The law with regard to Non-Compete clauses has changed in Connecticut, for physicians, as of 2016. The new law is below.
Sec. 20-14p. Covenants not to compete involving physician. (a) For purposes of this section: (1) “Covenant not to compete” means any provision of an employment or other contract or agreement that creates or establishes a professional relationship with a physician and restricts the right of a physician to practice medicine in any geographic area of the state for any period of time after the termination or cessation of such partnership, employment or other professional relationship; (2) “physician” means an individual licensed to practice medicine under this chapter; and (3) “primary site where such physician practices” means (A) the office, facility or location where a majority of the revenue derived from such physician’s services is generated, or (B) any other office, facility or location where such physician practices and mutually agreed to by the parties and identified in the covenant not to compete.
(b) (1) A covenant not to compete is valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.
(2) A covenant not to compete that is entered into, amended, extended or renewed on or after July 1, 2016, shall not: (A) Restrict the physician’s competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices; or (B) be enforceable against a physician if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
(3) Each covenant not to compete entered into, amended or renewed on and after July 1, 2016, shall be separately and individually signed by the physician.
(c) The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.
Several things to note
- The covenant can be part of a contract, or the covenant can be the whole contract.
- The restriction applies with regard to a physicians right to practice medicine. Therefore, if a physician is doing research, the statute does not apply.
- The restriction only applies if the physician is working within the state of Connecticut.
- a. The statute only permits a restriction which is no longer than 1 year, and no more than 15 miles from the primary site where a physician practices (may be more than one primary site) or
b. any restriction is unenforceable if the employer terminates the physician, unless termination is for cause (legitimate reason for firing – such as drug or alcohol use) or
c. if there was contract not made as part of a partnership agreement (or anticipation to have a partnership agreement)
1. in case agreement ends, either not renewed or expired
a. for non-compete to be enforceable – need offer of continued contract
on same or similar terms
Examples –
4.a – non compete provides for no work within 30 miles – too far distance
4.a – non compete provides for no work for 3 years – too long of time
4.b. non compete and termination for no reason – unenforceable
4.b. non compete and termination after allegations of patient abuse- enforceable
4.c – contract without anticipated of partnership agreement – if no subsequent offer – unenforceable.
Whether or not you are physician, Courts do not always enforce non-compete clauses, often finding that such a clause is an improper restraint on trade.
If you have any questions about non-compete clauses, please feel free to contact
Attorney Robert M. Singer, 2752 Whitney Avenue, Hamden, CT 06518
203-248-8278 rsingerct@yahoo.com
Serving New Haven County and all of Connecticut