While the FTC’s efforts to ban noncompete enforcement have failed, to date, Pennsylvania is taking steps to limit the scope of certain non-competes in the healthcare industry.
On July 23, 2024, Pennsylvania’s Governor — Josh Shapiro — signed into law the Fair Contracting for Health Care Practitioners Act (the “Act”). The Act expressly bans the enforcement of noncompete covenants — including the patient non-solicitation provisions — as between an employer and a “health care practitioner” (defined below). For those people, the work restriction cannot exceed one year in duration and (2) the outgoing employee must have left on her own. In other words, a “health care practitioner’s” non-compete cannot exceed one year and the employer cannot enforce the noncompete against any “practitioner” it fired.
The Act goes into effect on January 1, 2025.
The Rationale For Limiting Healthcare Non-Competes in PA
The PA legislature has set forth its rationale which includes: “patient access to health care in this Commonwealth often depends on geography, transportation and availability of practitioners. The legislature also found: “consolidated hospital systems increasingly stretch over broad geographic regions.” Additionally, “[m]ost rural areas of Pennsylvania can be considered health care deserts in which patients must travel two or three hours for their basic health care needs. The legislature also cited the importance of “continuity of healthcare” and “[this] Commonwealth cannot afford to continue losing health care practitioners to surrounding states and must do more to attract and retain them.
Who is a “Health Care Practitioner” Per the Act?
The Act defines a “Health care practitioner” as:
(1) A medical doctor,
(2) A doctor of osteopathy,
(3) A certified registered nurse anesthetist,
(4) A certified registered nurse practitioner, or
(5) A physician assistant as defined in section 2 of the Osteopathic Medical Practice Act or section 2 of the Medical Practice Act of 1985.
Note that the Act fails to provide any protection for anyone not listed above. Thus, for example, the Act fails to protect administrators, medical assistants, laboratory techs, and nurses not “certified.”
How Employers Must Notify Patients About the Outgoing Worker
The Act also provides how the health care employer must notify patients of the out-going heath care practitioner:
(a) Patient notification.–Following the departure of a health care practitioner from an employer, the employer shall notify the health care practitioner’s patients seen within the past year of the following:
(1) The health care practitioner’s departure.
(2) If the patient chooses to receive care from the departed health care practitioner or another health care practitioner, how the patient may transfer the patient’s health records to a health care practitioner other than with the employer.
(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.
When Must the Employer Notify Patients About the Outgoing Practitioner?
The Act speaks directly to this point:
(b) Time period.–The employer shall provide the notice within 90 days of the health care practitioner’s departure.
(c) Applicability.–The notification requirement shall apply to a health care practitioner with an ongoing outpatient relationship with the patient of two or more years.
Many Patients Are Exempt From Notice
The Act also provides:
(c) Applicability.–The notification requirement shall apply to a health care practitioner with an ongoing outpatient relationship with the patient of two or more years.
Will the Act Survive Appellate Review?
The answer is: yes. Unlike the FTC’s attempt to ban noncompetes generally failed for want of authority by the FTC, PA’s legislature does possess the power to limit noncompete enforcement in PA. In fact, the PA legislature and Governor could sign into a law a banning all non-compete enforcement in PA.
Let’s Get Started!
Contact a Pittsburgh lawyer at our firm for any noncompete claim or defense in Western PA.
412.342.0992
