The Minnesota Attorney General’s Office has opened an investigation into Aspirus Health following worker complaints of noncompete agreements that may violate state law.
The investigation was first reported by the Minnesota Reformer and confirmed to Fierce Healthcare by the office, which said it had served the three-state, 19-hospital nonprofit with a subpoena for additional information on its noncompetes.
The investigation is still in its early stages, and the health system said it intends to cooperate with the office.
“Aspirus Health is a values-driven organization with a mission to heal people, promote health and strengthen communities,” a spokesperson said in an emailed statement. “We look forward to working closely with the attorney general’s office to clarify any misunderstanding.”
Aspirus physicians who spoke to the Reformer under the condition of anonymity said the system had pushed contract amendments that retained the noncompete agreements from their prior contracts. They also described substantial changes to other terms of the contracts, which were reviewed by the publication, related to compensation and workload.
Minnesota passed legislation in 2023 that banned most noncompete agreements signed on or after July 1, 2023. Though it does not apply retroactively to prior contracts, its exceptions largely revolve around cases in which a business is being sold or dissolved.
“All too often, non-compete agreements are used to prevent workers from seeking new job opportunities that offer better pay and working conditions,” a spokesperson for the attorney general’s office said in an emailed statement. “Attorney General [Keith] Ellison is concerned about the harm that overly broad or improperly maintained non-competes can cause workers across our state, and encourages anyone subject to a non-compete they believe is unfair to file a complaint with his office.”
Aspirus Health, based in Wausau, Wisconsin, runs nearly 150 locations and employs about 14,000 people, including 1,300 employed physicians and advanced practice clinicians. Early last year, it closed a merger with St. Luke’s Duluth, in Minnesota—a deal that included hundreds of millions of promised investment and for which the organizations were required to secure regulatory approvals from Ellison’s office.
Minnesota is one of four states with a law fully banning noncompete agreements, though 34 states have partial restrictions on the books. Noncompete agreements have received fair scrutiny at the federal level, though a sweeping ban finalized by the Federal Trade Commission under the Biden administration was defeated in court and subsequently pulled by the new, Republican-led iteration of the regulator.
That said, current FTC leadership has acknowledged that noncompetes “can serve valid purposes in some circumstances,” including healthcare, “where noncompete agreements may limit employment options for nurses, physicians and other medical professionals and thereby restrict patients’ choices of who provides their medical care.”
The regulator said it will be pursuing a “case-by-case” enforcement strategy, and last month penned letters to multiple large healthcare employers and staffing firms, urging them to voluntarily review their employment contracts for any noncompetes that are overly broad or anticompetitive.