Pennsylvania Enacts the Fair Contracting for Health Care Practitioners Act, Restricting Non-Competition Agreements Against Healthcare Professionals

Pennsylvania’s Fair Contracting for Health Care Practitioners Act (FCHPA) has introduced significant changes to the way non-compete agreements apply to healthcare professionals in the state. Enacted to promote fair employment practices, the Act specifically limits restrictive covenants that may hinder practitioners’ ability to continue providing care.

What Are Non-Compete Agreements?

Non-compete agreements, commonly included in employment contracts, prevent professionals from practicing within a certain geographic area or for a specified duration after leaving an employer. While these clauses have been widely used across industries, their application in healthcare has raised concerns about access to medical services and continuity of care for patients.

Under the FCHPA, non-compete agreements for healthcare practitioners are generally deemed unenforceable if they impose undue hardship on the practitioner or if they would negatively impact patient care. The law aims to strike a balance between the business interests of healthcare employers and the rights of physicians, nurses, and other medical professionals to seek employment without excessive restrictions.

Are Any Restrictions Still Allowed Under the FCHPA?

However, the Act does not prohibit all restrictive covenants. Employers may still enforce agreements that protect legitimate business interests, such as safeguarding trade secrets or confidential patient lists. Additionally, non-solicitation agreements—preventing practitioners from actively recruiting former patients or staff—remain enforceable under certain conditions.

Pennsylvania’s move reflects a broader national trend of scrutinizing non-compete clauses in the healthcare sector. With ongoing discussions at both state and federal levels about the fairness and impact of such agreements, the FCHPA represents a step toward greater employment mobility for healthcare professionals while ensuring that patient access to care is not unduly restricted.

Healthcare practitioners in Pennsylvania should carefully review their contracts and seek legal guidance to understand their rights and obligations under the new law. Employers, too, must ensure their agreements comply with these evolving legal standards to avoid potential disputes and challenges to enforcement.

If you have questions about a healthcare employer’s non-compete agreement, ask the knowledgeable and experienced Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C., one of Philadelphia’s oldest law firms. Call the firm at 215-574-0600 or contact us online to schedule an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey, including South Jersey.