State legislatures across the United States have sharply accelerated efforts to limit restrictive covenants for healthcare professionals, producing a fragmented and rapidly shifting legal landscape.
A review of legislation enacted over the past two years reveals that fourteen states have passed laws restricting the use of noncompete agreements in the healthcare sector.
The resulting framework is, as legal analysts at Proskauer Rose LLP describe it, “a patchwork quilt,” with laws varying significantly in scope and the practitioners they cover.
Despite these differences, several overarching trends have emerged that suggest legislatures increasingly agree that patient access and continuity of care should outweigh post-employment restraints.
Some states have moved toward outright prohibition, with Arkansas, Indiana, Utah, and Colorado adopting categorical or near-categorical bans on noncompetes for healthcare practitioners.
In 2025, Colorado banned all noncompete agreements for healthcare providers that restrict their ability to practice, while Utah banned such agreements for a broad range of healthcare workers.
Other states have taken a narrower approach, with Maryland permitting noncompetes for high earners effective up to one year and covering no more than a 10-mile geographic radius.
Texas allows healthcare noncompetes so long as they are limited to one year and a five-mile radius, and include a buy-out option capped at the equivalent of the employee’s annual salary.
Legislatures are also expanding who receives protection, with recent statutes increasingly focusing on a worker’s function rather than their title alone.
Illinois amended its general statute to include a complete ban on noncompetes for individuals providing mental health services to veterans and first responders when enforcement is likely to increase the cost or difficulty of obtaining care.
Maine requires any enforceable healthcare noncompete to recognise an individual’s right to choose a healthcare practitioner, while Utah voids non-solicitation provisions that prevent a healthcare worker from informing a patient of their new workplace.
Pennsylvania requires employers to notify patients of a practitioner’s departure and, if a patient chooses to follow the practitioner, to provide information about transferring the patient’s records.
States are also replacing traditional judicial flexibility with bright-line rules, specifying permissible duration, geographic scope, timing, and economic conditions for any enforceable covenant.
Louisiana permits an initial contract to contain a noncompete of up to three years for a primary care physician and five years for other physicians, calculated from the date the agreement became effective.
While noncompetes are increasingly curtailed, legislatures have not eliminated all post-employment restrictions, with Indiana, Colorado, Pennsylvania, Rhode Island, and Oregon all preserving exceptions related to confidentiality, trade secrets, and business sale transactions.
Legal analysts at Proskauer Rose LLP suggest that state legislatures increasingly view healthcare restrictive covenants not merely as private contracts but as agreements with community-wide consequences for where professionals practice and whether patients can maintain established care relationships.
As healthcare labour shortages persist and access to care remains a legislative priority, restrictive covenant reform in the sector appears to have become part of broader public health policy rather than simply employment law.
National and multi-state healthcare employers are being advised to implement state-specific restrictive covenants rather than relying on uniform approaches that may no longer withstand legal scrutiny.
As noncompetes become more limited, employers may increasingly need to rely on competitive compensation, retention incentives, and carefully tailored confidentiality protections to retain key talent while protecting legitimate business interests.
Future legislation is expected to expand protections to additional licensed healthcare professionals, further regulate patient non-solicitation provisions, and continue replacing common-law standards with detailed statutory requirements.