The Federal Trade Commission on Tuesday voted to ban noncompete agreements, which bar employees from leaving their jobs to work for competitors. Business groups then filed lawsuits to block the FTC’s move.
At least one local business would like to see those efforts succeed.
“Vancouver Clinic invests significant time and resources to support our physicians’ professional development to ensure their success in caring for patients,” Dr. Alfred Seekamp, chief medical officer at the Vancouver Clinic, said in a statement.
The ban could impede the clinic’s ability to continue to make such investments, he said.
Health care is one of the industries that tend to rely on noncompete clauses in contracts, which is also common practice in the technology, sales and finance sectors. The FTC estimates that 1 in 5 U.S. workers is subject to noncompete agreements.
“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” FTC Chair Lina Khan said in a statement Tuesday.
The commission’s “final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market,” she added.
The U.S. Chamber of Commerce filed a lawsuit Wednesday in a U.S. District Court in Texas. The chamber questioned the commission’s authority to issue such rulings, calling the ban “a blatant power grab that will undermine American businesses’ ability to remain competitive.”
The state of Washington has already limited how often noncompete clauses can be used.
The Department of Labor & Industries requires an income threshold. Only employees making more than $120,559.99 per year can be subject to such a clause. Independent contractors must make at least $301,399.98 per year.
Seekamp said short-term noncompete clauses reflect the clinic’s long-term commitment to the company’s physicians and patients.
“As a physician-owned medical practice, our physicians are all invested in the long-term health and vitality of our practice,” he said. “The resulting stability helps ensure our patients have the best possible access and receive the highest-quality care.”
