Restrictions on non-compete agreements in the state of Maryland for certain care-related industries have become substantially broader. Under Maryland House Bill (HB) 1388, Maryland employers now face increased restrictions on entering into non-compete and conflict of interest agreements with healthcare and veterinary professionals.
Maryland’s new “Non-Compete and Conflict of Interest Clauses for Veterinary and Health Care Professionals and Health Care Market Study Act” amend the Maryland Laboratories and Employment Code. § 3-716, which currently prohibits non-compete agreements for Maryland employees who earn less than 150 percent of the state minimum wage (~$46,800 per year), to incorporate additional restrictions for healthcare and veterinary professionals.
quick hits
- Maryland HB 1388 places greater restrictions on Maryland employers who enter into non-compete and conflict of interest agreements with healthcare professionals and veterinarians.
- HB 1388 prohibits restrictions on certain employees who are required to be licensed under the Health Occupations Article and certain employees who are licensed as a veterinarian or veterinary technician under Title 2, Subtitle 3 of the Agriculture Article.
- HB 1388 goes into effect June 1, 2025.
HB 1388: Restrictions, definitions and effective date
Article on health occupations
Specifically, HB 1388 prohibits restrictions on employees who:
- They must be licensed under the Health Occupations Article;
- Employed in a position providing direct patient care; and
- Earn equal to or less than $350,000 in total annual compensation; either
- Be licensed as a veterinarian or veterinary technician under Title 2, Subtitle 3 of the Agriculture Article.
Maryland’s health occupations article requires licensure for a wide variety of health care professionals, including:
- audiologists, speech therapists and music therapists;
- chiropractors;
- dentists;
- dieticians-nutritionists;
- masseuses;
- undertakers and funeral directors;
- nurses;
- nursing home administrators;
- occupational therapists;
- optometrists;
- pharmacists;
- physiotherapists;
- physicians and physician assistants;
- podiatrists;
- professional counselors and therapists;
- psychologists;
- Social workers;
- residential child care program professionals;
- environmental health specialists;
- acupuncturists.
The law also establishes new, although less restrictive, parameters for covered employees who earn more than $350,000 a year. Specifically, the law states that a non-compete or conflict of interest provision agreement must:
- Not to exceed one year from the last day of employment;
- Not impose any geographic restrictions that exceed 10 miles from the principal place of employment; either
- Allow a patient to request and receive notice of the new location where the former employee will practice.
For covered health care professionals, HB 1388 goes into effect on June 1, 2025.
Article on agriculture (veterinary)
Similarly, the Agriculture Article defines veterinary professionals as follows:
- “Veterinary Physician” means a licensed and registered veterinarian engaged in the practice of veterinary medicine. Maryland Agricultural Code § 2-301(13)(h)(i)
- “Veterinary technician” means a person who is registered with the Board as a veterinary technician. Maryland Agricultural Code § 2-301(13)(h)(ii)
For covered veterinary professionals, HB1388 takes effect earlier, on June 1, 2024.
Next steps for the Health Care Commission
Lastly, HB 1388 requires the Maryland Health Care Commission to hire a private consultant to study:
Key takeaways
With the enactment of this new statute, Maryland veterinary and healthcare employers may need to consider reviewing their non-compete agreements and adjust their use accordingly.
Ogletree Deakins’ Unfair Competition and Trade Secrets & Healthcare practice groups will continue to monitor developments and provide updates to the Unfair Competition and Trade Secrets & Healthcare blogs as additional information becomes available.
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