As anticipated, following the end of the Federal Trade Commission’s proposed rule prohibiting employer noncompetes, states have ramped up their efforts toward limiting noncompete agreements, including some states that have specifically focused on health care noncompetes.
We previously reported in 2024 that Pennsylvania passed The Fair Contracting for Health Care Practitioners Act that prohibited the enforcement of certain noncompete covenants entered into by health care practitioners and employers. Now, Louisiana, Maryland, and Indiana join the list of states limiting, or attempting to limit, the use of noncompete agreements in the health care industry.
Louisiana
On January 1, 2025, Act No. 273 (f/k/a Senate Bill 165) (the “Act”) became effective following Governor Jeff Landry’s approval. The Act enacts three subsections to Section 23:921, M, N, and O, which, as discussed further below, generally limit the timeframe and geographical scope of noncompetes for primary care and specialty physicians.
Subsection (M) of the Act prohibits agreements that restrain a primary care physician—defined as “a physician who predominantly practices general family medicine, general internal medicine, general pediatrics, general obstetrics, or general gynecology”—from practicing medicine for more than three years from the effective date of the initial contract or agreement. A subsequent agreement between the employer and primary care physician after the three-year term cannot include a...
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