Two states in the northeast, Connecticut and Rhode Island, have recently joined other states in passing legislation limiting the use of non-competition provisions in physician employment agreements. The National Law Review provides a good summary of both new laws. This is good news for physicians in these two states who have previously been subject to broad non-competes.
The new Rhode Island law broadly prohibits non-compete and non-solicitation of patient provisions in most physician agreements. The new law, however, carves out an exception for the purchase/sale of a physician practice, so long as the duration of the restrictive covenants is less than five years.
The new Connecticut law is less sweeping. Rather than eliminating such restrictive covenants entirely, the new law limits the duration of non-competes to one year and the geographic range to 15 miles from the “primary site” of the physician’s practice. The new Connecticut law also makes such covenants unenforceable if the physician’s employment is terminated without cause.
These new laws may reflect a nascent trend in states, following legislation in Delaware, Colorado, Texas and Tennessee, to restrict the use of physician non-competes. The public policy underlying these laws is specifically targeted at physicians and their patients, advancing the important goal of protecting patients’ choice of medical care provider. It will be interesting to see if other states follow Rhode Island and Connecticut.