The American Hospital Association is intensifying its efforts to challenge the Federal Trade Commission's non-compete ban from taking effect. On July 26, the AHA and the Federation of American Hospitals filed an amicus brief in a Texas federal court, urging the court to vacate the final rule.
In the brief, the AHA argues that the FTC failed to adequately address the concerns of stakeholders, including the potential for "significant, unintended, and anticompetitive distortions" in the healthcare labor market, and that the agency did not consider more narrowly tailored alternatives. The AHA has previously argued that any noncompete rule should exempt highly skilled, highly paid employees, including physicians and senior executives.
If implemented, the FTC's rule would prohibit employers from including contractual terms that prevent them from taking new jobs with certain companies after their current contract ends. The ban was set to take effect Sept. 4, but on July 3, the Texas court approved a preliminary injunction, preventing the rule from being enforced while the court reviews whether the agency has the authority to issue the ban.
The court is expected to issue a final ruling on the merits of the challenge by the end of August.
"The FTC stands by our clear authority, supported by statute and precedent, to issue this rule," Douglas Farrar, director of the FTC's office of public affairs, previously said in a statement to Becker's. "We will keep fighting to free hardworking Americans from unlawful noncompetes, which reduce innovation, inhibit economic growth, trap workers, and undermine Americans' economic liberty."