| 1 | 1 | | 24 LC 33 9659 |
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| 2 | 2 | | House Bill 1490 |
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| 3 | 3 | | By: Representative Newton of the 127 |
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| 4 | 4 | | th |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | To amend Article 4 of Chapter 8 of Title 13 of the Official Code of Georgia Annotated, |
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| 9 | 9 | | 1 |
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| 10 | 10 | | relating to restrictive covenants in contracts, so as to prohibit the enforcement of certain2 |
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| 11 | 11 | | covenants and restrictions on physicians in employment or partnership contracts or3 |
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| 12 | 12 | | agreements; to delineate covenants not to compete which are valid and enforceable; to4 |
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| 13 | 13 | | provide for statutory construction; to provide for adjudication; to provide for an effective5 |
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| 14 | 14 | | date and applicability; to provide for related matters; to repeal conflicting laws; and for other6 |
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| 15 | 15 | | purposes.7 |
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| 16 | 16 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 |
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| 17 | 17 | | SECTION 1.9 |
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| 18 | 18 | | Article 4 of Chapter 8 of Title 13 of the Official Code of Georgia Annotated, relating to10 |
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| 19 | 19 | | restrictive covenants in contracts, is amended by adding a new Code section to read as11 |
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| 20 | 20 | | follows:12 |
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| 21 | 21 | | "13-8-60. |
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| 22 | 22 | | 13 |
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| 23 | 23 | | (a) Any contract or agreement that creates or establishes the terms of a partnership,14 |
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| 24 | 24 | | employment, or any other form of professional relationship with a physician licensed to15 |
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| 25 | 25 | | practice medicine that includes any restriction of the right of such physician to practice16 |
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| 26 | 26 | | H. B. 1490 |
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| 27 | 27 | | - 1 - 24 LC 33 9659 |
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| 28 | 28 | | medicine in Georgia shall be void and unenforceable with respect to said restriction. 17 |
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| 29 | 29 | | Restrictions rendered void under this subsection shall include, but shall not be limited to:18 |
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| 30 | 30 | | (1) The right to practice medicine in any geographic area for any period of time after the19 |
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| 31 | 31 | | termination of such partnership, employment, or professional relationship;20 |
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| 32 | 32 | | (2) The right of such physician to provide treatment, advise, consult with, or establish21 |
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| 33 | 33 | | a physician/patient relationship with any current patient of the former employer, partner,22 |
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| 34 | 34 | | or healthcare professional/entity; and23 |
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| 35 | 35 | | (3) The right of such physician to solicit or seek to establish a physician/patient24 |
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| 36 | 36 | | relationship with any current patient of the former employer, partner, or healthcare25 |
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| 37 | 37 | | professional/entity.26 |
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| 38 | 38 | | (b) Notwithstanding subsection (a) of this Code section, a covenant not to compete shall27 |
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| 39 | 39 | | be valid and enforceable if:28 |
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| 40 | 40 | | (1) The covenant not to compete is agreed upon during the sale of a business. The29 |
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| 41 | 41 | | person selling the business and the partners, members, or shareholders, and the buyer of30 |
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| 42 | 42 | | the business may agree on a temporary and geographically restricted covenant not to31 |
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| 43 | 43 | | compete that will prohibit the seller of the business from carrying on a similar business32 |
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| 44 | 44 | | within a reasonable geographic area and for a reasonable length of time; or33 |
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| 45 | 45 | | (2) The covenant not to compete is agreed upon in anticipation of the dissolution of a34 |
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| 46 | 46 | | business. The partners, members, or shareholders, upon or in anticipation of a dissolution35 |
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| 47 | 47 | | of a partnership, limited liability company, or corporation, may agree that all or any36 |
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| 48 | 48 | | number of the parties will not carry on a similar business within a reasonable geographic37 |
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| 49 | 49 | | area where the business has been transacted.38 |
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| 50 | 50 | | (c) Nothing in this Code section shall be construed to render void or unenforceable any39 |
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| 51 | 51 | | other provisions in a contract or agreement containing a void and unenforceable covenant40 |
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| 52 | 52 | | not to compete.41 |
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| 53 | 53 | | (d) A provision in an agreement for clinical healthcare services to be rendered by a42 |
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| 54 | 54 | | physician in Georgia is void, unenforceable, and against public policy if the provision:43 |
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| 55 | 55 | | H. B. 1490 |
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| 56 | 56 | | - 2 - 24 LC 33 9659 |
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| 57 | 57 | | (1) Makes the agreement subject to the laws of another state;44 |
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| 58 | 58 | | (2) Requires any litigation or adjudication arising out of the agreement to be conducted45 |
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| 59 | 59 | | in another state; or46 |
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| 60 | 60 | | (3) Deprives the physician of the substantive protection of Georgia law with respect to47 |
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| 61 | 61 | | a controversy arising in Georgia.48 |
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| 62 | 62 | | (e) Any provision of a contract or agreement that violates the provisions of this Code49 |
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| 63 | 63 | | section is voidable at any time by the physician, and if a provision is rendered void at the50 |
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| 64 | 64 | | request of the physician, the matter shall be adjudicated in Georgia and Georgia law shall51 |
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| 65 | 65 | | govern the dispute. In addition to injunctive relief and any other remedies available, a52 |
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| 66 | 66 | | court may award a physician who is enforcing rights under this Code section reasonable53 |
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| 67 | 67 | | attorney fees. For purposes of this Code section, adjudication includes litigation and54 |
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| 68 | 68 | | arbitration. This subsection applies only to claims arising under this Code section."55 |
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| 69 | 69 | | SECTION 2.56 |
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| 70 | 70 | | This Act shall become effective on July 1, 2024, and shall apply to all contracts and other57 |
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| 71 | 71 | | agreements entered into on or after January 1, 2011.58 |
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| 72 | 72 | | SECTION 3.59 |
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| 73 | 73 | | All laws and parts of laws in conflict with this Act are repealed.60 |
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| 74 | 74 | | H. B. 1490 |
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| 75 | 75 | | - 3 - |
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