Update from New England States: Connecticut and Rhode Island Pass Restrictions on Physician Non-Compete Agreements

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    Immanuel K. H. Ho, MD, FACGChair, ACG Board of Governors

    Immanuel K. H. Ho, MD, FACG
    Chair, ACG Board of Governors

    This summer, Rhode Island and Connecticut passed significant legislation concerning the use of non-compete agreements for physicians.  The goal of restrictions on non-compete agreements is to give physicians significantly increased flexibility and mobility in their professions. These laws are also intended to promote the public interest on the theory that such non-compete agreements may inhibit patients’ access to the medical care of their choice.  Unfortunately, the Massachusetts’ legislature failed to pass a similar physician non-compete prohibition despite significant support.

    ACG Practice Management Resources

    Need advice on understanding the components of a non-compete agreement, and tips on protecting yourself from a bad scenario?  Check out AJG’s A Brief Introduction: THE NON-COMPETE AGREEMENT authored by Raj Majithia, MD.

    Connecticut

    Connecticut 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 any non-compete agreement entered into, amended, or renewed on and after July 1, 2016, must be separately and individually signed by the physician.  (CT Public Act No. 16-95.)

    Rhode Island

    The Rhode Island legislation is broader than the Connecticut law.  Effective July 12, 2016, it is now unlawful in Rhode Island to restrict in any way “the right to practice medicine in any geographic area for any period of time after the termination” of any partnership, employment, or professional relationship with a physician. The law also prohibits any restrictions on the right of physicians “to solicit or seek to establish a physician/patient relationship with any current patient of the employer.”  The law bars both equitable relief (i.e., a court order prohibiting the physician from working for a competitor) and money damages based on a breach of a non-compete agreement.

    It does not, however, apply in connection with the purchase and sale of a physician practice, provided the restrictive covenant is less than five years in duration.  (R.I. Gen. Laws § 5-37-33).

    Remember to contact your ACG Governor on important state and local issues impacting you and your practice.

    The ACG Board of Governors is one of the most unique aspects of the American College of Gastroenterology. Governors are ACG Fellows that are elected from the membership of a particular state or region. There are currently 76 Governors across seven different regions in the U.S. and abroad. The Board of Governors acts as a two-way conduit between College leadership and the membership at-large. This helps the College make certain it is meeting the evolving needs of the membership.  Contact your ACG Governor today.

    Immanuel K. H. Ho, MD, FACG

    Chair, ACG Board of Governors

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