Senate Bill 1498 (2023) — Invalid restrictive covenants in health care
SB 1498
Florida Bills
Florida Senate - 2023 SB 1498 By Senator Brodeur 10-00345B-23 20231498__ Page 1 of 3 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1
An act relating to invalid restrictive covenants in 2 health care; amending s. 542.336, F.S.; specifying 3 that certain restrictive covenants in employment 4 agreements relating to certain licensed physicians do 5 not support a legitimate business interest; specifying 6 such restrictive covenants are void and unenforceable; 7 providing applicability; defining the term 8 “compensation”; providing an effective date. 9 10 Be It Enacted by the Legislature of the State of Florida: 11 12
Section
Section 542.336, Florida Statutes, is amended to 13 read: 14 542.336 Invalid restrictive covenants.— 15
(1) A restrictive covenant entered into with a physician 16 who is licensed under
chapter 458 or
chapter 459 and who 17 practices a medical specialty in a county wherein one entity 18 employs or contracts with, either directly or through related or 19 affiliated entities, all physicians who practice such specialty 20 in that county is not supported by a legitimate business 21 interest. The Legislature finds that such covenants restrict 22 patient access to physicians, increase costs, and are void and 23 unenforceable under current law.
Such restrictive covenants 24 shall remain void and unenforceable for 3 years after the date 25 on which a second entity that employs or contracts with, either 26 directly or through related or affiliated entities, one or more 27 physicians who practice such specialty begins offering such 28 specialty services in that county. 29 Florida Senate - 2023 SB 1498 10-00345B-23 20231498__ Page 2 of 3 CODING: Words stricken are deletions; words underlined are additions.
(2) A restrictive covenant entered into with a physician 30 who is licensed under
chapter 458 or
chapter 459 which restricts 31 the physician from practicing medicine in any geographic area 32 for any period of time after the termination of a contract, 33 partnership, employment, or professional relationship is not 34 supported by a legitimate business interest. Such restrictive 35 covenants are void and unenforceable. 36 (
a) This subsection does not apply to any of the following 37 restrictive covenants: 38 1. Related to any research conducted by the physician under 39 the terms of a contract or in furtherance of a partnership, 40 employment, or professional relationship; provided, however, 41 that the covenant does not impair the continuing care and 42 treatment of a specific patient or patients whose care and 43 treatment were part of the research. 44 2. Related to physicians, other than primary care 45 physicians or pediatricians, whose compensation is at least 46 $250,000 per year.
As used in this subparagraph, the term 47 “compensation” means: 48 a. For an employed physician, the amount of wages or salary 49 paid to the physician for the previous tax year or expected to 50 be paid for the current tax year; or 51 b. For a physician with a partnership or similar ownership 52 interest in the profits of a practice, the amount of business 53 income attributed to the physician for the previous tax year or 54 expected to be attributed to the physician for the current tax 55 year. 56 (
b) This subsection applies to restrictive covenants 57 entered into on or after July 1, 2023. 58 Florida Senate - 2023 SB 1498 10-00345B-23 20231498__ Page 3 of 3 CODING: Words stricken are deletions; words underlined are additions.