Erik W. Weibust, Member of the Firm in the Litigation & Business Disputes and Employment, Labor & Workforce Management practices, in the firm’s Boston office, was quoted in Bloomberg, in “Work Shift: Ultimate Loophole in Noncompete Agreements? Be a Lawyer,” by Matthew Boyle.
Following is an excerpt:
Noncompetes and the Law(yers)
On Jan. 5, Federal Trade Commission chief Lina Khan issued a sweeping proposal to ban non-compete agreements (NCAs), which block employees from leaving for a rival or opening a competing business, usually over a set period of time or inside a certain geographic area.
Noncompete agreements ensnare about 30 million Americans, suppressing wages and stifling innovation, the FTC argued, and can be particularly damaging when applied to low-wage workers. Take the infamous instance when sandwich chain Jimmy John’s prevented its workers from getting similar jobs anywhere near one of its 2,000 locations, which prompted outrage and probes by attorneys general in New York and Illinois that were settled in 2016.
That same year, the Obama administration urged states to ban most NCAs, and since then dozens of states have implemented some restrictions, usually in the form of wage thresholds (in Oregon, it’s $100,000). Others prohibit noncompetes for certain types of workers, like those in health care, a field where these restrictions are quite common. Many of the public comments in response to the FTC’s proposal are from health-care workers, including an obstetrician gynecologist who said NCAs for physicians were an “absolute abomination and as un-American as you can get.”
While some research has found that noncompetes for physicians can boost their earnings over time, state laws either on the books or under consideration show how unpopular they’ve become. Some physician NCAs can last up to two years, forcing them to travel more than 50 miles, or even leave the state, to find comparable work. That can exacerbate existing physician shortages, and discourage others from moving to certain areas. …
There is one profession, though, that remains unaffected by noncompetes: lawyers. Under the American Bar Association’s Model Rule 5.6, an attorney cannot draft or enter into a noncompete agreement that “restricts the right of a lawyer to practice after termination,” except when retirement benefits come into play. The rationale is the sanctity of the attorney-client relationship.
But what about the relationship between doctors and patients? Apparently it’s less sacred. The American Medical Association’s ethics code says NCAs “can disrupt continuity of care, and may limit access to care,” and counsels doctors not to sign any that “unreasonably” restrict them. But it doesn’t forbid employers, including the hospitals and health-care systems that now employ about 40% of physicians, from using them.
In other words, the AMA, unlike the ABA, is on the fence when it comes to NCAs. … Maybe, says Erik Weibust, an attorney at Epstein Becker Green who represents employers in noncompete cases, it’s because “lawyers make the rules.”
