The American Hospital Association raised concerns about a regulation proposed by the Federal Trade Commission that would prohibit the use of noncompete clauses in employment agreements.

It argued the proposed rule would profoundly transform the healthcare labor market, particularly for physicians and senior hospital executives.

“It would instantly invalidate millions of dollars of existing contracts while exacerbating problems of health care labor scarcity, especially for medically underserved areas like rural communities,” according to the letter. “Perhaps most troubling, the FTC would take this monumental step on the apparent basis of economic research that does not actually support the proposed rule.”

The AGA also argued Congress has not given the FTC the authority to promulgate such a rule and that even if the FTC goes ahead with it, the rule should exempt physicians and senior hospital executives among other highly compensated employees.

The letter is online.

Right now, the FTC is holding a public comment period on the proposed rule, and the deadline for comments has been extended to April 19.