Elimination Of Non-Competes Would Have ‘Major’ Effect On Home-Based Care World

Home Health Care News | By Andrew Donlan
In early January, the Federal Trade Commission (FTC) proposed a ban on non-compete agreements nationwide.
The rule is likely to be finalized. When and if it does, it is also likely to have a massive effect on the home health and home care industries.
Such a move would not just hurt companies by allowing leaders to jump ship, but it would also muddy the waters on a slew of contractual agreements between caregivers and clients.
“I definitely think it’s major. It’s extraordinarily significant,” Angelo Spinola, the chair of home care, home health and hospice at the law firm Polsinelli, told Home Health Care News. “If you can’t stop a key executive from leaving and competing against you, that will have a significant impact on the industry.”
The proposed rule can be traced back to the Biden administration’s Aug. 2021 request to the FTC to take a longer look at restricting or banning non-compete agreements. Broadly, the idea was that non-competes restricted workers’ mobility and ability to make a livable wage.
It seemed at the time that President Biden was referring to low-wage workers specifically. And while this would have an effect on, for instance, the caregiver-provider relationship, it would also be a major shake-up in what home-based care leadership could do when looking for new opportunities.
For instance, Spinola offered up the example of a home health administrator. They could be trained up by a home health organization, promoted and given access to all the patient data and pricing of an organization.
“Now that individual says, ‘You know what, I’ve got all the relationships. And I’ve been collecting a salary from the owner. But now I’m just going to go across the street, and I’ll open my own agency. I’ll wait for those clinicians to call me and start working with me. And the relationships I’ve developed with the facilities and those referral relationships, I’ll just bring those over,” he said.
Home-based care leadership has already been in disarray, to a certain extent. Big-time executives have either left their posts or been forced out in the wake of COVID-19 and other unfavorable market conditions.
If the FTC ruling becomes final, that could become even more so the case.
Read Full Article