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Non-compete agreements in job contracts are reducing health care access and affordability, a group of physicians, surgeons and lawyers told U.S. Sen. Chris Murphy, D-Conn., at a roundtable conversation in New Britain Tuesday.
In Connecticut, two major health systems — Hartford HealthCare and Yale New Haven Health — own most of the state’s hospitals and many of its physician practices, and health care professionals who work for one system under non-compete agreements are limited if they want to find a new position with another provider.
“We know that primary care is one of those areas where having more primary care docs actually improves outcomes,” said Domenic Casablanca, a family doctor with Middlesex Health. “If you take a situation where a non-compete is going to prevent a family physician or an internist or pediatrician from staying in a community where they have an established patient base… This is where we’re seeing a lot of the problem.”
“There aren’t enough of us to go around,” said Stacy Taylor, a primary care doctor with Trinity Health. Taylor said when she left her previous position in Torrington, she was replaced by a part-time physician. “It’s hurting patients’ access to care because of the lack of people to take one’s place.”
Murphy recently introduced bipartisan legislation seeking to prohibit the use of non-compete clauses in employment contracts. Proponents of such contracts say the language is intended to prevent an employee from going to work for a competitor and taking clients with them or sharing trade secrets.
Representatives for the Connecticut Hospital Association, Hartford HealthCare and Yale New Haven did not immediately respond to requests for comment.
Murphy and others opposed to non-compete agreements say they only stifle competition in the labor force and hold down wages for workers who have little to no leverage to negotiate or leave for a higher salary. An estimated 36 million to 60 million Americans work under such contracts, according to the Economic Policy Institute, while polling shows a majority of Americans support banning them.
Non-competes were once mainly used for employees working with highly sensitive information, but they’ve expanded to include fast-food workers, hairdressers, house cleaners and other industries that largely employ low-wage workers. In lower-wage, hourly work, the agreements might hinder workers from pursuing better opportunities because they’re afraid of being sued for leaving.
In one case, sandwich chain Jimmy John’s distributed agreements to its sandwich makers prohibiting them for two years from working for competing businesses within two miles of a Jimmy John’s location. The documents were found to be illegal, but only after the New York attorney general launched an investigation. Typical workers don’t usually have the time or money to pursue legal action against their employers.
In the health care sector, non-compete agreements affect everyone from home health aids to cardiothoracic surgeons. And their effects go beyond holding down wages or locking workers into one job, leaders in the sector say — they reduce patient access.
Murphy acknowledged that “unique… secondary impact” during his conversation with health care professionals Tuesday. He also said doing away with non-compete clauses in health care contracts could improve competition in a sector that’s rapidly consolidating, potentially bringing down costs for patients.
“We have a big competition problem in health care today. We have too few providers and that keeps prices high,” he said. “Bans on non-compete agreements would promote competition because it would allow physicians to break free of the group they’re with and go start up an independent business.”
Boosting health care competition was a top cause Gov. Ned Lamont and state lawmakers championed during this year’s legislative session, passing a bill that will closely regulate contracts between health systems and insurers in order to boost competition.
The legislature also included provisions in a wide ranging health care bill that limit non-competes for physicians, advanced practice registered nurses and physicians assistants. Beginning this year, “covenants not to compete,” as they’re known in health care, can’t extend beyond one year and a 15-mile radius from the employee’s primary job site.
A separate bill that would have banned all non-competes for anyone earning less than three times the minimum wage never came up for a vote. Patrick Hulin, a policy director with the governor’s office, said state legislation addressing non-competes “is not to the level of the [proposed] federal bill — nowhere near.”
Murphy’s bill, the Workforce Mobility Act, closely mirrors a rulemaking effort by the Federal Trade Commission that would ban non-competes with some exceptions and would apply to all contracts retroactively. However, lawyers said the FTC doesn’t have jurisdiction over nonprofit organizations, meaning the rule may not apply to hospitals and other health care providers. FTC officials are currently evaluating thousands of public comments submitted on the rule.
Another federal agency, the National Labor Relations Board, recently issued a memo proclaiming non-compete agreements unlawful under the National Labor Relations Act.
“This administration is taking more seriously than ever the restraints on our economy and worker wages that are caused by these non-compete agreements,” Murphy said.
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