Physicians across the country are pushing to reform, and in some cases ban, noncompete clauses, which prohibit them from seeing patients one to two years within a geographic region if they are fired or quit their job, NBC News reported March 3.
Employers say noncompetes protect their investment in recruiting and supporting physicians, while physicians say they restrict care access and push clinicians to remain silent about unethical conditions.
Critics of noncompetes, including the American Medical Association and the American College of Physicians, say the agreements can contribute to physician shortages, sever patient relationships and deter physicians from speaking out against their employers.
Some hospitals and organizations have a different view, however.
"We think they are important for protecting investments that hospitals make to recruit doctors and senior executives," Chad Golder, general counsel for the American Hospital Association, told NBC News. "Imagine you're a rural hospital out in the country and you spend a lot of money to bring on a new physician, to get them integrated into the community, to train them, and they leave after a short period of time after you've made all this investment to get them out there."
The American Medical Association estimates that between 35% and 45% of physicians in the U.S. are bound by noncompete clauses of some kind. This number has increased as more physicians move to employed models over private practice.
Last year, the Federal Trade Commission proposed a rule that would ban noncompete contracts for full-time employees and independent contractors, but there has yet to be a final ruling. About 87% of physicians support the proposed rule, according to a March Doximity poll of 4,853 practicing physicians.
In Indiana, pediatric intensivist David Lankford, MD, is suing his former employer, Fort Wayne-based Lutheran Hospital, to get out of a noncompete clause. His contract prohibits him from working within 30 miles of the hospital for a year after ending employment. In 2023, the state passed a noncompete ban for primary care physicians, but it excluded specialty physicians.
In Georgia, according to NBC News, HCA Healthcare-affiliated Memorial Health University Medical Center threatened one of its former OB-GYNs with a suit based on noncompete agreements when the physician went to work at a nearby clinic focused on treating low-income women.
In Ohio, surgeon Anjay Khandelwal, MD, took his case to the state's Supreme Court in 2022. He won the right to treat pediatric burn patients at a hospital after being sued by his former employer.
Many states have changed or are attempting to change their noncompete laws. Connecticut, Florida, Indiana, Maryland, New Jersey, Washington and Wisconsin have all addressed noncompete laws in the last year.