ASA Calls for Smart, Targeted Approach to Unfair and Unreasonable Non-Compete Agreements

In comments to the Federal Trade Commission (FTC), the American Society of Anesthesiologists (ASA) called for states to develop and apply regulations that would outlaw unreasonable and egregious non-compete agreements. Citing shortcomings within the proposed rule, including whether the rule could apply to non-profit hospitals and facilities, ASA stated its support for state legislatures and regulatory bodies to issue smart, targeted regulations to address non-compete agreements.

In March, more than 300 anesthesiologists responded to an informal ASA survey on how non-competes affected their careers. A majority of respondents described how non-competes limited their career progression, affected their wages, and led many anesthesiologists to seek employment in locations far from their previous job. Other anesthesiologists suggested that non-compete agreements protected their groups from purchase or having to annually renegotiate their contact with hospitals and other facilities. ASA used these comments to describe the variety of non-compete clauses to the FTC, including how a one-size-fits-all approach to banning non-competes would fail to address the nuances of a complex health care system.

ASA offered the FTC and states considering non-compete regulation additional recommendations, such as:

• Reasonable non-compete agreements may allow for a transition period where an anesthesia group can identify and hire a new anesthesiologist while the departing anesthesiologist can find new employment, within a reasonable time in the same geographic location.
• Non-compete carve-outs must be tailored to address local circumstances, a patient’s care team, and the complexity of the current health care workforce environment. Non-compete carve-outs should not be based solely on occupation or salary.
• Anesthesiologists do not have a “book of business” and therefore, any state regulation on non-competes should take into consideration whether the physician has a “book of business” or may present as a competitor to existing employers or facilities.
• FTC and states should provide clear education to potential employees on state law and the rights of an employee when signing a non-compete agreement. States, likewise, should educate employers on appropriate business practices that align with state laws on non-compete agreements.

E-mail the ASA Department of Quality and Regulatory Affairs at [email protected] for more information.