- The Federal Trade Commission will give the public an additional 30 days to comment on a sweeping proposal to ban employers from imposing noncompete contracts on their workers.
- The agency said interested parties have requested an extension, though acknowledged others oppose the delay. The public now has until April 19 to comment on the proposed rule, the FTC said on Monday.
- FTC Commissioner Christine Wilson said in a separate statement that she would have supported an even longer extension since the proposal is “a departure from hundreds of years of precedent.”
The FTC’s proposal threatens to dramatically alter the healthcare sector, which frequently relies on restrictive covenants to retain physicians — and the patients they treat — by restricting them from going to work for rival firms.
The American Hospital Association has urged the agency to abandon its noncompete rule, which would bar future restrictive covenants and invalidate existing ones.
The COVID-19 pandemic has exacerbated existing staffing shortages and “now is not the time to upend the health care labor markets with a rule like this,” the hospital lobby said in written comments submitted in response to the rule.
At the very least, skilled and highly compensated workers like physicians and senior executives should be exempt from the rule, the AHA said in its written comments.
So far, the proposal has generated more than 8,800 comments, according to public records.
The rule is likely to be applied unevenly across the healthcare industry, critics have said.
Nonprofit hospitals, which make up roughly half of all hospitals in the U.S., are likely to be exempt from the proposed rule to bar noncompetes.
The FTC wants to ban restrictive covenants because it claims they depress worker wages and limit competition.
“Unless you’re willing to move hundreds of miles away or take a huge pay cut to restart your career from scratch, a noncompete can effectively lock you into a job. That’s a clear restriction of individual liberty,” FTC Chair Lina Khan previously wrote in an op-ed for The New York Times.