Connecticut lawmakers recently introduced two bills that seek to ban non-competition agreements for physicians. If implemented, this would be the second time in five years that Connecticut has legislated in the area of physician restrictive covenants.
In mid-2016, Connecticut enacted legislation that implemented a maximum one-year temporal limitation on physician non-competition agreements, as well as a geographic limitation of no greater than fifteen miles from the primary site where such physician practices. The law also set requirements as to how physician non-competes were to be executed, and restricted employers from enforcing such agreements when terminating physicians’ employment without cause and/or without offering to renew the physicians’ prior contract on the same or similar terms and conditions.
The two new bills, Senate Bill 99 and House Bill 5572, introduced on January 12 and January 24, 2021, respectively, propose to ban completely the use of non-compete clauses in physician contracts. Both bills have been referred to the Connecticut Legislature’s Joint Committee on Public Health. The specific details concerning the proposed restrictions have yet to be publicized, but Connecticut healthcare industry employers should continue to monitor developments in this area closely.
Nationwide, Connecticut appears to account for a disproportionate percentage of the proposed legislation in the area of restrictive covenant regulation in 2021. For example, three separate bills—Senate Bill 906, House Bill 6285, and House Bill 6379—each provide a complete overhaul of restrictive covenant law in Connecticut, in similar fashion (with some notable distinctions) to the proposal currently before the New Jersey General Assembly. In the area of home health care, competing bills have been introduced to either modify or eliminate existing limitations on various types of restrictive covenants in that industry.
Jackson Lewis attorneys are available to answer inquiries from employers concerning these and other proposed changes. We will continue to monitor developments in this area. Readers can subscribe to this blog to stay up to date on pending legislation and other updates as they arise.