Mount Sinai Health System Faces Labor Complaint over Restrictive Employment ContractsMount Sinai Health System Faces Labor Complaint over Restrictive Employment Contracts Mount Sinai Health System in New York City is under fire for allegedly violating labor rights through employment contracts that contain anti-poaching and confidentiality clauses. According to a complaint filed by the National Labor Relations Board (NLRB) in June 2024, these clauses restrict part-time doctors from soliciting or inducing hospital employees to terminate their employment for one year after termination. The NLRB alleges that these agreements violate the National Labor Relations Act by interfering with employees’ rights to communicate and organize. The health care system’s actions are accused of obstructing commerce by limiting the mobility of healthcare workers. The complaint follows a landmark decision by the Federal Trade Commission (FTC) to ban noncompete agreements nationwide in April 2024. The FTC argued that such agreements suppress wages, stifle innovation, and harm the economy. However, business groups and agencies have filed lawsuits challenging the ban. The NLRB’s complaint was initiated by an anonymous physician who alerted the agency to the contract terms in November 2023. The agency is seeking an order requiring Mount Sinai to rescind the contract terms, cease enforcement actions, and compensate affected employees. The complaint aligns with the NLRB’s increasing focus on anti-competitive labor practices. In recent years, the agency has taken action against employers who use confidentiality provisions to prevent employees from speaking out. Mount Sinai Health System has not yet responded to requests for comment. The case is scheduled to go before an administrative law judge on September 24, 2024.
Mount Sinai Health System in New York City is forcing part-time doctors to sign employment contracts that violate their labor rights, according to a June 2024 complaint filed by the National Labor Relations Board (NLRB).
According to NLRB officials, the complaint is based on the anti-poaching and confidentiality clauses in the agreements that are a condition of employment.
The contracts state that part-time physicians may not solicit, solicit or induce hospital employees or independent contractors to terminate their employment for one year after termination, according to a copy of the terms in the NLRB’s June 18 complaint.
By requiring the agreements, NLRB officials alleged, you are “interfering with, obstructing, and coercing employees” in violation of the National Labor Relations Act. The health care system’s “unfair labor practices” affect commerce as set forth in the act, the NLRB said. The act prohibits 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 ban noncompete agreements indefinitely in an effort to protect workers.
“Noncompete agreements hold down wages, stifle new ideas, and rob the American economy of dynamism, including the more than 8,500 new startups that would be created in a year if noncompetes were banned,” FTC Chair Lina M. Khan said in a statement. “The FTC’s final rule banning noncompetes will ensure that Americans have the freedom to find a new job, start a new business, or bring a new idea to market.”
Business groups and agencies have since filed lawsuits challenging the ban, including the U.S. Chamber of Commerce. The Chamber and other business groups argue that noncompete agreements are important for companies to protect trade secrets, shield recruitment investments and hide confidential information. The lawsuits are ongoing.
A doctor blows the whistle
An anonymous physician first alerted the NLRB to the contract language in November 2023. The physician was required to sign the hospital system’s agreement for part-time physicians. The complaint does not say whether the employee is still employed by the hospital system.
To address the alleged unfair labor practices, the NLRB is seeking an order requiring the health care system to rescind the contract terms, cease all actions against current or former employees to enforce the provisions, and compensate any employees who suffered financial losses as a result of the contract terms.
The charge against Mount Sinai is one of a growing number of complaints filed with the NLRB alleging unfair labor practices. During the first six months of fiscal year 2024, unfair labor practice charges filed with NLRB field offices increased 7% — from 9,612 in 2023 to 10,278 in 2024, according to a press release.
Meanwhile, the NLRB is taking tougher action against anti-competitive labor practices and confidentiality provisions that prevent employees from speaking out.
For example, in a February 2023 ruling, the NLRB held that an employer violated the National Labor Relations Act by offering employees severance packages that contained restrictive confidentiality and nondisparagement provisions. In 2022, the NLRB and the Federal Trade Commission partnered to combat unfair, anticompetitive, and deceptive business practices more broadly.
“Non-compete agreements are reasonably likely to deter employees from exercising their Section 7 rights, while the provisions could reasonably be interpreted by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities for which they are qualified,” NLRB General Counsel Jennifer Abruzzo said in a 2023 press release.
Abruzzo emphasized in a memo that the NLR Act seeks an interagency approach to restrictions on the exercise of workers’ rights, “including restrictions on workers’ labor market mobility, information sharing, and referrals to other agencies.”
Mount Sinai Health System must respond to the NLRB’s complaint by July 16. An administrative law judge will hear the case on September 24.
Alicia Gallegos is a freelance healthcare reporter based in the Midwest.
