Louisiana lawmakers have unanimously approved a bill restricting physician noncompete agreements. The legislation heads to Gov. Jeff Landry's desk to be vetoed or signed into law, nola.com reported May 15.
Under Senate Bill 165, physician contracts can only contain noncompete clauses for up to five years depending on physicians' specialties. If physicians exit a position while under a noncompete clause, they would be subject to those agreements for up to two additional years and be barred from practicing medicine in up to three parishes surrounding their employer, according to the report.
Louisiana hospitals can include noncompete clauses in contracts for as long as they want and there is no restriction on the number of parishes the deals can cover under current state law, according to nola.com. Stakeholders who are against noncompetes argue that the clauses prevent physicians from moving freely between jobs and push physicians out of the state.
Last month, the Federal Trade Commission voted to implement a sweeping noncompete ban that would have seismic effects on the healthcare industry. There are questions around which nonprofit hospitals and other providers may be affected by the federal ban and how far the FTC's jurisdiction reaches under its final rule.
Lawsuits challenging the noncompete ban have already begun to roll in, and a lengthy legal battle is likely in the cards.
Becker's has reached out to the Louisiana Hospital Association for comment.