In what was called a fight between two major hospital systems, a state Senate committee advanced legislation that would limit noncompete clauses in physician employment contracts.
Senate Bill 177 would drop the ability of medical industry employers from keeping their physician employees from working in the same area after five years of employment. The measure also would end noncompete clauses after five years for advanced practice nurses, physician assistants and nurse practitioners.
State law allows employers to include wording that would keep employees in most industries from working in the same community for two years after being fired or resigning. Generally, noncompete clauses are included in subsequent employment contracts.
Baton Rouge Republican Sen. Dan Claitor said the measure would protect hospitals and clinics, which have invested in recruiting and training physicians, but allow the doctors the ability to work elsewhere in the same community after five years with the same employer.
“It says that after five years, ‘I’m no longer an indentured servant’,” Claitor said.
Dr. Robert Hart, the chief medical officer for the Ochsner Health System, said considerable expense goes into hiring, training and supporting physicians, particularly those in highly specialized disciplines, such as liver transplants. The hospitals have a right to protect their investment and keep other hospitals and clinics from swooping in and hiring them away.
“To say after five years they could walk away would be a tragedy,” he said.
Jefferson Parish Coroner Dr. Gerry Cvitanovich also has worked at Ochsner and signed a contract with a noncompete clause. He said once in private practice, he had to deal with a hospital hiring away his physician employees.
“It seems to me this is a battle of the systems,” Cvitanovich testified.
Dr. Curtis Chastain, who specializes in internal medicine at Our Lady of the Lake Regional Medical Center, disagreed.
“It’s all about the patients,” Chastain said. “It’s just not good for the patient.”
A trained doctor can leave town easily and will if unable to practice because of a noncompete clause, he said. That leaves patients, particularly those with severe illnesses, in limbo for several months while getting an appointment with a new doctor, he said. Then they must rebuild the patient-doctor relationship, he said.
The Lake does not include noncompete clauses when hiring physicians. Ochsner does.
The Senate Committee for Commerce, Consumer Protection and International Affairs voted 6-1 to advance SB177 to the full Senate for consideration.