New Florida Law Voids Certain Non-Compete Agreements for Physicians

By: Mark A. Levy

In this day and age, many types of employees and contractors are required to sign non-compete agreements, and such agreements are widely used in the medical field.  In Florida, these agreements are generally upheld as valid so long as they are reasonable in terms of time and geographic scope, and are supported by legitimate business interests of the employer.

However, the State of Florida recently passed a law which provides that non-competition agreements entered into between physician specialists, and an entity which employs or contracts with all physicians of that specialty in a specific county, are void and unenforceable.  The new statute, Section 542.336, became effective on July 1, 2019.  The law was promptly challenged in federal court as being unconstitutional.  However, the court denied a request for an injunction because, among other things, it found that the law serves a significant and legitimate public purpose: to reduce healthcare costs and improve patients’ access to physicians.  21^st Century Oncology, Inc. v. Moody, No. 4:19cv298-MW/CAS, 2019 WL 3948099 (N.D. Fla. Aug. 21, 2019).

Because of the law’s requirement that the employer entity needs to employ all of the specialists in a given county, it is likely that the new law’s effect will mainly be limited to voiding physician non-compete agreements in the less densely populated (rural) areas of Florida.  However, employers of physicians that utilize non-compete agreements should be aware of the new law and how it may impact their agreements.

As a Partner with Brinkley Morgan’s Business Litigation and Appellate group in Ft. Lauderdale, Mark A. Levy represents a wide range of clients, including companies, individuals and local governments, assisting them with avoiding and resolving all types of business, commercial and financial disputes. His practice focuses primarily on commercial litigation, including creditors’ rights, bankruptcy, business torts, corporate disputes, contract disputes, real property disputes, employment and non-compete agreements, intellectual property, and local government issues. He can be reached by telephone at 954.522.2200 or by email at Mark.Levy@brinkleymorgan.com