LA Senate passes restrictions on noncompetes for primary care physicians

As we mentioned in our previous article, the healthcare industry anticipates a significant impact from the Federal Trade Commission’s (FTC) final rule banning noncompetes (see “Healthcare industry diagnoses impact of FTC’s noncompete rule”). We discussed the effects many argue noncompetes have on the healthcare space. Specifically, while some physician groups argue the prevalence of noncompetes in the healthcare industry contributes to physician shortages, other industry groups that represent rural hospitals argue they are necessary to protect the investment those small communities make in desperately needed new physicians. On April 8, 2024, the Louisiana Senate unanimously passed Senate Bill (SB) 165, a piece of legislation that seemingly takes both of these conflicting concerns into account.

Details

SB 165 would require that noncompetes in most primary care physician employment agreements expire after the physician has completed three years of service. It would also restrict the application of noncompetes for primary care physicians to three contiguous parishes in which the employer carries on a “like business.” These three parishes must be specified in the physician’s written agreement.