Major changes for physician non-compete agreements in RI and CT

Earlier this summer, the state legislatures in Rhode Island and Connecticut passed significant legislation concerning the use of non-compete agreements for physicians.

On July 12, 2016, RI governor Gina Raimondo signed into law a sweeping prohibition of the use of non-compete agreements for physicians. In doing so, Rhode Island joins neighboring Massachusetts, which has prohibited non-compete agreements for physicians for many years. The new law specifically bars restrictions on physicians’ right to practice medicine in any geographic area for any period of time; their right to provide treatment, advise, consult with, or establish a physician/patient relationship with any current patient of the employer; and their right to solicit or seek to establish a physician/patient relationship with any current patient of the employer. It does, however, preserve restrictive covenants in connection with the purchase and sale of a physician practice, so long as such covenant does not last for more than five years.

Although less dramatic in scope, Connecticut also passed a new law imposing significant restrictions on physician non-compete agreements. Connecticut’s new law, which took effect on July 1, 2016, limits physician non-compete agreements to a period of one year and to a geographic region of fifteen miles from the primary site where the physician practices. In addition, physician non-compete agreements are now only enforceable where the agreement was made in anticipation of or as part of a partnership or ownership agreement. Physician non-compete agreements are also now unenforceable in Connecticut where the physician’s employment was terminated by his or her employer, unless the employment or contract relationship is terminated by cause. Finally, the new Connecticut law requires that each covenant not to compete entered into, amended, or renewed on and after July 1, 2016, must be separately and individually signed by the physician.

Such restrictions on non-compete agreements give physicians significantly increased flexibility and mobility in their professions. They are also intended to promote the public interest on the theory that such that non-compete agreements may inhibit patients’ access to the medical care of their choice. Hospitals, practice groups, and physicians themselves should be aware of these new laws and integrate them into their employment practices and procedures. As always, Barton Gilman stands ready to assist.