Four states and Washington, D.C., have recently updated their governance of agreements that prohibit employees from competing with businesses directly for a specific duration of time after their employment has ended, according to a Aug. 2 report from the National Law Review.
Legislation is pending in Connecticut, Louisiana, Minnesota and Missouri that would prohibit the use of these noncompete agreements with many physicians, according to the report.
Additionally, there's a bill pending in Florida that would require any physician noncompetes to include the option to buy out the restrictive covenant, as well as a bill pending in Massachusetts that would prohibit the use of noncompetes with physician assistants.
1. Illinois passed a law that prohibits nurse agencies from entering noncompete contracts with nurses and certified nurse aides.
2. Iowa passed a law that prohibits healthcare employment agencies from restricting employment opportunities by including a noncompete clause in their contracts
3. Kentucky passed a law prohibiting healthcare services agencies from restricting employment of direct care staff by using noncompete clauses.
3. Washington, D.C., has banned noncompetes for employees making less than $150,000 per year or for a medical specialist, defined as a physician who has a license to practice medicine and has completed a medical residency, making less than $250,000. The law means virtually all noncompetes are banned except for medical specialists making more than $250,000 per year, according to the report.
4. Amendments to Colorado’s noncompete law, scheduled to go into effect on Aug. 10, clarify physicians' rights in noncompetes. Currently, Colorado law prohibits noncompete provisions between physicians that "restrict the right of a physician to practice medicine,” but employers can require the payment of damages related to the termination of the agreement.
Colorado's amendment allows physicians to offer care to any patient with a "rare disorder" without being subject to the damages.