The Let’s Talk Compliance partnership between PYA and Foley & Lardner continues with a new podcast in the Let’s Talk Compliance series. The podcast, “What the July 3rd Ruling on FTC Non-Compete Ban Means for the Health Care Industry,” was posted on July 22, 2024.
Jana Kolarik, a Foley Partner, and co-host Angie Caldwell, PYA Consulting Principal and Tampa Managing Principal, introduce the episode, featuring Ben Dryden, Vice Chair of Foley’s Antitrust & Competition Practice Group, and David McMillan, PYA’s Managing Principal of Consulting and Chief Financial Officer.
Dryden and McMillan discuss the July 3 preliminary court ruling on the Federal Trade Commission’s (FTC) recent decision to ban employee non-compete agreements, what the ruling means for the healthcare industry, and potential next steps in the case.
On April 23, 2024, the FTC adopted a regulation that bans virtually all employee non-compete agreements or clauses, with some exceptions, as unfair methods of competition effective Sept. 4, 2024. Lawsuits were filed to request an injunction, and on July 3, a district court made a preliminary ruling.
In the ruling, “the judge said the FTC just does not have substantive rulemaking authority,” Dryden says, “[and] that ban is likely to be arbitrary and capricious.” The judge ruled only the plaintiff, the U.S. Chamber of Commerce, was protected from the FTC’s ban; the court’s order does not apply to any other company in the U.S. Following the ruling, the Chamber requested the court broaden the ruling to make it apply to all U.S. companies. A final decision from the court will come on or before August 30.
Dryden clarifies the ruling would not impact non-profit healthcare systems, as they fall outside FTC jurisdiction in these matters; although, any for-profit entity—including staffing companies—under the healthcare system’s non-profit umbrella would likely be subject to compliance with the ban.
“I unfortunately think businesses need to assume there’s going to be some holes in the ultimate order the court adopts,” Dryden says. “We can’t assume this Rule is going to be broadly invalidated.” Dryden and McMillan offer tips for businesses to prepare for the possibility the ban will remain in effect for them.
The Let’s Talk Compliance podcast series is for healthcare leaders and compliance professionals, as well as providers, suppliers, vendors, and others in the healthcare industry. In each episode, a Foley & Lardner attorney and a PYA advisor discuss a trending compliance topic and address questions they hear most often from clients.
The podcast is part of Foley & Lardner’s Health Care Law Today series. Listeners can subscribe to both series on Apple Podcasts, Spotify, or their preferred podcast app. All episodes of Let’s Talk Compliance also can be found on the PYA website.
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