Federal authorities want to end non-competition of part-time doctors in hospitals

New York’s Mount Sinai Health System is forcing part-time doctors to sign employment contracts that violate their labor rights, according to a June 2024 complaint filed by the National Labor Relations Board (NLRB).

The complaint stems from no-poaching and confidentiality clauses in the agreements required as a condition of employment, NLRB officials alleged.

The contracts stipulate that for one year after termination, part-time doctors cannot recruit, solicit or induce the termination of employment of any hospital system employee or independent contractor, according to a copy of the terms included in the NLRB’s June 18 complaint.

In demanding the agreements, NLRB officials said Mount Sinai is “interfering with, restricting, and coercing employees” in violation of the National Labor Relations Act. The health care system’s “unfair labor practices” affect commerce as defined by the law, the NLRB said. The law prohibits employers from interfering with or obstructing commerce or the free flow of trade.

Mount Sinai did not respond to requests for comment.

The NLRB’s complaint follows a landmark decision by the Federal Trade Commission (FTC) to ban non-compete agreements nationwide. In April 2024, the FTC voted to ban indefinite non-compete agreements in an effort to protect workers.

“Non-compete clauses keep wages low, stifle new ideas, and rob the American economy of dynamism, including the more than 8,500 new startups that would be created each year if non-compete clauses were banned,” FTC Chairwoman Lina M. Khan said in a statement. “The FTC’s final rule banning non-compete clauses will ensure that Americans have the freedom to seek a new job, start a new business, or bring a new idea to market.”

Since then, business groups and agencies have filed lawsuits challenging the ban, including the U.S. Chamber of Commerce. The Chamber and other business groups argue that noncompete agreements are important for companies to protect trade secrets, safeguard hiring investments and conceal confidential information. The lawsuits are ongoing.

Doctor sounds the alarm

It was an anonymous doctor who alerted the NLRB to the terms of the contract in November 2023. The doctor was required to sign the hospital system’s agreement for part-time physicians. The complaint does not specify whether the employee is still employed by the hospital system.

To remedy the alleged unfair labor practices, the NLRB is seeking an order requiring the health system to rescind the terms of the contract, cease all enforcement actions against current or former employees, and compensate all employees who have suffered financial losses related to the terms of the contract.

The charge against Mount Sinai is part of a growing number of complaints filed with the NLRB alleging unfair labor practices. In the first six months of fiscal year 2024, unfair labor practice charges filed in NLRB field offices increased 7%, from 9,612 in 2023 to 10,278 in 2024, according to a news release.

The NLRB, meanwhile, has taken action against anticompetitive labor practices and confidentiality provisions that prevent employees from speaking out.

In a February 2023 decision, for example, the NLRB found that an employer violated the National Labor Relations Act by offering severance agreements to workers that included restrictive confidentiality and non-disparagement clauses. In 2022, the NLRB and the Federal Trade Commission entered into a partnership to more broadly combat unfair, anticompetitive, and deceptive business practices.

“Non-compete clauses have a reasonable tendency to deter employees from exercising their Section 7 rights when the provisions could reasonably be interpreted by employees as denying them the opportunity to leave or change jobs by cutting off their access to other employment opportunities for which they are qualified,” NLRB general counsel Jennifer Abruzzo said in a 2023 statement.

Abruzzo stressed in a note that the NLR law commits to taking an interagency approach to restrictions on the exercise of employee rights, “including limits on workers’ job mobility, information sharing and referrals to other agencies.”

Mount Sinai Health System must respond to the NLRB complaint by July 16, and an administrative judge is scheduled to hear the case on Sept. 24.

Alicia Gallegos is a freelance healthcare journalist based in the Midwest.