Bill
A 1819
The bill largely voids geographic noncompete covenants in physician contracts after termination to boost mobility, with exceptions for certain large groups and incentives.
Overview
Bill A 1819 seeks to limit the enforceability of restrictive covenants in contracts between licensed physicians and health care employers, by generally voiding provisions that restrict a physician’s right to practice medicine in a geographic area after ending a partnership, employment, or other professional relationship. The bill includes specific carve-outs and sets the effective date to apply to contracts entered into on or after enactment.
Purpose and intent
- To expand physician professional mobility by voiding post-termination geographic restrictions embedded in most physician contracts.
- To balance this broader mobility with targeted exceptions that preserve certain covenants where a patient-care or organizational interest is deemed significant (e.g., large hospital systems, certain incentives).
Key provisions
- Section 1a: With limited exceptions, any contract or agreement creating or establishing the terms of a physician’s partnership, employment, or other professional relationship that imposes a geographic restriction on practicing medicine after termination is void and unenforceable regarding that restriction.
- Section 1b (carve-outs): The bill does not void certain covenants, including:
1) Covenants prohibiting a physician from leaving a hospital system or a group practice of 30+ physicians to join another 30+ physician system within the same geographic area.
2) Covenants prohibiting a physician from leaving a hospital system or group practice with 30 or fewer physicians to join another 30 or fewer within the same geographic area.
3) Covenants preventing a physician from leaving a federally qualified health center (FQHC) to practice within 5 miles of the FQHC for up to 4 years.
4) Covenants restricting departure when the hospital system/group practice provided a clearly identified “unique incentive” to join (see below).
5) Any remaining contract provisions that do not impose a geographic practice restriction.
- Section 1c: Defines “unique incentive” to include items such as starting a new program or service, opening a new laboratory, a signing bonus exceeding $50,000, or opening a new practice group for a hospital system.
- Section 2: Effective immediately; applies to contracts entered into on or after the act’s effective date.
Who is affected
- Licensed physicians entering into contracts of partnership, employment, or other professional relationships with health care providers (hospitals, hospital systems, group practices, and FQHCs).
- Health care employers and organizational sponsors of physician practices, particularly those using geographic non-compete-style covenants.
Legislative status and timeline
- Introduced: January 9, 2024 (Assembly).
- Current status: Returned to Assembly after Senate action (as of the latest entries). The bill has a companion in S 3163 and related S bills (e.g., S 4068), with multiple actions shown, including a Senate passage and substitution for the companion bill on May 22, 2025.
- Notable actions: Passed Senate on May 22, 2025; substituted for S3163; returned to Assembly for potential further action.
Notes and context
- The bill’s formal title, “monarch preservation plan,” appears not to reflect the substantive health-care covenant provisions, which focus on physician practice freedom and contract enforceability.
- If enacted, the bill would join other national trends toward limiting physician non-compete-like restrictions while preserving targeted, consent-based exceptions.
Compiled from official sources — confirm details with the bill’s official record.
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