FTC Issues Ban on Non-Compete Arrangements

This week, the Federal Trade Commission (FTC) adopted a comprehensive ban on non-compete clauses in employment contracts with no exceptions for the health care industry. The new rule takes effect 120 days after publication in the Federal Register, but legal challenges are likely to stall implementation of all or part of the regulations.

The rule applies to all workers, with a limited exception for existing non-competes with senior executives — those with total annual compensation of at least $151,164 and who serve in a “policy making position.” Non-competes with senior executives can remain in force, but businesses may not include non-competes in new contracts issued to senior executives after the effective date of the rule.

The final rule does not limit or affect enforcement of State laws that restrict non-competes where State laws do not conflict with the final rule. In cases where State laws conflict with the final rule, the rule prevails.

The FTC does not have the authority to apply the rule to nonprofits. However, the FTC makes clear in the rule that not all entities claiming tax-exempt status as nonprofits fall outside its jurisdiction, which means that hospitals and other health care entities claiming tax-exempt status as nonprofits could still fall within final rule’s purview.

Once the rule takes effect, employers will be required to provide notice to workers with existing non-competes that they are no longer enforceable.

The U.S. Chamber of Commerce has already filed suit against the rule, and other challenges are expected. ASGE is following developments and will share information as it becomes available. 

About Gastrointestinal Endoscopy
Gastrointestinal endoscopic procedures allow the gastroenterologist to visually inspect the upper gastrointestinal tract (esophagus, stomach and duodenum) and the lower bowel (colon and rectum) through an endoscope, a thin, flexible device with a lighted end and a powerful lens system. Endoscopy has been a major advance in the treatment of gastrointestinal diseases. For example, the use of endoscopes allows the detection of ulcers, cancers, polyps and sites of internal bleeding. Through endoscopy, tissue samples (biopsies) may be obtained, areas of blockage can be opened and active bleeding can be stopped. Polyps in the colon can be removed, which has been shown to prevent colon cancer.

About the American Society for Gastrointestinal Endoscopy
Since its founding in 1941, the American Society for Gastrointestinal Endoscopy (ASGE) has been dedicated to advancing patient care and digestive health by promoting excellence and innovation in gastrointestinal endoscopy. ASGE, with almost 16,000 members worldwide, promotes the highest standards for endoscopic training and practice, fosters endoscopic research, recognizes distinguished contributions to endoscopy, and is the foremost resource for endoscopic education. Visit Asge.org and ValueOfColonoscopy.org for more information and to find a qualified doctor in your area.


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