The Federal Trade Commission (FTC) has taken on non-compete clauses and requested public comments on this issue for upcoming hearings.
In health care, the majority of physicians have become employees, and hospitals and corporate entities are buying out most practices. As we face a critical and accelerating shortage of physicians and other health care workers, non-compete clauses increasingly limit physician movements within health care, profoundly decrease satisfaction, increase burnout, and further contribute to limitations in patient access.
One of the least discussed but more destructive aspects of non-compete clauses is that of “family and social disruption.” Many might say that family/social conditions are not part of workplace activities, and it’s up to the employee to “make it work.” But, this issue can present one of the most severe damages produced by non-compete clauses – and in many cases, knowingly perpetuated by the employing organization.
For physicians, who face fewer local employment availabilities than those with other more generalized skillsets, non-compete clauses can be an especially damaging factor in their work, home, and social lives.
Impact on the family
By early or mid-career, many of us have a spouse, possibly several K-12 children, family relatives, and social circle that has developed around your locale. Your spouse may have a job to help support ever-rising family living costs or enjoys working and may find that job rewarding and pleasing! Your children are probably enrolled in local schools, have a network of friends and activities and may be very happy. You may be comfortable in your social circle and may have relatives that you chose to live near or have moved to be closer to you and who support/assist in family activities, time away, vacations, etc. You have probably purchased a home and have a mortgage payment.
A non-compete clause that prevents you from working at the few other locally-available health care options means that you will have to pull up your roots, sell your home and move to a different city or possibly a different state. Your spouse, children, social circle and the safety net of relatives will all be disrupted or lost.
You face the financial and social demands and uncertainty of uprooting, moving to a new locale (if in a different state, obtaining a new medical license is a time-consuming and expensive necessity), finding new employment for both breadwinners, new schools, new social circles, new support systems, new home purchases or rental. This can be an especially disruptive situation for physicians who have not yet completed the pay-out of their average $250,000-$500,000+ in medical training debt!
Health care employer companies are also very aware of this “family-social factor.” Historically, many facilities/corporate entities have been much more eager to employ physicians with families, especially those with local community ties.
In states that support non-competes or have “semi-support” laws, “deep pocket” facilities, most of which have groups of on-salary law teams, are willing to fight it out with threatened court actions to slow down your exit.
Most employees do not have the time, stamina, and financial resources for long legal battles. Thus, the initial answer for many is to stay and suffer. This, in turn, provides license to the facility/corporation to further abuse the workplace.
For the health care workers that I have been asked to advise who find themselves in this situation. Many end up choosing initially to just tough it out in an unhappy workplace, thus becoming resentful workers. Or, increasingly, over time, they are finding a local or virtual non-clinical or out-of-medicine job – not covered by the non-compete, thereby increasing the losses to the health care workforce and to the patients they have been serving! I recently shared the sad story of how a non-compete clause caused a successful physician in mid-career to have to leave clinical practice when his workplace became too abusive.
Are there solutions?
Federal: We hope the FTC will develop policies concerning non-compete clauses that will improve workplace satisfaction and provide encouragement to physicians (and other health care workers) to remain in clinical practice.
State: A few states, due in part to increasing shortages in physicians and other health care workers, have attempted to somewhat limit non-competes in health care. But the majority still have full non-compete clauses for health care workers on their books.
Individual: For individual physicians who are signing new or updated employment contracts, you should consider crossing out any non-compete contract language before signing (disclaimer: have your legal team review and discuss risks) and then see if your employer accepts your terms. After all, with the severe physician shortage, it is an evolving seller’s market, and many facilities are desperate to make new hires!
We have already seen increased physician departures from clinical health care due to non-compete regulations. This is at a time when there is already a critical shortage of practicing physicians in the U.S., with some estimates noting a shortfall of between 54,000 and 139,000 physicians by 2033. On top of all this, health care is already ranked lowest of all U.S. workplaces for employee satisfaction.
Thus, without a fix in non-compete clause conditions that will improve workplace satisfaction and encourage physicians and other health care workers to want to remain in clinical practice, we anticipate further worsening in health care workplace burnout and dissatisfaction, leading to increasing exits of physicians and other health care workers out of the health care workplace, resulting in further acceleration of the already severe physician and health care worker shortage.
But, the end result will be further reductions in patient access to medical care.
Harry Severance is an emergency physician.