Further FTC Education Needed On Non-Compete Ban’s Potential Effects, Legal Insiders Suggest

Because the home care industry is so large and fragmented, consensus is often hard to come by.

That is the likely outcome for the debate around banning non-compete agreements, too. For instance, there are plenty within the industry who believe that would be a step in the right direction.

But then there are the providers. And many of their leaders recognize how much the ban could hurt their businesses – in more ways than one.


“What I have seen over the years, and continue to beat the drum on, is when we act as an industry in a collective manner, it’s really loud,” Angelo Spinola, the chair of home care, home health and hospice at the law firm Polsinelli, said during a HCP’s Growth Summit last week. “It’s such a large industry and there are so many voices. We really need to be active in how we pursue change.”

In early January, the Federal Trade Commission (FTC) proposed a ban on non-compete agreements. The rule is likely to be finalized, Spinola previously told Home Health Care News. Still, it will likely face strong advocacy and legal opposition.

But Spinola believes that the non-compete ban can be avoided if the home care industry can collectively explain how it would be affected by it.


“From my perspective, this one is the most susceptible to challenge of all these because this is truly unique,” Spinola said. “It’s an extraordinary test of power here to do something like this for several reasons.”

For one, non-compete agreements have traditionally been a state — not federal — issue, Spinola said.

But perhaps more importantly, there’s also deep-rooted misconceptions about home-based care in the federal government, he said.

For example, in a client service agreement, there’s a penalty provision in that agreement that says the client and the caregiver could not contract with each other and cut the agency out of the deal without paying a fee.

The federal government now, through the FTC, is taking the position that that process is a non-compete and is unlawful.

“Because [in their eyes], you’re restricting the caregivers’ right to work for whoever they want,” Spinola said. “That is a fundamental misunderstanding of our industry, right? And a misunderstanding of how much work, time, effort and training goes into vetting and preparing a caregiver to work with a client. If you can’t protect that interest because of the law being restrictive on non-compete, that’s going to really, really chill business and the desire to even be in business.”

That’s one example, Spinola said, that can be used as an education piece from providers to teach the FTC the specific details of how this kind of care is delivered and how these occupations often work.

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