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New Restrictions on Non-compete Clauses for Physicians in RI

September 23, 2016

Are you a healthcare employer in RI? Read about new non-compete restrictions on physicians in the Ocean State.

There are recent legislative developments that will impact physician non-compete agreements in RI. The developments are aimed at curbing the negative effects of non-compete agreements on patients.

What is a physician non-compete agreement?

A non-compete agreement is a clause or section in a physician’s contract where the physician, or employee, agrees not to engage in his or her chosen profession in competition with the employer. This can mean something as simple as prohibiting a past physician from practicing within one mile of the employer’s medical office.

The purpose of these arrangements is to prevent an ex-employee from exploiting anything gained at a previous employer (i.e. knowledge, resources, leads, etc.)

Breakdown of the Regulations

RI- The Ocean State enacted General Law § 5-37-33 which voids any non-compete agreements between physicians and employers that limit the right to practice medicine in any geographic area for any length of time after a partnership, employment or professional relationship is terminated.

The law also says that any employee or partnership agreement that prevents a physician from treating, advising, consulting or soliciting a current patient of the employer is not enforceable. Any non-compete arrangement established with the purchase or sale of a practice is the only explicit exception to the law.

Why?- The aim of this law is to protect patients’ ability to choose where they’d like to be treated by preventing employers from contracting non-competes with physicians and thus limiting the physicians’ ability to practice medicine in a certain way or in a certain place.

Are other states enacting similar restrictions?

There is a growing number of states that have taken legislative action to limit physician non-competes. Massachusetts does not have a new non-compete law for this year, but there have been several bills introduced in the Commonwealth in the past regarding these agreements. Their 2015-16 legislative session ended on July 31st without a definitive decision on physician non-competes within the state.

CT has passed a bill (Senate Bill Number 351) early this summer which places certain restrictions on non-competes between physicians and employers. The law requires that non-competes restrict a physician’s competitive activities for no more than one year and extend to a geographic location of no further than 15 miles from the physician’s primary practice location.

Employers in the healthcare field should be cognizant of the implications of these laws if they are in an area where non-compete restrictions have been implemented. To view other states’ physician non-compete regulations, consult their government sites.

Contact us for further information.

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