Physician non-compete law changes

Under AB 1697 (Stats. 2026, ch. 889), contracts entered on or after this date may not require a worker to repay a debt or pay a fee, cost or penalty when employment ends (stay-or-pay terms); such terms are void under § 16600. Exceptions include qualifying discretionary sign-on or retention bonuses in a separate agreement and government loan-repayment or grant-funded recruitment programs.

Freedom to Work Act earnings threshold for covenants not to compete rises from $75,000 to $80,000 (non-solicit threshold from $45,000 to $47,500), per 820 ILCS 90/10 as already enacted.

ESHB 1155 (Laws of 2026, ch. 149): all noncompetition covenants become void regardless of when signed. Customer or patient nonsolicitation of up to 18 months, confidentiality, trade-secret and 1%+ ownership-sale covenants remain allowed. Employers must notify affected current and former workers by Oct. 1, 2027.

Since July 29, 2026, employers may not require or permit noncompetes with health care practitioners, including physicians, lacking an ownership interest in the employing entity; applies to agreements entered or renewed on or after that date. Owners' noncompetes must be reasonable and recognize patient choice.

Statute deems healthcare-provider noncompetes reasonable if written, two years or less, and limited to the greater of 10 miles or the county (or to the employer's facilities). Emergency physicians excluded. A 2026 general law adds time presumptions and bans noncompetes for employees earning under $70,000.

Voids any provision restricting where or for how long a licensed health care provider, including a physician, may practice after leaving, in contracts entered into on or after July 1, 2026. Also voids limits on telling patients about a move.

For agreements entered into or renewed on/after July 1, 2026, employers may not enter into, enforce, or threaten to enforce noncompetes with health care professionals, including physicians. Sale-of-business covenants, recruitment-cost repayment, and limited customer non-solicitation provisions remain allowed.

No general noncompete statute; courts apply reasonableness. A 2026 law requires a policy barring noncompetes in University of Iowa Hospitals and Clinics employment contracts with physicians, PAs, ARNPs, RNs, LPNs and pharmacists entered, extended or renewed from June 2, 2026.

Since May 6, 2026, no person may enter a non-compete with a licensed healthcare worker, including physicians; such agreements are void. Non-solicitation agreements cannot stop a worker from telling patients their current or future workplace. Exceptions: severance agreements and sale-of-business covenants.

For contracts made or renewed on or after Jan. 1, 2026, physicians of all specialties cannot be restricted from practicing anywhere, for any period, after leaving, or from treating or soliciting the employer's current patients. Exceptions: practice sales and declining-balance repayment provisions.

Physician noncompetes signed or renewed on/after Sept. 1, 2025 must include a buyout capped at annual salary and wages, last no more than one year, cover no more than five miles, and be clearly written; void if physician is involuntarily discharged without good cause.

For covenants entered or renewed on or after Aug. 6, 2025, noncompetes and customer non-solicits restricting the practice of medicine (including PAs), advanced practice nursing or dentistry are void, with no high-earner exception. Owner and sale-of-business covenants remain allowed, with limits.

Since Act 232 of 2025, a noncompete ancillary to employment that restricts a physician (MD or DO) from practicing within the physician's scope of practice is void. Covenants tied to a business sale or other non-employment relationships fall outside this statute.

Indiana prohibits noncompetes for primary care physicians (agreements from July 1, 2023) and between any physician and a hospital, hospital parent, affiliated manager or hospital system (agreements originally entered from July 1, 2025). Other physician noncompetes must include buyout, patient-notice and records terms.

For licensed health care workers providing direct patient care (including physicians), noncompetes are void if total annual compensation is $350,000 or less; above that, limited to 1 year and 10 miles. Applies to agreements executed on/after July 1, 2025.

Since July 1, 2025, Wyoming voids most noncompetes for all workers. A separate provision voids covenants in physician employment, partnership or corporate agreements restricting practice of medicine after termination; other contract terms remain enforceable. Applies to contracts entered on or after July 1, 2025.

Since June 9, 2025, non-competes restricting the practice of medicine or nursing are generally void between physicians, PAs, NPs or naturopaths and any person, MSO or hospital, including pre-existing agreements. Narrow exceptions: owners of 1.5%+, documented recruitment investment (3-5 year cap), non-clinical roles.

Physician noncompetes must name parishes and generally last no more than two years after employment. Under a 2024 law, restraints cannot extend beyond three years (primary care) or five years (other physicians) from the initial contract's start; later contracts with that employer cannot include noncompetes.

Health care practitioner noncompetes entered into after the Act's January 1, 2025 effective date are void, except an employer may enforce one lasting one year or less if the practitioner was not dismissed. Expense-recovery and ownership/sale covenants are carved out; patient notice required.