SB 657

This bill makes changes regarding covenants not to compete for advanced practice registered nurses, advanced practice nurse prescribers, physicians, physician assistants, and psychologists (“medical practitioners”).

Under current law, a covenant by an assistant, servant, or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of the employment or agency, within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal. A covenant not to compete that imposes an unreasonable restraint, however, is illegal, void, and unenforceable even as to any part of the covenant that would be a reasonable restraint.

The bill provides that a covenant by a medical practitioner not to compete with his or her employer after the termination of the employment imposes an unreasonable restraint and is illegal, void, and unenforceable if the covenant includes a restriction that prohibits working as a medical practitioner for more than 24 consecutive months after the first day of the medical practitioner’s employment with the employer that is imposing the covenant not to compete. The bill also provides that a covenant not to compete by a medical practitioner is illegal, void, and unenforceable if the medical practitioner’s employment is terminated for any reason by the medical practitioner’s employer.