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Act 232 amends the state’s Unfair Practices Act to invalidate non-compete agreements that restrict the ability of physicians (medical doctors and osteopaths) to practice medicine within their professional scope. Specifically, the Act declares such non-compete agreements as void.
The Act is intended to clarify existing case law, which has consistently held that it is contrary to public policy to unduly restrict the public’s right to a physician of their choosing. The law does not apply to other types of healthcare providers, and it applies only to non-compete provisions in physician employment agreements. Non-compete provisions contained in other types of agreements (e.g., the sale of a business) are unaffected. The law goes into effect on August 5, 2025. While it not necessary for employers to amend their existing physician agreements, it is advisable to seek legal counsel prior to attempting to enforce a physician non-compete. Employers should also consider omitting non-compete provisions in physician employment agreements going forward.