Changes in noncompete agreements, which prohibit physicians from joining a competing practice or setting up their own within a particular distance from their previous practice for a certain period of time, are ramping up in 2023 as states amend their laws.
Here are four major changes and potential changes for leaders to know:
1. In July, Connecticut 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.
Additionally, noncompetes are barred if the agreement has expired and not renewed or if the employment is terminated by the employer without cause.
Read more about the changes here.
2. In June, the New York Legislature passed a bill aiming to stop employers from entering into noncompete agreements with their employees. If Gov. Kathy Hochul signs the bill into law, any noncompete agreement entered or modified 30 days after the signature will be void.
3. In April, Indiana's House of Representatives and Senate voted in favor of a noncompete ban for primary care physicians but excluding specialty physicians. The ban would allow physicians the opportunity to change jobs without having to move out of a large radius of their current employer.
4. In January, the Federal Trade Commission proposed a rule that would keep employees free from noncompete agreements. The rule would apply to full-time employees and independent contractors, both paid and unpaid. In President Joe Biden's State of the Union address in February, he said "We're banning those agreements so companies have to compete for workers and pay them what they're worth."