Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Restricts use of restrictive employment covenants for physicians and nurses.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning health care professionals and supplementing Title 45 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Except as provided in subsection b. of this section, any contract or agreement that creates or establishes the terms of a partnership, employment, or other form of professional relationship with a licensed physician, which includes any restriction of the right of the physician to practice medicine in any geographic area for any period of time after termination of the partnership, employment, or professional relationship, shall be void and unenforceable with respect to the restriction.
b. Nothing in this section shall be construed to render void or unenforceable:
(1) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice comprising 30 or more physicians to join any other hospital system or group practice comprising 30 or more physicians within a given geographic area;
(2) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice comprising 30 or fewer physicians to join any other hospital system or group practice comprising 30 or fewer physicians within a given geographic area;
(3) a restrictive covenant that prohibits a physician from leaving a federally qualified health center to practice medicine within a 10 mile radius of federally qualified health center for a period of time that is no longer than four years;
(4) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice when the hospital system or group practice provided the physician a unique incentive to join the hospital system or group practice, which incentive is expressly identified in the contract between the physician and the hospital system or group practice; or
(5) any remaining provisions of the contract or agreement that do not establish a restriction on the right to practice medicine in a geographic area.
c. For the purposes of paragraph (2) of subsection b. of this section, the term “unique incentive” may include, but shall not be limited to, commencing a new program or service, opening a new laboratory, providing a signing bonus of more than $50,000, or, in the case of a hospital system, opening a new practice group.
2. This act shall take effect
immediately, and shall apply to contracts and agreements entered into by
physicians on or after the effective date of this act.
STATEMENT
Except as provided below, this bill provides that any contract or agreement that creates or establishes the terms of a partnership, employment, or other form of professional relationship with a licensed physician, which includes any restriction of the right of the physician to practice medicine in any geographic area for any period of time after termination of the partnership, employment, or professional relationship, is to be void and unenforceable with respect to the restriction.
Nothing in the bill is to be construed to render void or unenforceable: (1) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice comprising 30 or more physicians to join any other hospital system or group practice comprising 30 or more physicians within a given geographic area; (2) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice comprising 30 or fewer physicians to join any other hospital system or group practice comprising 30 or fewer physicians within a given geographic area; (3) a restrictive covenant that prohibits a physician from leaving a federally qualified health center to practice medicine within a 10 mile radius of federally qualified health center for a period of time that is no longer than four years; (4) a restrictive covenant that prohibits a physician from leaving a hospital system or a group practice when the hospital system or group practice provided the physician a unique incentive to join the hospital system or group practice, which incentive is expressly identified in the contract between the physician and the hospital system or group practice; or (5) any remaining provisions of the contract or agreement that do not establish a restriction on the right to practice medicine in a geographic area.