By adopting amended Senate Bill 351 (SB351) last week, the
Connecticut General Assembly proposed to reduce significantly the
enforceability of non-compete restrictions for physicians.
The bill defines "covenant not to compete" broadly and
includes "any provision of a partnership, employment or other
contract or agreement that creates or establishes a professional
relationship with a physician and restricts the right of a
physician to practice medicine...." This would include
independent contracts for clinical services but would not include
(or prohibit) a non-compete provision in any arrangement that does
not restrict a physician's ability to practice medicine, such
as ownership in an ambulatory surgery center or a medical
directorship. Non-compete restrictions for physicians would be
unenforceable unless (1) the provision applies for one year or less
and the geographic scope is 15 miles or less from the
physician's primary service area, or (2) the employer
terminates the physician's contract "for
cause."
SB 351 allows a hospital, health system or medical foundation to
have a non-compete that restricts a physician's right to leave
to practice at another hospital, health system or medical
foundation, but such restriction cannot prohibit a physician from
returning to independent community practice or joining any medical
foundation that is not affiliated with a hospital or health system.
These new limitations would apply to any agreement that is entered
into, amended, extended or renewed on or after July 1, 2016, and
require a physician to "separately and individually sign"
each covenant not to compete. The Bill is awaiting signature by the
Governor.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
