New Restrictions on Noncompete Agreements for Certain Health Care – Expanding Similar Restrictions for Veterinary Professionals
By: Adam Konstas, Esquire and Riley Fick, PK law Summer Intern
House Bill (HB) 1388, enacted April 6th, 2024, and signed into law by the Governor on April 25th, 2024, amends Section 3-716 of Maryland’s Labor and Employment Article (which currently prohibits noncompete agreements for Maryland employees earning less than 150 percent of the state minimum wage, ~$46,800 per year) to impose broader limitations on noncompete agreements within the health care sector.
HB 1388 took effect on June 1, 2024. So, since June 1, 2024, the law voids all non-competes and conflict of interest arrangements in contracts with veterinary practitioners and veterinary technicians licensed under Title 2, Subtitle 3 of Maryland’s Agriculture Article. However, the restrictions described below will apply only to contracts for employment implemented on or after July 1, 2025. These added restrictions apply specifically to health care professionals, excluding veterinary practitioners and veterinary technicians, and are decided based on the total annual compensation earned by the individual practitioner.
Health Care Professionals Earning $350,000 or Less in Total Annual Compensation: Under the new law, any noncompete or conflict of interest clause in an employment agreement is void and unenforceable for individuals who meet all the following criteria *(1) Is required to hold a professional license under the Maryland Health Occupations Article; (2) Is employed in a role that involves the direct provision of patient care; and (3) Receives total annual compensation of $350,000 or less.
Health Care Professionals Earning More Than $350,000 in Total Annual Compensation: For individuals who satisfy conditions (1) and (2) above but whose total annual compensation exceeds $350,000, non-competes are not prohibited but these limitations apply: (1) The duration of any such restriction shall not exceed a period of one (1) year following the termination of employment; (2) The geographic scope of any such restriction shall be limited to a radius of ten (10) miles from the individual’s primary place of employment; and (3) Upon termination of the individual’s employment, the employer is obligated to notify the individual’s patients of the practitioner’s new practice location.
In response to Maryland’s enactment of HB 1388, healthcare employers should review and update employment agreements for both health care and veterinary staff to ensure compliance with the new restrictions on noncompete and conflict of interest provisions.
To ensure compliance with new Maryland employment restrictions, contact a PK Law Labor and Employment attorney.
If you have additional questions regarding Maryland’s Time to Care Act or any other federal or state labor and employment laws contact PK Law’s Labor and Employment Group.
* List of healthcare practitioners who are required to hold a professional license under the Maryland Health Occupations Article:
- acupuncturists
- audiologists
- hearing aid dispensers
- speech-language pathologists
- music therapists
- chiropractors
- dentists
- licensed dietitian-nutritionists
- massage therapists
- morticians
- funeral directors
- nurses
- nursing home administrators
- occupational therapists
- optometrists
- pharmacists
- physical therapists
- physicians
- physician assistants
- podiatrists
- professional counselors and therapists
- psychologists
- social workers
- resident childcare program professionals
- environmental health specialists
Adam E. Konstas is a Member with PK Law. He represents local school boards, superintendents, private schools, colleges, and private sector employers before federal and state courts as well as federal and state administrative agencies on a variety of matters, including employment discrimination claims, employee (and student) discipline, labor relations, and wage/hour claims. Mr. Konstas also advises clients on the design and implementation of policies and procedures regarding employee (and student) relations, employee handbooks, hiring and termination procedures, as well as school system-wide policy issues including the use of online instructional tools and cloud computing, student data privacy, anti-discrimination. He can be reached at 410-339-5786 and akonstas@pklaw.com.
Special thanks to PK Law Summer Intern, Riley Fick, for her assistance with drafting this article. Riley is a Rising Senior, University of Maryland, College Park.Â
