The law states: «The party wishing to enforce a non-compete obligation shall bear the burden of proof in any proceeding.» The law places the burden of proof on the employer, whether it is the employer who wants to enforce the non-compete obligation or the physician who questions its applicability. The law does not explicitly specify whether the new allocation of the burden of proof is retroactive. However, in 2016, Connecticut began to reduce the scope of these regulations. Effective July 1, 2016, it enacted legislation limiting, among other things, restrictive agreements to a period of one (1) year and a maximum geographic scope of fifteen (15) miles from the «main site» where the physician had practiced. It also provides that a restrictive agreement is inapplicable if the employment relationship is terminated by the employer without giving reasons. The law specifies that if a non-compete obligation is declared null and void and unenforceable due to the limitations of the law, the other provisions of the employment contract will remain in full force and effect, including provisions requiring the payment of damages for damages suffered as a result of the termination of the employment contract. According to the analysis in point (i), it appears that a non-compete obligation in an expired medical employment contract is inapplicable unless the employer proposes to renew the contract on the same or similar terms before the expiry of the employment contract. What constitutes «similar conditions» is unclear and may give rise to disputes as to the interpretation of the term. Unlike New York, Massachusetts, Delaware, Colorado, and Rhode Island have all passed laws prohibiting the use of non-compete clauses in doctors` employment contracts. New Mexico also prohibits non-compete obligations that prevent physicians and other health professionals from providing clinical health services, but the state does not restrict these provisions in agreements between shareholders, owners, partners, or directors of the practice.
Non-compete obligations in employment contracts are generally unenforceable in California, so this restriction also applies to agreements with physicians. The laws of Delaware and Colorado contain loopholes that allow doctors to be held liable for damages if they leave their practice and compete in the region; But in 2018, Colorado passed a law to prevent doctors from being held liable for such harms if they share their new contact information with patients with «rare diseases.» For agreements concluded on or after 1. Closed, amended or renewed in July 2016, the Act prohibits restricting a physician`s competitive activities (i) for more than one year and (ii) more than 15 miles from the physician`s primary location (i.e., the office, facility or location from which a large portion of the physician`s services is generated). In addition, the statutes also provide for restrictions on how the non-competition agreement is to be concluded. Any non-competition agreement concluded, amended or renewed as of 1 July 2016 shall be signed separately and individually by the physician. The Connecticut General Assembly passed a law that establishes significant new restrictions on non-compete obligations for state physicians. The governor is expected to sign the bill soon (Senate Bill 351, as amended). In addition, one on or after the 1. a non-compete undertaking entered into, amended or renewed in July 2016 is unenforceable against a physician if (i) the employment contract in question was not entered into in advance or under a partnership or ownership agreement and the contract expires and is not renewed, unless a good faith offer to renew the contract on the same or similar terms before the expiry of the expiration of the employer, or (ii) the employer terminates the employment or contractual relationship without giving reasons. The law also stipulates that the party who wants to enforce a medical obligation not to compete bears the burden of proof in any proceedings. These factors and the burden of proof are consistent with the applicable connecticut common law with respect to non-compete obligations in general.
The rest of the new law is not. The «principal place where such medical practices carry on their activities» is defined as «the office, establishment or place where a substantial part of the income from the services of such a physician is generated» or «any other office, establishment or place where such medical practices are carried on and mutually agreed upon by the parties and in the Agreement, not being in competition with each other, have been identified.» Therefore, the standard «primary site» is the facility where the physician practices the majority of his or her practice. However, the parties to a physician`s prohibition may expressly agree to another facility as the basis for the 15-mile restriction if the physician actually practices in such an institution. The law is based on established non-compete obligations. However, when drafting and attempting to enforce medical non-compete obligations, employers must consider several new restrictions that replace existing law. In anticipation of these new restrictions, employers should ensure that all physicians registered, amended or renewed on or after July 1, 2016 meet the one-year deadline and the 15-mile geographic restriction. Employers should also consider explicitly identifying a «primary location where these physicians practice» to ensure it protects the optimal geographic range of 15 miles. Connecticut has recently taken steps to impose new restrictions on non-compete obligations. This week, a bill was submitted for consideration that would amend the provisions that were introduced on or after the 1st.
July 2021, amended, extended or renewed, makes it impracticable if the employment or contractual relationship is terminated by the employer or if the employment or contractual relationship is terminated by the employee for a valid reason attributable to the employer. . . .