Biden to crack down on noncompete agreements through an executive order

Laura Dyrda - Print  |

President Joe Biden aims to stymie employers' ability to suppress competition for employees with a potential new executive order, according to The Hill.

Many physicians have noncompete agreements in their employment contracts, preventing them from practicing in the same geographic region if they leave their job. There are more than 30 million people in the U.S. affected by noncompete agreements, according to Jen Psaki, White House press secretary, who spoke at a July 7 press briefing. President Biden's executive order will encourage the Federal Trade Commission to limit or ban noncompete agreements.

In April, a Medscape poll of 558 physicians showed 90 percent were currently or previously bound by noncompete clauses, and 23 percent had unsuccessfully tried to negotiate out of the agreement. Of those who left their jobs while under a noncompete agreement, 42 percent were able to work in a similar position outside of the noncompete restrictions while 6 percent found a different type of work.

The executive order could affect ongoing and future challenges for physicians who aim to exit hospital or ASC contracts. For example, an appellate court decided July 6 that Houston-based Richard Francis, MD, breached his noncompete clause with Houston Metro Ortho and Spine Surgery Center in 2014 when he began taking cases to another center. The decision reversed a previous ruling that awarded $9 million to Dr. Francis after the ASC terminated his ownership.

In another recent high-profile case, Cincinnati-based TriHealth sued 18 gastroenterologists in March to enforce their noncompete clauses after the physicians opted to exit their contracts early. 

 

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