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General Assembly Committee Bill No. 377
January Session, 2019
LCO No. 5924
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
AN ACT PROHIBITING THE USE OF NONCOMPETE CLAUSES IN
PHYSICIAN EMPLOYMENT CONTRACTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 20-14p of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2019): 2
(a) For purposes of this section: (1) "Covenant not to compete" 3
means any provision of an employment or other contract or agreement 4
that creates or establishes a professional relationship with a physician 5
and restricts the right of a physician to practice medicine in any 6
geographic area of the state for any period of time after the termination 7
or cessation of such partnership, employment or other professional 8
relationship; (2) "physician" means an individual licensed to practice 9
medicine under this chapter; and (3) "primary site where such 10
physician practices" means (A) the office, facility or location where a 11
majority of the revenue derived from such physician's services is 12
generated, or (B) any other office, facility or location where such 13
physician practices and mutually agreed to by the parties and 14
identified in the covenant not to compete. 15 Committee Bill No. 377
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(b) (1) A covenant not to compete that is entered into, amended, 16
extended or renewed prior to July 1, 2019, is valid and enforceable only 17
if it is: (A) Necessary to protect a legitimate business interest; (B) 18
reasonably limited in time, geographic scope and practice restrictions 19
as necessary to protect such business interest; and (C) otherwise 20
consistent with the law and public policy. The party seeking to enforce 21
a covenant not to compete shall have the burden of proof in any 22
proceeding. 23
(2) A covenant not to compete that is entered into, amended, 24
extended or renewed on or after July 1, 2016, until June 30, 2019, shall 25
not: (A) Restrict the physician's competitive activities (i) for a period of 26
more than one year, and (ii) in a geographic region of more than fifteen 27
miles from the primary site where such physician practices; or (B) be 28
enforceable against a physician if (i) such employment contract or 29
agreement was not made in anticipation of, or as part of, a partnership 30
or ownership agreement and such contract or agreement expires and is 31
not renewed, unless, prior to such expiration, the employer makes a 32
bona fide offer to renew the contract on the same or similar terms and 33
conditions, or (ii) the employment or contractual relationship is 34
terminated by the employer, unless such employment or contractual 35
relationship is terminated for cause. 36
(3) Each covenant not to compete entered into, amended or renewed 37
on and after July 1, 2016, until June 30, 2019, shall be separately and 38
individually signed by the physician. 39
(4) On and after July 1, 2019, no employment, partnership or 40
ownership contract or agreement entered into, amended or renewed 41
shall contain a covenant not to compete and each covenant not to 42
compete entered into, amended or renewed on and after said date shall 43
be void and unenforceable. Any physician who is aggrieved by a 44
violation of this subdivision may bring a civil action in the Superior 45
Court to recover damages, together with court costs and reasonable 46
attorney's fees, and for such injunctive and equitable relief as the court 47
deems appropriate. 48 Committee Bill No. 377
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(c) The remaining provisions of any contract or agreement that 49
includes a covenant not to compete that is rendered void and 50
unenforceable, in whole or in part, under the provisions of this section 51
shall remain in full force and effect, including provisions that require 52
the payment of damages resulting from any injury suffered by reason 53
of termination of such contract or agreement. 54
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2019 20-14p
PH Joint Favorable