Pa. Lawmaker Introduces Bill to Ban Non-Compete Agreements for Health Care Practitioners

Last Updated: Jul 1, 2020

non-compete-agreementA bill to prevent the use of non-compete agreements in health care practitioners' employment contacts has been introduced in Pennsylvania House of Representatives. Rep. Torren Ecker sponsored the legislation – House Bill 2636 – which was referred to the House Professional Licensure Committee on June 29, 2020.

The Pennsylvania Medical Society (PAMED), whose policy supports this legislation, believes restricting non-compete clauses will directly benefit patients who may otherwise lose their ability to see the physician of their choice due to their provider’s change of employment. PAMED will be working closely with lawmakers as the measure moves through the legislative process.

As we continue to see an increase in hospital consolidations statewide and the resulting expansion of certain health systems, the footprint of an employer can be cast almost statewide. As a result, clinicians employed by these large systems are often prevented from working within certain regions of the state if they decide to change their employment status.

What would the bill do?

The legislation would deem any non-compete language in an employment agreement for a health care practitioner to be against public policy. The bill would prohibit non-compete agreements that restrict:

  • Movement of a health care practitioner to a new employer
  • A health care practitioner from practicing within a geographic area

It would also permit health care practitioners to notify their patients as to their new affiliation.

Additionally, the bill would require the previous employer to make available to the separating health care practitioner all contact information and existing electronic medical records of the prior patients of the health care practitioner.

Next steps

Policy passed by physician and medical student delegates at PAMED’s annual House of Delegates meeting directs PAMED to seek legislation prohibiting non-compete restrictive covenants in employment contracts. We support HB 2636 and will continue to urge lawmakers to pass this bill.

We will closely monitor the status of the legislation and share any status changes with our members.

9 comments

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  1. Pennsylvania Medical Society | Jul 07, 2020

    Thanks Drs. McNamara. Hannum, and Sutton for your recent comments. Our Government Relations team has reached out to each of you with a response via email. 

    If you have further questions, please don't hesitate to reach out to our Knowledge Center at 855-726-3348 or KnowledgeCenter@pamedsoc.org.

  2. Robert McNamara | Jul 05, 2020
    The core reason to eliminate restrictive covenants is that they can disrupt the physician-patient relationship.  As physicians we are ethically bound to do what is best for patients.  Restrictive covenants can result in a patient not being able to see a trusted doctor who has a deep knowledge of the patient and how best to treat them.  Thanks to the PaMedSoc for supporting this.  In my specialty of EM they not only affect the patients but the physicians and their families as the large corporations that staff many of our state’s EDs routinely use these and enforce them.  When they lose the contractthe physicians have to leave the hospital as well.
  3. Christopher Hannum | Jul 03, 2020
    Christopher F. Hannum, M.D. Ironically on the eve of Independence Day I recommend that all physician employees be unrestricted free agents who are able to seek other employment or establish their own practice any time any place any where for any reason or no declared reason at all.
  4. John Gallagher | Jul 03, 2020

    Thank you Dr. Molden and others for your comments. Your Board is well aware of the mixed feelings of Pennsylvania             physicians on this subject, having heard from many private practitioners and groups facing economic issues with recruitment and retention. PAMED will be working with all parties to find comon ground protecting both employed physicians and their     patients as well as physician employers who have made significant economic investments in recruiting. There is much work to be done and your Board appreciates members’ continued engagement and comments on the issue.

  5. Charles Sutton | Jul 02, 2020

       We physicians need to be aware of contracts that are made behind our backs, between a recruiting agency or employment group and the health care provider. This can act as a Non-Compete clause, preventing a physician from working at the same health care institution or an institution that is affiliated.

      For example, consider a locum tenens physician who practices in Pennsylvania. There is usually a Non-Compete clause in the contract between the locums and the locum tenens agency. I believe that this new law states that a Non-Compete clause could apply for the exact position that they fulfill, but the law should not apply to all of the related institutions in the state, or other positions that the employment agency represents. But there is a blind spot that is missing: an employment agency (e.g., locum tenens agency) can have exclusive representation of a physician at the employing institution (eg, hospital). So, even if a law is passed with a Non-Compete clause, an agency can tell the hospital and all of its affiliated institutions that they can't employ that physician unless its through the same agency. 

      Can the law be written to protect Pennsylvania physicians from agreements that healthcare businesses write behind our backs?

  6. Pierre-Alain L. Dauby | Feb 29, 2020

    I Agree with Dr. Molden.    I get it for large institutions such as UPMC and AGH.    But for a private practice practitioner (like me), this would be a huge detriment.   I am the only physician in Western PA who treats food allergies with food oral immunotherapy.  I have patients who travel 5-6 hours to see me.  I am not going to hire another physician to join me if he/she can just leave a few months after I train them to open up practice next door.  

    There needs to be some sort of clause for private practices with only a few physicians on staff.

  7. Steve Karp | Feb 28, 2020
    The solution isn't the work around suggested but rather to stop hospital consolidations and limit hospital business to the hospital, in other words, running an ER, an OR for non-ambulatory surgery, and inpatient beds for needed care that can't be given in other facilities. No more buying medical practices, doing outpatient imaging etc. There's no need for any physician to be employed by a hospital or physician group that's actually controlled by a hospital. Hospitals should be required to provide indigent care at 10% of their revenue. Hospitals should be reimbursed accordingly for those services provided. Hospital CEO's should see a reduction in their salary since their work will be drastically curtailed. All talk otherwise is just jiggering government control of medical care.
  8. Richard Goldstein | Feb 27, 2020
    I agree with Dr. Molden that the issue is nuanced. The better compromise would be to forbid the enforcement of a restrctive covenant when the employee is terminated, suspended, or their employment contract is either not renewed or renewed only in a less favorable way. No employer should ever have the right to not only end your livelihood with them, but also banish you from the area. Likewise, patients should always have a right to their physician and not be bound by their physician's employer.
  9. Stephanie M. Molden | Feb 27, 2020
    i get the issue here with largeinstitutions but this is tough for those of us considering hiring for private practice.  Im afraid without this protection our own hospital systems will  lure our physicians away with deeper pockets.  I think we need am exception to protect private practices. 

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