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General Assembly Raised Bill No. 143
February Session, 2020
LCO No. 1430
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
AN ACT PROHIBITING COVENANTS NOT TO COMP ETE INVOLVING
PHYSICIANS.
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 Section 20-14p of the general statutes is repealed and the 1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, 2020): 2
(a) [For purposes of] As used in this section, [: (1) "Covenant not to 3
compete"] "covenant not to compete" means any provision of an 4
employment or other contract or agreement that creates or establishes a 5
professional relationship with a physician licensed pursuant to this 6
chapter and restricts the right of [a] the physician to practice medicine 7
in any geographic area of the state for any period of time after the 8
termination or cessation of such partnership, employment or other 9
professional relationship. [; (2) "physician" means an individual licensed 10
to practice medicine under this chapter; and (3) "primary site where 11
such physician practices" means (A) the office, facility or location where 12
a majority of the revenue derived from such physician's services is 13
generated, or (B) any other office, facility or location where such 14
physician practices and mutually agreed to by the parties and identified 15 Raised Bill No. 143
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in the covenant not to compete.] 16
(b) [(1) A] Any covenant not to compete [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 as 19
necessary to protect such business interest; and (C) otherwise consistent 20
with the law and public policy. The party seeking to enforce a covenant 21
not to compete shall have the burden of proof in any proceeding. 22
(2) A covenant not to compete that is entered into, amended, 23
extended or renewed on or after July 1, 2016, shall not: (A) Restrict the 24
physician's competitive activities (i) for a period of more than one year, 25
and (ii) in a geographic region of more than fifteen miles from the 26
primary site where such physician practices; or (B) be enforceable 27
against a physician if (i) such employment contract or agreement was 28
not made in anticipation of, or as part of, a partnership or ownership 29
agreement and such contract or agreement expires and is not renewed, 30
unless, prior to such expiration, the employer makes a bona fide offer to 31
renew the contract on the same or similar terms and conditions, or (ii) 32
the employment or contractual relationship is terminated by the 33
employer, unless such employment or contractual relationship is 34
terminated for cause. 35
(3) Each covenant not to compete entered into, amended or renewed 36
on and after July 1, 2016, shall be separately and individually signed by 37
the physician.] that is entered into, amended, extended or renewed on 38
or after July 1, 2020, shall be void and unenforceable. The party seeking 39
to enforce a covenant not to compete, entered into, amended, extended 40
or renewed prior to July 1, 2020, shall have the burden of proof in any 41
proceeding. 42
(c) The remaining provisions of any contract or agreement that 43
includes a covenant not to compete that is rendered void and 44
unenforceable, in whole or in part, under the provisions of this section 45
shall remain in full force and effect, including provisions that require 46
the payment of damages resulting from any injury suffered by reason of 47 Raised Bill No. 143
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termination of such contract or agreement. 48
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2020 20-14p
Statement of Purpose:
To prohibit covenants not to compete involving physicians.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]