is now being used to make coffee. Reach us and send us your tips, news and scoops at bleonard@politico.com or ccirruzzo@politico.com. Follow along @_BenLeonard_ and @ChelseaCirruzzo.
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