WHY VETERINARY NON-COMPETES ARE HERE TO STAY DESPITE THE 'PROPOSED' BAN BY THE FTC - PART 2

As a follow up to my Article “Why Veterinary Non-Competes are Here to Stay Despite the Proposed Ban By the FTC” published with VetPartners.org, the FTC officially adopted the proposed rule in a 3-2 vote today that has already sent shockwaves through the veterinary community. While there are valid considerations to each side of the rule, the arguments raised by the two dissenting FTC Commissioners are telling. Legal challenges will ensue making it highly unlikely the proposed rule will actually take effect anytime soon.

The issue is not whether restrictive covenants or non-compete agreements are fair, or even if restrictive covenants and non-compete agreements should be reigned in to some respect. The question is whether a governmental agency under the control of the Executive Branch has rule making authority generally reserved to the Legislative Branch (Congress)? The majority argues that the FTC Act delegates authority from Congress to the Executive Branch, but ultimately relies on antiquated rulings that have been called into question by recent opinions from the United States Supreme Court. In contrast, the dissenters referenced language from Util. Air Regulatory Grp. v. EPA, 573 U.S. 302, 134 S. Ct. 2427, 2434 (2014) requiring “clear congressional authorization” to satisfy the “non-delegation doctrine”.

In short, these recent Supreme Court decisions cast doubt on proclaimed legal authority when an agency claims to uncover a long-extant, unheralded power over a significant portion of the American economy. Instead, the Court looks for “clear congressional authorization” for Congress to pass such rulemaking authority to a legislative agency as required by the “nondelegation doctrine” routed in the balance of powers left to the legislative branch, rather the executive branch, in the United States Constitution. In other words, Congress will likely have to directly approve such a substantive, rather than procedural, change to states’ longstanding ability to self-govern employment-related restrictive covenants.

Remember Student Loan Forgiveness?

Do you recall when President Biden attempted to cancel student loan debt through the Department of Education? This too reverberated through the veterinary community until the Supreme Court in Biden v. Nebraska, 600 U.S. 477, 143 S. Ct. 2355 (2023) struck it down holding the Executive Branch is without authority to cancel student loan balances without Congressional authority. The issue before the Court was not the reasonableness or fairness of loan cancelation, rather who has the power to enact such laws. In the simplest of arguments, the Court held that “clear congressional authorization” by Congress to the Executive branch (or governmental agency) would be necessary for any such action as required by the United States Constitutions guarantee of a balance of power.

Legal Challenges Forthcoming

Similarly, it is anticipated that a Federal District Court will soon issue a nationwide injunction to the FTC Non-Compete Rule that will both delay and confuse enforcement procedures. From there we will have to wait for the Appellate Courts to weigh in before the United States Supreme Court decides whether to take up the issue. Needless to say, we are a long way away before the FTC’s Non-Compete Rule sees actual daylight, if at all. Until then, employers and employees will be forced into limbo.

Contact Our Experienced Nationwide Veterinary Attorneys 

If you need veterinary legal assistance of any kind, including compliance and consultation regarding the new FTC ruling, non-compete agreements, or veterinary employment agreements, Mahan Law is on your side. Please contact us today to schedule an initial consultation with one of our experienced and knowledgeable veterinary lawyers.

Loan Forgiveness for Ross University School of Veterinary Medicine Graduates

On June 22, 2022, The United States Department of Education (“USDE”) and Class Plaintiffs in the Sweet v. Cardonaclass action proposed a settlement where the USDE will cancel $6 billion in student loans for 200,000 borrowers for certain schools.  Among those schools is Ross University School of Veterinary Medicine (“Ross”).  If you have applied for borrower defense loan forgiveness before June 22, 2022, you are already part of the class and do not need to take further action.  Once the United States District Court for the Northern District of California approves the Settlement Agreement, all previous applications for cancelation will be re-reviewed.

Veterinarians that attended Ross and have not applied for borrower-defense forgiveness by June 22, 2022 can still qualify as a post-class applicants.  However, time is of the essence as funds for these types of settlements are limited and usually priority is given to the first applicants.  Veterinarians who are a victims of Ross’s deceptive or predatory practices should consider immediately filing “borrower defense” applications with the Department of Education (https://studentaid.gov/borrower-defense/).  Once submitted such application will be considered “Post-Class Applicants” to the class and may receive the same relief as Class members.  One can also call the Department of Educations Borrower Defense Hotline at 1-855-279-6207 to check the status of such applications.

The relief is substantial.  Class Members and qualifying Post Class Applicants will be eligible to have their outstanding loans fully discharged, receive refunds for amounts paid, and have any negative credit history associated with these loans deleted.The information contained in this blog is for educational purposes only and should not be considered legal advice or the establishment of an attorney/client relationship.  If you need an experienced veterinary attorney, we can help.  At Mahan Law, our knowledgeable veterinary professionals understand how to succeed in the veterinary industry. When you come to us for assistance, we will put our understanding and experience to work for you, doing everything we can to help you achieve your professional and personal goals.

Families First Coronavirus Response Act Update

On March 14, 2020, the U.S. House of Representative passed H.R. 6201, Families First Coronavirus Response Act, the complete bill is available here. The U.S. Senate has yet to vote on the bill and it has yet to be enacted into law.

The intent of the bill is to guarantee free coronavirus testing, secure paid emergency leave, enhance Unemployment Insurance, strengthen food security initiatives, and increase federal Medicaid funding to states.

How the Families First Act could affect employers.

The current version of the bill expands the Family and Medical Leave Act (“FMLA”) to all employers with fewer than 500 employees. It allows all employees who have been on the job for at least 30 days the right to up to 12 weeks of protected leave for any of the following reasons:

  • To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus;
  • To care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; or
  • To care for a child of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a coronavirus. 

After the two weeks of paid leave, employees will receive a benefit from their employers that will be no less than two-thirds of the employee’s usual pay.

Covid-19 Precautions and Your Appointment Schedules: Alternative Appointments?

Setting alternative appointments may be a good decision for public health and the economic health of your business. While most of our veterinary and dental clients inform us they have yet to feel a significant (or modest) slowdown of services, there is a quickly moving trend to request veterinarians and dentists to reschedule or cancel elective surgeries. Some states have, and others are highly suggesting (and considering mandating), all non-essential businesses to close altogether. While we strive to provide updated information as soon as possible, you may consider alternative appointments, if not for public health concerns, to preserve your personal protective equipment that is on backorder. Below are some ideas…

Telemedicine

Most states permit telemedicine appointments if there is already a VCPR established with a client.  If you are not set up for telemedicine, you may consider setting up a free Zoom account that allows you to conduct a broad spectrum of video conferencing using a laptop with a camera, or even a smartphone, to conduct telehealth appointments.  As of this moment there is no widely known exceptions to establishing a VCPR without a physical exam and any such exception would come from your state specific board.

Reduce Physical Time in Office/Drop-offs

You may be able to limit the time a client spends in office by taking histories and payments by phone, having them wait in the car until you are ready for their appointment, or deliver prescriptions and other items directly to the client’s vehicle. Veterinarians should consider daily admits (drop-offs) as a good balance to continue operations while protecting the public.

Ration Your In-House Pharmacy and PPE

It is expected several items will be in short supply in the near future so stretching out refill requests of these items from your own pharmacy may be a wise idea. I will refer you to your distributors and manufacturers for a list of items. If you haven’t started already, now is the time to ration the use of personal protective equipment as reasonably as possible. Use reusable items as appropriate and limit the waste of disposable items such as gloves and masks (this may be the best reason to reschedule elective treatments and surgeries).

Reschedule Elective Surgeries? For How Long?

Interesting question! I will tell you as of the writing of this entry I personally have an elective surgery (meniscus repair) scheduled at local hospital on April 3, 2020. The hospital has yet to reschedule that appointment and I assume is adopting the “wait and see approach” before doing so. At the moment, we are recommending that, if you decide to reschedule elective surgeries, to do so 1 week or 2 weeks at a time to allow the absorption of additional information.

Hindsight is 20/20

Make no mistakes about it, there are no right answers and every business owner must individually address his or her own business, community, and local government actions. In 3-4 months there will be arguments on both sides concerning whether or not the precautions taken by governments and businesses were necessary and effective, or a simple drain on the economy. To be sure, know your clients and staff and address them in a manner that preserves your integrity in both a safe and economic manner.