Healthcare Non-Compete Litigation

Restrictive covenants, such as non-competition and non-solicitation clauses, are common in healthcare contracts. When structured appropriately, they are designed to protect a healthcare entity’s legitimate business interests for a specific length of time in a specific geographic region. Restrictive covenants can cause problems for physicians and healthcare entities alike, especially when they are not drafted appropriately or not fully understood. 

 Over the last few years, legislatures across the country have enacted statutes to limit the enforceability of restrictive covenants in certain healthcare contracts. The New Mexico legislature, for example, enacted the New Mexico Healthcare Practitioner Agreements Act in 2015 (and amended it in 2017) in an attempt to limit the enforceability of non-competition clauses in certain healthcare practitioner agreements.

 Some physicians and healthcare entities in New Mexico have assumed that the Act renders all restrictive covenants null and void as a matter of law. That is not necessarily the case. Questions about the language of the Act remain, and courts have only just begun to interpret the statute. As a result, litigation regarding the enforceability of restrictive covenants in healthcare contracts continues.

 Dan represents healthcare entities and physicians in litigation involving restrictive covenants. In 2022 alone, he represented physicians, hospitals, and medical groups in three separate cases involving alleged violations of restrictive covenants, including alleged violations of non-competition provisions. Litigation in this area will likely continue until the courts clarify the remaining questions posed by the language of the Act.