The Federation of American Hospitals and the American Hospital Association joined a court case with 230 other organizations asking a Texas judge to vacate the Federal Trade Commission (FTC)’s noncompete ban.
While the FTC’s rule is slotted to take effect on September 4th, these hospital associations argue in their amicus brief that the ban should not be put into place until the court cases surrounding the rule are settled. The brief also argues that the FTC lacks the authority to implement this rule, and that if the agency is allowed to move forward with the ban, the healthcare industry should be exempt. The amicus brief follows two new and diverging judgements in the ongoing court cases—with one ruling supporting the rule and the other temporarily staying the rule. Read more here and here.
The diverging court decisions on the noncompete ban may indicate this rule will wind up before the Supreme Court.
While the lawsuit in the Pennsylvania court system indicated the FTC does have the authority to implement the rule, the Texas court case found the opposite to be true and issued a preliminary injunction that is largely expected to be finalized by August 30th, setting the case up for an appeals process that may go all the way to the Supreme Court. The trade associations noted that the ban would not be enforceable for nonprofit hospitals but that impacts on for-profit hospitals and for-profit business partners of nonprofit hospitals could have significant impacts on the industry as a whole.