By Greg Care
Non-compete clauses have been a contentious and ever-developing situation in employment usually, together with for physicians and different well being care suppliers. Non-competes, as they’re generally identified, are contractually-binding guarantees by a employee to not work for or personal a enterprise that’s engaged in primarily the identical work they do for his or her current employer for some time period after the employment relationship ends and in a prescribed geographic space.
As I’ve written on different events, the Federal Commerce Fee (FTC) has proposed a near-total ban on non-competes nationwide and the Nationwide Labor Relations Board’s normal counsel has opined that, besides in restricted circumstances, non-compete agreements violate the Nationwide Labor Relations Act.
In a momentous transfer, the Maryland Basic Meeting has simply handed laws (HB 1388) that will, in some circumstances, completely ban or not less than considerably restrict non-competes for physicians, well being care staff, and veterinarians in Maryland. To change into legislation, the laws should nonetheless be signed by Governor Wes Moore or 30 days should cross with out his veto. Contemplating the invoice handed the legislature with robust bipartisan help, it’s unlikely to face a veto.
As of this writing, the Basic Meeting has not revealed the enrolled invoice, however my monitoring of the amendments of the unique invoice leads to the next key takeaways on what HB 1388 does:
- Beginning with contracts signed on or after July 1, 2025:
- Non-competes are banned for workers licensed below the Well being Occupations Article (e.g., docs, nurse practitioners, nurses, midwives, dentists, pharmacists, psychologists, optometrists, and many others.) who work ready that “supplies direct affected person care” and earn “whole annual compensation” of $350,000 or much less.
- Non-competes are restricted for workers licensed below the Well being Occupations Article who work ready that “supplies direct affected person care” and earn “whole annual compensation” of greater than $350,000. The boundaries are that the non-compete can’t be efficient: (a) for multiple yr after employment ends, or (b) in a geographical space greater than 10 miles from the first place of employment. When sufferers request, employers have to tell them the place their former supplier has begun practising.
- Whereas the laws doesn’t outline “whole annual compensation,” the Senate Finance Committee mentioned that this might embody solely wage and never advantages.
- As famous above, the laws addresses solely Well being Occupations Article-licensed staff’ contracts signed on or after July 1, 2025. The unique invoice known as for the laws to have retroactive impact in order to use to present contracts (much like what the FTC has proposed), however that was eliminated by modification to deal with considerations about “impairment of contracts.”
- Non-competes are banned for workers licensed as veterinary practitioners or veterinary technicians below Title 2, Subtitle 3 of the Agriculture Article, presumably for contracts signed after the laws’s efficient date of June 1, 2024. There is no such thing as a compensation cap in play.
- Primarily based on the committee voting session discussions, there’s the potential for an expanded ban sooner or later relying on how this legislative effort works in apply. Additional, the laws requires examine of a number of points, together with the impact of personal fairness corporations on the well being care market within the State.
This is a vital step ahead within the reform of non-compete clauses that every one too usually have a deleterious impact on our well being care workforce and the general public. Whereas it isn’t excellent or rapid, it’s actually an enchancment that, if signed (or not vetoed) by the Governor, ought to make an actual distinction for an important many suppliers and sufferers. All the identical, I predict that there shall be fights forward about how this laws is interpreted.
When you’ve got questions concerning non-competes in your state of affairs, please contact us at present to see if we will help together with your explicit circumstances.
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