Maryland has significantly expanded non-compete agreement restrictions for certain care-related industries. Under Maryland House Bill (HB) 1388, Maryland employers will be subject to stricter restrictions on entering into non-compete and conflict of interest agreements with medical and veterinary professionals.
Maryland’s new “Non-Compete and Conflict of Interest Clauses for Veterinarians and Medical Professionals and Study of the Healthcare Marketplace Act” amends Maryland Laboratory and Employment Law § 3-716, which currently prohibits non-compete agreements for Maryland employees earning less than 150% of the Maryland minimum wage (approximately $46,800 per year), to incorporate additional restrictions for medical and veterinary professionals.
Quick Hit
- Maryland’s HB 1388 places stricter restrictions on Maryland employers’ ability to enter into non-compete and conflict of interest agreements with medical and veterinary professionals.
- HB 1388 prohibits restrictions on certain employees required to be licensed under the health professions provisions and certain employees licensed as veterinary practitioners or veterinary technicians under Title 2, Subtitle 3 of the Agriculture Provisions.
- HB 1388 will take effect on June 1, 2025.
HB1388: Limitations, definitions and effective date
Medical Career Articles
Specifically, HB 1388 prohibits restrictions on employees that:
- They must be licensed under the Health Professions Act.
- Employed in a position that provides direct patient care.
- Annual total compensation is $350,000 or less; or
- Be licensed as a veterinarian or veterinary technician under Chapter 2, Section 3 of the Agriculture Act
Maryland’s medical professions code requires licensing for a variety of medical professionals, including:
- Audiologists, speech-language pathologists, and music therapists.
- Chiropractor
- dentist;
- Nutritionist;
- Massage Therapist
- Undertakers and Funeral Directors
- nurse;
- nursing home administrators;
- Occupational therapist;
- Optometrist;
- pharmacist;
- physical therapist;
- Physicians and physician assistants
- Podiatrist;
- Professional counselors and therapists
- psychologist;
- Social workers;
- specialists in residential child care programs;
- environmental health professionals;
- Acupuncturist.
The law establishes new, though less restrictive, standards for covered employee income. is more than $350,000 per year. Specifically, the law states that any non-compete or conflict of interest clause agreement must include the following:
- Not to exceed one year from the last day of employment.
- No geographical restrictions beyond 10 miles from the principal place of employment.
- Allows patients to request and receive notice of a former employee’s new location.
For covered health care workers, HB 1388: June 1, 2025.
Agriculture (Veterinary) Articles
Similarly, the Agriculture Clause defines a veterinary professional as:
- “Veterinarian” means a veterinarian licensed and registered to engage in the practice of veterinary medicine. Maryland Agriculture Law § 2-301(13)(h)(i)
- “Veterinary technician” means a person who is registered with the Board as a veterinary technician. Maryland Agriculture Law § 2-301(13)(h)(ii)
HB 1388 goes into effect for covered veterinary professionals Beforeupon June 1, 2024.
Next steps for the Board of Health
Finally, HB 1388 requires the Maryland State Board of Health to contract with a private consultant to study:
- the influence of private equity firms on the state’s health care market;
- Payer mix of physician practices and private equity-owned groups.
- The impact of hospital consolidation on physician practice.
- Acquisition of a doctor’s practice
- impacts on the ability of not-for-profit hospitals and health systems to maintain access to care, including their ability to hire and retain physicians;
Key Takeaways
With this new law in place, medical and veterinary employers in Maryland may need to revisit their non-compete agreements and consider adjusting how they are used accordingly.
Ogletree Deakins Unfair Competition and Trade Secrets and health care The Practice Group will continue to monitor developments and provide updates. Unfair Competition and Trade Secrets and health care We will update this blog with more information as it becomes available.
