New Bill Would Limit Effect of Non-compete Clauses on PAs in Rhode Island

Posted By American Med Spa Association, Wednesday, January 27, 2021

A new bill filed in Rhode Island would reduce the types of non-compete clauses that can restrict physician assistants (PAs). You can read the complete text of House Bill 5162 (H 5162) here. Its primary sponsor is Representative David Bennett. The bill has been assigned to the House Health, Education and Welfare Committee for further deliberation.
H 5162 would limit the types of restrictive contract covenants that PAs could be subject to in their employment agreements. In general, any clause that limits the right of the PA to practice would be void. Under H 5162, the following types of restrictions would be unenforceable:
These types of restrictions would be void in any type of employment or partnership agreement with one exception: If the restriction is part of a purchase and sale of a practice, the non-compete covenants can apply, but for no longer than five years. In effect, PAs could not be restricted from practicing anywhere after leaving a job unless they were selling their practice.
There has been a common trend to reduce or prohibit the use of restrictive covenants in employment situations for professionals. This trend is more common in health care fields, as states have an interest in improving access to medical care for their citizens.
We will be monitoring H 5162 as it works its way through Rhode Island’s legislative process this year.