Kansas is the latest among a growing number of states to attempt to limit non-competes in the healthcare industry. Senate Bill 504, introduced by state Sen. Michael Murphy (R), aims to prohibit post-employment non-compete agreements, increasing employment mobility and patient access. If enacted, SB 504 would apply to all agreements entered into, renewed, amended, or extended on or after July 1, 2026. The bill would also void existing agreements with prohibited restrictions. Here’s what you need to know about the pending legislation and how it could impact your business if it is ultimately signed into law.
Recent Limits on Restrictive Covenants
Over the past year, several states – including Arkansas, Colorado, Indiana, Montana, New Hampshire, Oregon, Texas, and Wyoming – enacted new laws banning or limiting restrictive covenants for healthcare professionals (though each jurisdiction’s restrictions are slightly different). Missouri lawmakers have recently proposed a similar non-compete ban specific to physicians, although the legislature hasn’t yet passed that measure.
States’ efforts to limit restrictive covenants are set against the backdrop of the Federal Trade Commission’s recent warning to several large healthcare employers and staffing firms urging them to review their non-compete agreements. These bans, alongside the FTC’s efforts, have the power to reshape the healthcare market and require employers to reevaluate their contracts.
Top Takeaways from SB 504
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