Noncompetes have been a hot-button topic in healthcare, with supporters and those opposed to the practice each attempting to influence policy changes.
A recent survey from NORC at the University of Chicago found that approximately 60% of employed physicians were required to sign a noncompete when starting their jobs, limiting the ability to practice at other facilities locally. Overall, almost 30 million American workers have noncompete provisions in their contract, according to an Oct. 4 report from U.S. News & World Report.
The Federal Trade Commission in January 2023 proposed a rule that would ban noncompete contracts for full-time employees and independent contractors; they agency is expected to vote on the rule in April. About 87% of physicians support the FTC's noncompete ban, according to a poll conducted by Doximity.
Five states have legislative policies banning noncompete agreements: California, Minnesota, Nebraska, North Dakota and Oklahoma. But what states have policies that affect physicians specifically?
Here is an overview of the noncompete provisions specific to the physician workforce in two states and Washington, D.C.:
1. Connecticut. In July, Gov. Ned Lamont signed into law an act that amends the state's noncompete law for physicians and adds restrictions. Now, physician noncompete agreements entered into or amended on or after July 1, 2016, may last no longer than a year or extend beyond a 15-mile radius from the physician's primary site of practice.
2. Indiana. As of July 1, noncompetes are no longer enforceable for primary care physicians and must include a buyout option for a physician. Noncompetes could be considered unenforceable under certain circumstances of the termination, such as if the physician was fired "without cause," the physician terminates their own employment "for cause," or if the physician's contract has expired and both the physician and employer have fulfilled their respective obligations of the contract.
3. Washington, D.C. The wage threshold for noncompetes is $150,000 per year, or $250,000 per year for "medical specialists." Written notice of the noncompete must be provided within 30 days of an employee’s acceptance of employment as well as anytime the policy changes.