Several states across the U.S. have begun to reexamine their noncompete laws.
According to a survey from NORC at the University of Chicago, 60% of employed physicians were required to sign a noncompete when starting their jobs.
The trouble with noncompetes lies in the barrier they create that prevents physicians who leave their current position from practicing at other local facilities. This has already caused problems in states like Florida that are already facing a shortage of physicians.
In January, the Federal Trade Commission proposed a rule that would ban noncompetes nationwide. About 87% of physicians support the FTC's proposal to ban noncompetes, according to a March poll of 4,853 practicing physicians conducted by Doximity. However, the rule has yet to be approved.
"Noncompetes were more important when physician private practices were the norm," Marsha Haley, MD, clinical assistant professor of radiation oncology at the University of Pittsburgh, told Becker's. "The purpose was to prevent a physician from opening another nearby practice to directly compete with the original practice. Now that most physicians are employed by large health systems, we need to rethink the concept of noncompetes. Many large health systems have a footprint that expands several states. If a physician is let go or leaves the practice, this requires the physician to move a long distance to meet the noncompete clause. Given the size and vertical integration of health systems, they are in no danger of losing a significant number of patients to the departing physician. The physician, however, is now required to move a great distance away from children's schools and extended family to make a living. To make noncompetes more fair and applicable to the current medical environment, they could potentially be tailored to smaller private practices but not be applicable to large health systems or private equity companies."
Some states, including California, Connecticut, Florida, Indiana, Maryland, New Jersey, New York and Wisconsin, have taken matters into their own hands.
These states have taken action against noncompetes by amending their noncompete laws for physicians or employees in general or have added certain restrictions.
Though the FTC's proposed nationwide noncompete ban has yet to come into fruition, the culture of noncompetes is definitely shifting.