Feds Aim To End Hospital Noncompete For Part-Time Docs

Mount Sinai Health System in New York City is forcing part-time physicians to sign employment contracts that violate their labor rights, according to a June 2024 complaint 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 state that for 1 year following termination, part-time physicians may not recruit, solicit, or induce to terminate the employment of any hospital system employee or independent contractor, according to a copy of the terms included in NLRB’s June 18 complaint. 

By requiring the agreements, NLRB officials claimed, Mount Sinai is “interfering with, restraining, and coercing employees” in violation of the National Labor Relations Act. The health system’s “unfair labor practices” affects commerce as outlined under the law, according to the NLRB. The Act bans employers from burdening or obstructing commerce or the free flow of commerce.

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 noncompete agreements nationwide. In April 2024, the FTC voted to prohibit noncompetes indefinitely in an effort to protect workers.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8500 new startups that would be created a year once noncompetes are banned,” FTC Chair Lina M. Khan said in a statement. “The FTC’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.”

Business groups and agencies have since sued to challenge against the ban, including the US Chamber of Commerce. The Chamber and other business groups argue that noncompete agreements are important for companies to protect trade secrets, shield recruiting investments, and hide confidential information. The lawsuits are ongoing. 

A Physician Blows the Whistle

An anonymous physician first alerted the NLRB to the contract language in November 2023. The doctor was required the sign the hospital system’s agreement for part-time physicians. The complaint does not say if the employee is still employed by the hospital system. 

To remedy the unfair labor practices alleged, the NLRB seeks an order requiring the health system to rescind the contract language, stop any actions against current or former employees to enforce the provisions, and make whole any employees who suffered financial losses related to the contract terms. 

The allegation against Mount Sinai is among a rising number of grievances filed with the NLRB that claim unfair labor practices. During the first 6 months of fiscal year 2024, unfair labor practice charges filed across the NLRB’s field offices increased 7% — from 9612 in 2023 to 10,278 in 2024, according to a news release. 

NLRB, meanwhile has been cracking down on anticompetitive labor practices and confidentiality provisions that prevent employees from speaking out. 

In a February 2023 decision for instance, NLRB ruled that an employer violates the National Labor Relations Act by offering severance agreements to workers that include restrictive confidentiality and non-disparagement terms. In 2022, the NLRB and the Federal Trade Commission forged a partnership to more widely combat unfair, anticompetitive, and deceptive business practices. 

“Noncompete provisions reasonably tend to chill employees in the exercise of Section 7 rights when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for,” NLRB General Counsel Jennifer Abruzzo said in a 2023 release. 

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

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

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