Labor: fair employment practices; certain noncompete agreements for physicians; prohibit. Amends sec. 4a of 1984 PA 274 (MCL 445.774a).

2025-2026 Regular Session Introduced by Greg Alexander and 11 co-sponsors

Michigan HB 4514 bans noncompetes with physicians; voids existing physician noncompetes; preserves noncompete rules for other workers; impacts hospitals and clinics.

bill electronically reproduced 05/21/2025

#healthoccupations:physicians #labor:fairemploymentpractices

Purpose

HB 4514 would amend section 4a of the Michigan Antitrust Reform Act (1984 PA 274, MCL 445.774a) to prohibit employers from obtaining noncompete agreements from physicians. The bill’s aim is to remove the ability of employers to restrict physicians’ post‑employment practice through noncompete covenants.

Key provisions

Amends MCL 445.774a(1)–(3):

Retains existing language that permits employers to use noncompete covenants that protect "reasonable competitive business interests" for employees generally (reasonable in duration, geographic area, and type of employment/line of business), and allows courts to limit/blue‑pencil unreasonable provisions.
Inserts a new, specific prohibition: an employer shall not obtain a noncompete agreement from a "physician" as defined by section 17001 of the Michigan Public Health Code (1978 PA 368, MCL 333.17001).
Declares noncompete agreements between an employer and a physician that are contrary to this new subsection and that were entered into before the amendatory act to be void.

Applicability:

The bill retains the existing provision that subsection (1) applies to covenants and agreements entered into after March 29, 1985, and clarifies that pre‑existing physician noncompetes contrary to the new prohibition are void.

Who is affected

Directly affected: physicians licensed under the Public Health Code (definition referenced in MCL 333.17001) and their employers (hospitals, health systems, physician practices, clinics, and other entities that employ or contract with physicians).

Indirectly affected: patients, competing medical practices, and health care labor markets (recruitment, retention, practice transitions).

Legal and practical impact

Prohibits the use and enforcement of noncompete clauses against physicians in Michigan; existing physician noncompete agreements that conflict with the prohibition would be void.

Does not change the law governing noncompete agreements for non‑physician employees.

Courts would no longer have authority under this section to limit or enforce physician noncompetes because the statute bars such agreements.

Legislative history / timeline

Filed: March 12, 2025.

Read first time / committee referrals: April–May 2025 (committee consideration, substitute reported favorably on Apr 30).

Placed on General State Calendar: May 14, 2025.

Introduced / reproduced: May 21–22, 2025.

Referred to House Committee on Health Policy (May 21, 2025).

This summary focuses on statutory changes proposed by HB 4514; further analysis of downstream effects (workforce distribution, access to care, contract negotiations) would require empirical study and stakeholder input.

Bill