A recent proposal by the Federal Trade Commission could be potentially harmful to private dental practices that aim to protect their business and patient relationships.
The FTC proposed a rule that would ban employers from imposing noncompete agreements on employees. In addition to prohibiting employers from entering or attempting to enter noncompete agreements with workers, the rule would also make it illegal for employers to maintain a noncompete or represent to a worker that they are subject to a noncompete agreement under certain circumstances. Employers would also be required to rescind existing noncompete agreements.
The rule would apply to independent contractors as well as anyone who works for an employer, whether paid or unpaid. The organization estimated that noncompete agreements affect 18 percent of U.S. workers and that a ban could increase wages by nearly $300 billion each year.
Here, three dentists share their thoughts with Becker's on the proposal and how it could affect dental practices and competition in the industry.
Editor's note: Responses were lightly edited for clarity and length.
Andrew Goldsmith, DDS. Northshore Dental (Houston): The Federal Trade Commission's proposed ban on noncompete clauses does not aim to serve the overarching purpose of "preventing unfair methods of competition." When a business owner employs a provider that has access to privileged information and intellectual property, the business becomes vulnerable to unfair competition if an employee departs from the company and then uses that information for their benefit, thus creating unfair competition for the business owner.
Furthermore, the Federal Trade Commission's stated primary missions are protecting competition and protecting consumers. The FTC does not protect competition if they remove noncompete clauses. In the game of football, it would not be competitive to give an opponent all your trade secrets, IP and your playbook, then play against them. That is not competition and that feeds into the mentality that has seen our society give participation awards instead of allowing people to win and lose; that's competition! The Federal Trade Commission needs to protect the business owners that take risks, provide jobs and fuel our economy.
Robert Trager, DDS. Dentist at JFK and LaGuardia Airports (New York City): Today, there is no loyalty for most employees; "the benjamins" do the talking. As an employer, you cannot fault an employee for wanting higher pay and better benefits. The DSOs can afford to do this in competition with the solo practitioners. If you have a loyal employee (which is hard to find) and you want to keep them, you should offer a benefit that you will not cut their hours or lay them off when business is slow. This does not happen in a DSO platform. You can also offer more paid holidays and/or pay for their parking and/or tolls.
Noncompetitive agreements are rarely enforced, so if you treat your employees with dignity and respect, hopefully they will stay with you. In today's environment there are many migrants who are in this country, and some would love to learn dental assisting or administrative duties, especially in a bilingual community. Money talks, but appreciation, concern, dignity, ethics, respect and love for your employees should go a long way in retaining them.
Joseph Wineman, DMD. Wineman Dental (Henderson, Nev.): Completely banning noncompete agreements could harm private dental practices. In my opinion, most of the value in a dental practice is the patient base coupled with the ongoing relationship the dentist has with each and every patient within it.
Consider this scenario: A solo practice owner (Dr. A) brings on an associate (Dr. B, a recent dental school graduate) who wants to be mentored and learn about the business of dentistry. Dr. A mentors, coaches and teaches Dr. B. Dr. A. shares his/her patient base with Dr. B for a year or two. Dr. B improves his/her skill set and develops a rapport with her/his patients within Dr. A's practice. After learning everything Dr. A knows, Dr. B decides to step away and start his/her own practice. While patients certainly have the right to choose their own dentist, it would be unfair for Dr. B to be able to establish his/her practice right next door to Dr. A's location and poach patients away from Dr. A's practice. A noncompete clause within their employment agreement of say five miles would be a way to allow the patients a choice but also maintain Dr. A's "turf."
Noncompete clauses which are excessive (25-mile radius from the existing practice) and interfere with Dr. B's opportunity to make a living and work within the city of his/her choice should be modified to be fair to both parties. Dr. A has spent years growing his/her practice — reputation and goodwill within the community. Money has been spent on marketing, website presence, perhaps even mailers, and it would be unfair for that effort to be simply ignored by the stroke of the government pen.