West Virginia Governor Signs Physicians Freedom of Practice Act Limiting Non-Compete Agreements
On April 26, 2017, West Virginia Governor Jim Justice approved Senate Bill 402, known as the physician non-compete bill. The bill amended the West Virginia Code to add Article 47-11E-1-5, and is titled the Physicians Freedom of Practice Act (“Act”).
The Act limits a non-compete covenant contained in a written agreement between a physician and his or her employer to one (1) year in duration and thirty (30) road miles from the physician’s primary place of practice with the employer. Additionally, a non-compete covenant will be deemed void and unenforceable upon the termination of a physician’s employment by his or her employer. The Act has exemptions for non-competes attendant to certain sales and for contracts between physicians who are shareholders, owners, partners, members or directors of a health care practice.
The Act is limited to employment relationships and does not prohibit non-disclosure and non-solicitation language in physician employment agreements and certain other types of provisions. Section 47-11E-5 of the Act states that it is applicable to any written agreement “between a physician and his or her employer entered into, modified, renewed or extended on or after July 1, 2017.” Physicians, physician organizations, hospitals and other health care organizations will want to make note of this change as they are reviewing existing agreements or negotiating new ones.