Pennsylvania Limits Noncompete for Certain Health Care Workers
Pennsylvania is joining the legislative bandwagon to limit noncompetition agreements for certain health care workers. In a purported effort to retain health care practitioners for the commonwealth and promote continuity of care for patients, Gov. Josh Shapiro signed the Fair Contracting for Health Care Practitioners Act into law on July 17, 2024. In addition to narrowing the scope of noncompete in certain limited instances, it imposes a separate patient notice requirement following the “departure” of a health care practitioner. The act is not effective until January 1, 2025. The act:
· Prohibits noncompete covenants for more than one year in length in certain circumstances
· Prohibits the enforcement of a noncompete covenant against a health care practitioner if the health care practitioner is “dismissed”
· Permits an employer to recover certain reasonable expenses “related to relocation, training and establishment of a patient base” but prohibits recovery if the health care practitioner is “dismissed”
· Permits noncompete covenants related to sales or merger of a business entity
· Permits noncompete covenants where the health care practitioner receives by purchase, grant, award or issuance of an ownership interest in a “business entity”
· In addition, the act requires an employer to notify “patients seen within the past year” of: (1) the “departure” of a health care practitioner, (2) how to transfer patient records to “departed health care practitioner or another health care practitioner” and (3) “that the patient may be assigned to a new health care practitioner within the existing employer if the patient chooses to continue receiving care from the employer.” An employer is required to provide these notifications within 90 days of the health care practitioner’s departure. However, the notification requirement applies only where the health care practitioner had an “ongoing outpatient relationship with the patient for two or more years.”
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