Bill Text: FL S0458 | 2024 | Regular Session | Comm Sub

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Bill Title: Invalid Restrictive Covenants in Health Care

Spectrum: Slight Partisan Bill (? 2-1)

Status: (Failed) 2024-03-08 - Died in Rules [S0458 Detail]

Download: Florida-2024-S0458-Comm_Sub.html

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       Florida Senate - 2024                       CS for CS for SB 458
       
       
        
       By the Committees on Commerce and Tourism; and Health Policy;
       and Senator Brodeur
       
       
       
       
       577-02962-24                                           2024458c2
    1                        A bill to be entitled                      
    2         An act relating to invalid restrictive covenants in
    3         health care; amending s. 542.336, F.S.; specifying
    4         that certain restrictive covenants in employment
    5         agreements relating to certain licensed physicians are
    6         not supported by a legitimate business interest;
    7         specifying that such restrictive covenants are void
    8         and unenforceable; providing applicability; defining
    9         the term “compensation”; providing an effective date.
   10          
   11  Be It Enacted by the Legislature of the State of Florida:
   12  
   13         Section 1. Section 542.336, Florida Statutes, is amended to
   14  read:
   15         542.336 Invalid restrictive covenants.—
   16         (1) A restrictive covenant entered into with a physician
   17  who is licensed under chapter 458 or chapter 459 and who
   18  practices a medical specialty in a county wherein one entity
   19  employs or contracts with, either directly or through related or
   20  affiliated entities, all physicians who practice such specialty
   21  in that county is not supported by a legitimate business
   22  interest. The Legislature finds that such covenants restrict
   23  patient access to physicians, increase costs, and are void and
   24  unenforceable under current law. Such restrictive covenants
   25  shall remain void and unenforceable for 3 years after the date
   26  on which a second entity that employs or contracts with, either
   27  directly or through related or affiliated entities, one or more
   28  physicians who practice such specialty begins offering such
   29  specialty services in that county.
   30         (2) A restrictive covenant entered into with a physician
   31  who is licensed under chapter 458 or chapter 459 which restricts
   32  the physician from practicing medicine in any geographic area
   33  for any period of time after the termination of a contract,
   34  partnership, employment, independent contractor arrangement, or
   35  professional relationship is not supported by a legitimate
   36  business interest. Such restrictive covenants are void and
   37  unenforceable.
   38         (a) This subsection does not apply to a restrictive
   39  covenant that is:
   40         1. Related to any research conducted by the physician under
   41  the terms of a contract or in furtherance of a partnership,
   42  employment, or professional relationship; provided, however,
   43  that the covenant does not impair the continuing care and
   44  treatment of a specific patient or patients whose care and
   45  treatment were part of the research.
   46         2. Related to physicians whose individual compensation
   47  totals at least $250,000 per year. As used in this subparagraph,
   48  the term “compensation” means:
   49         a. For an employed physician, the amount of wages, bonuses,
   50  benefits, and salary paid to the physician for the previous tax
   51  year or expected to be paid for the current tax year; or
   52         b. For a physician with a partnership or similar ownership
   53  interest in the profits of a practice, the amount of business
   54  income attributed to the physician for the previous tax year or
   55  expected to be attributed to the physician for the current tax
   56  year.
   57         3. For a physician who has any ownership interest in a
   58  medical business, practice, management services organization, or
   59  entity of any kind and who sells:
   60         a. The goodwill of such business, practice, management
   61  services organization, or entity;
   62         b. Any or all of his or her ownership interest in such
   63  business, practice, management services organization, or entity;
   64  or
   65         c. Any or all portions of the assets of such business,
   66  practice, management services organization, or entity together
   67  with its goodwill and who contractually agrees with a buyer of
   68  such business, practice, management services organization, or
   69  entity, or portion thereof, to refrain from carrying on a
   70  competing business, practice, management services organization,
   71  or entity within a specified geographic area reasonably
   72  necessary to protect the legitimate business interest of the
   73  acquiring party or the acquired business, practice, management
   74  services organization, or entity.
   75         (b) This subsection applies to restrictive covenants
   76  entered into on or after July 1, 2024.
   77         Section 2. This act shall take effect July 1, 2024.