TMA Analyzes FTC Proposed Ban on Noncompetes
By Amy Lynn Sorrel

The interplay between federal and state efforts to ban noncompete agreements remains unclear as Texas Medical Association experts analyze a proposed Federal Trade Commission (FTC) rule on the matter. 

Through a proposed rule released in January, FTC seeks to ban employers from imposing or maintaining noncompetes, saying in a news release that the practice is widely and unfairly used “for workers across industries and job levels, from hairstylists and warehouse workers to doctors and business executives. “ 

“In many cases, employers use their outsized bargaining power to coerce workers into signing these contracts. Noncompetes harm competition in U.S. labor markets by blocking workers from pursuing better opportunities and by preventing employers from hiring the best available talent,” FTC officials said. 

TMA is evaluating the proposal. FTC extended the deadline to submit comments from March 20 to April 19, after dozens of business organizations – including some in the health care industry like the American Hospital Association – had asked for an extension of the 60-day comment period. 

TMA also continues to evaluate the potential impact of such a rule on Texas, let alone health care, with several state lawmakers questioning the use of noncompetes in the health care realm and looking to proffer legislation this session to curb them. Nothing in the federal proposal precludes the Texas Legislature from pursuing a state bill. 

The heavily negotiated, physician-specific provisions of Texas’ current law have been in place since 1999 and were last amended in 2009. The current compromise on physician noncompetes allows them if certain statutory requirements are met, including providing a buy-out clause.  

Over the past decade, however, a growing number of Texas physicians have opted for employment – and with it, noncompetes, which some say have grown onerous. 

TMA will work with state lawmakers to try to ensure a fair balance for employed and employer physicians alike.  

The American Medical Association plans to submit comments to FTC and in a statement said, “While the AMA’s membership has diverse perspectives on noncompetes – with some members in an employer/practice ownership role and some in an employee role – AMA ethics policy opposes unreasonable noncompetes. Many states have enacted negotiated health care-specific noncompete statutes that take into account their unique health care markets and that balance the competing stakeholder interests. The balanced approach of these states must be considered against a proposed universal federal ban on all noncompete agreements.” 

Last Updated On

March 09, 2023

Originally Published On

February 13, 2023

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Amy Lynn Sorrel

Associate Vice President, Editorial Strategy & Programming
Division of Communications and Marketing

(512) 370-1384
Amy Sorrel

Amy Lynn Sorrel has covered health care policy for nearly 20 years. She got her start in Chicago after earning her master’s degree in journalism from Northwestern University and went on to cover health care as an award-winning writer for the American Medical Association, and as an associate editor and managing editor at TMA. Amy is also passionate about health in general as a cancer survivor, avid athlete, traveler, and cook. She grew up in California and now lives in Austin with her Aggie husband and daughter.

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