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July 20, 2016

Rhode Island Prohibits Physician Non-Competes

By Kelly McGee

On July 12, 2016, Rhode Island Governor Gina Raimondo signed into law a bill prohibiting non-competition language in most physician agreements. The new statute prohibits virtually any restriction on a physician’s right to practice medicine in any agreement creating an employment, partnership or other professional relationship. The law provides examples of the type of restrictions that are prohibited, including geographic limitations and limitations on a physician’s right to solicit or establish a physician/patient relationship with any current patient of the employer. However, non-competition language is permitted in connection with the purchase and sale of a physician practice, provided that the restriction is for no more than five years.

The enactment of this law comes on the heels of a recent Rhode Island Superior Court decision that cast doubt on the ability of health care companies to prevent departing physicians from establishing competing practices through the use of restrictive covenants in employment agreements. In Medicine and Long Term Care Associates, LLC v. Khurshid, Judge Michael A. Silverstein held that public policy concerns rendered restrictive covenants against doctors invalid. The strong public interest identified by the court was in “allowing individuals to retain health care service providers of their own choice.” The judge asserted that this public interest outweighs the professional benefits of restrictive covenants.

With this new statutory language, Rhode Island joins several other states, including Massachusetts, in prohibiting non-competes for physicians. The law goes into effect immediately.

About the Authors

Kelly McGee

Kelly McGee is a Rhode Island attorney providing general corporate and regulatory legal services, as well as strategic advice, to healthcare clients. You can find her on LinkedIn.

Adelita Orefice

Adelita Orefice is an attorney in Barrett & Singal’s Providence office where she focuses on healthcare and corporate law.

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