| 3 | 2 | | *ANS095* 01/28/2025 4:56:08 PM ANS095 |
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| 4 | 3 | | State of Arkansas 1 |
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| 5 | 4 | | 95th General Assembly A Bill 2 |
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| 6 | 5 | | Regular Session, 2025 SENATE BILL 139 3 |
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| 7 | 6 | | 4 |
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| 8 | 7 | | By: Senator J. Boyd 5 |
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| 9 | 8 | | By: Representative Gramlich 6 |
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| 10 | 9 | | 7 |
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| 11 | 10 | | For An Act To Be Entitled 8 |
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| 12 | 11 | | AN ACT TO CLARIFY THAT A COVENANT NOT TO COMPETE 9 |
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| 13 | 12 | | AGREEMENT IS UNENFORCEABLE FOR CERTAIN LICENSED 10 |
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| 14 | 13 | | MEDICAL PROFESSIONALS; AND FOR OTHER PURPOSES. 11 |
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| 15 | 14 | | 12 |
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| 16 | 15 | | 13 |
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| 17 | 16 | | Subtitle 14 |
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| 18 | 17 | | TO CLARIFY THAT A COVENANT NOT TO 15 |
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| 19 | 18 | | COMPETE AGREEMENT IS UNENFORCEABLE FOR 16 |
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| 20 | 19 | | CERTAIN LICENSED MEDICAL PROFESSIONALS. 17 |
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| 21 | 20 | | 18 |
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| 22 | 21 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19 |
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| 23 | 22 | | 20 |
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| 24 | 23 | | SECTION 1. Arkansas Code § 4 -75-101(h), concerning ancillary 21 |
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| 25 | 24 | | agreements and existing common law standards governing covenant not to 22 |
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| 26 | 25 | | compete agreements, is amended to read as follows: 23 |
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| 27 | 26 | | (h)(1) This subsection section does not apply to a covenant not to 24 |
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| 28 | 27 | | compete agreement that is ancillary to other contractual relationships, 25 |
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| 29 | 28 | | including any type of agreement for the sale and purchase of a business, 26 |
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| 30 | 29 | | franchise agreement, and any other agreement not ancillary to an employment 27 |
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| 31 | 30 | | relationship or employment contract. 28 |
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| 32 | 31 | | (2) Existing common law standards governing a covenant not to 29 |
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| 33 | 32 | | compete agreement outside the employment background shall remain in effect. 30 |
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| 34 | 33 | | 31 |
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| 35 | 34 | | SECTION 2. Arkansas Code § 4 -75-101(j), concerning the applicability 32 |
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| 36 | 35 | | of covenant not to compete agreements, is amended to read as follows: 33 |
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| 37 | 36 | | (j) This Except as provided under subsection (k) of this section, this 34 |
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| 38 | 37 | | section shall not: 35 |
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| 39 | 38 | | (1) Be read to impair, limit, or change a party's protections 36 SB139 |
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| 40 | 39 | | |
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| 41 | 40 | | 2 01/28/2025 4:56:08 PM ANS095 |
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| 42 | 41 | | and rights under the Arkansas Trade Secrets Act, § 4-75-601 et seq.; or 1 |
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| 43 | 42 | | (2) Apply to a person holding a professional license under 2 |
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| 44 | 43 | | Arkansas Code Title 17, Subtitle 3. 3 |
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| 45 | 44 | | 4 |
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| 46 | 45 | | SECTION 3. Arkansas Code § 4-75-101, concerning covenant not to 5 |
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| 47 | 46 | | compete agreements, is amended to add an additional subsection to read as 6 |
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| 48 | 47 | | follows: 7 |
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| 49 | 48 | | (k)(1) A covenant not to compete agreement that restricts the right of 8 |
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| 50 | 49 | | a physician to practice within the physician's scope of practice is void. 9 |
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| 51 | 50 | | (2) As used in subdivision (k)(1) of this section, "physician" 10 |
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| 52 | 51 | | means a person authorized or licensed to practice medicine under the Arkansas 11 |
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| 53 | 52 | | Medical Practices Act, § 17 -95-201 et seq., § 17-95-301 et seq., and § 17 -95-12 |
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| 54 | 53 | | 401 et seq., and a person authorized to practice osteopathy under § 17 -91-101 13 |
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| 55 | 54 | | et seq. 14 |
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| 56 | 55 | | 15 |
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| 57 | 56 | | 16 |
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