Physician Non-Competition Agreements in Connecticut

The State of Connecticut is considered an “employment at will” state, which means that an employer does not need to provide, nor even have a reason to terminate an employee unless the employee has a contract for employment.  If an employee has a contract, and even sometimes without a contract, the employee may be asked by the employer to enter into a restrictive covenant also known as a “non-compete,” wherein the employee agrees not to seek employment with a competitor of their employer within a specific geography region and over a specified period of time.  These types of agreements are generally accepted by Connecticut courts if they are reasonable in nature.  However, Connecticut has enacted statutory rules regarding non-competition agreements for physicians.

Under Connecticut General Statute Section 20-14p, a physician non-competition agreement is valid and enforceable only if it is: (A) necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.

The statutory limitations of a physician non-competition agreement continue wherein a covenant not to compete that is entered into, amended, extended or renewed on or after July 1, 2016, shall not: (A) Restrict the physician’s competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices; or (B) be enforceable against a physician if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

Furthermore, the statue also provides limitations on how the non-competition agreement shall be entered.   Each non-competition agreement entered into, amended or renewed on and after July 1, 2016, shall be separately and individually signed by the physician.

If the non-competition provision in any agreement is deemed invalid, Connecticut law provides that the rest of the agreement may remain in full force and effect.  “The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part…shall remain in full force and effect…”  C.G.S. 20-14p(3)(c).

If you are a physician and are faced with a non-competition agreement, or you are an employer seeking to hire a physician and would like to discuss having that physician enter into a non-competition agreement, please call the experienced employment counsel at Harlow, Adams & Friedman, P.C. today at 203-878-0661 for a free consultation.

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