Health care noncompete terms redefined

Summary#

LD 2200, An Act Relating to Noncompete Agreements Between Employers and Health Care Practitioners, amends Maine’s existing noncompete law, 26 MRSA §599-A. Its stated goal is not provided in the bill text; the changes address when certain agreements can take effect and what they must recognize.

• It defines a “health care practitioner” as someone qualified or licensed under state law to provide health care services in Maine.
• An enforceable noncompete between an employer and a health care practitioner must recognize an individual’s right to choose their own health care practitioner.
• The amended wording appears to replace an exception from the waiting period for allopathic and osteopathic physicians with an exception for health care practitioners generally. The current law text was not supplied, so that comparison could not be verified against the full statute.
• It adds a category to subsection 3 for a practitioner employed by an entity in which that practitioner has no ownership interest. The supplied text does not show what subsection 3 does, so its legal effect is unclear.
• The changes apply to noncompete agreements entered into or renewed on or after the Act’s effective date.

What it means for you#

• Health care practitioners: The bill appears to remove the rule that a noncompete’s terms cannot take effect until after one year of employment or six months after signing, whichever is later, for practitioners covered by the new exception. It does not state a replacement start date.
• Employers and practitioners: An enforceable noncompete between them must recognize an individual’s right to choose their own practitioner. The bill does not specify wording or a process for doing that.
• People choosing a health care practitioner: The agreement must recognize this choice, but the text does not explain how that requirement works in practice.
• People with existing agreements: The bill applies to agreements entered into or renewed on or after its effective date. The effective date is not given in the supplied material.

Money#

No cost information is in the available material.

• The bill does not specify public spending, fees, fines, or an estimate of employer or practitioner costs.
• Employers may need to adjust agreements to meet the new terms, but the bill gives no cost estimate.

What is unclear#

• The existing text of 26 MRSA §599-A was not supplied. I could not verify the law’s current rules or the effect of adding the new category to subsection 3.
• “Qualified” is not defined, and the bill does not explain which health care roles fall within it.
• The bill does not specify how an agreement must recognize a person’s choice of practitioner or what happens if it does not.
• The effective date is not stated in the supplied material.
• The bill does not explain how the subsection 3 category relates to the other rules governing noncompete agreements.

Case for#

• A possible argument for the bill is that it recognizes a person’s choice of health care practitioner as a condition of enforcing these agreements.
• Removing the waiting period for health care practitioners could give employers and practitioners more flexibility about when agreement terms take effect.
• The new definition may make the rule apply to a wider range of health care practitioners than the physician categories named in the prior wording.

Case against#

• Removing the waiting period could mean a practitioner’s noncompete terms take effect sooner, with less time before those terms apply.
• The bill does not explain how the choice-of-practitioner requirement will be met or enforced, which could leave its practical effect uncertain.
• The new subsection 3 category depends on whether the practitioner has an ownership interest in the employing entity, but the supplied text does not show what legal consequence that category has.