Colorado General Assembly passes bill regulating non-compete clauses for healthcare providers

On April 21, 2025, the Colorado State Legislature introduced Senate Bill 83, a significant piece of legislation aimed at reforming the use of non-compete and non-solicitation agreements, particularly in the healthcare sector. This bill seeks to address growing concerns about the impact of restrictive covenants on healthcare providers and their ability to practice freely, ultimately affecting patient care and access to medical services.

One of the bill's key provisions is the exclusion of non-compete agreements that restrict the practice of medicine, advanced practice registered nursing, or dentistry from the highly compensated worker exemption. This means that healthcare professionals will have greater freedom to move between practices without facing legal barriers that could limit their career opportunities. Additionally, the bill modifies existing laws regarding non-solicitation agreements, ensuring that such covenants do not unduly restrict healthcare providers from informing patients about their new practice locations or contact information after leaving a medical practice.

The legislation also introduces a new framework for non-compete agreements involving individuals with minority ownership stakes in businesses, allowing for more flexibility in how these agreements are structured. However, it sets clear limits on the duration of such covenants, ensuring they are not excessively long and are tied to the individual's compensation.

The introduction of Senate Bill 83 has sparked notable debates among lawmakers, healthcare professionals, and business owners. Proponents argue that the bill is essential for fostering a competitive healthcare environment that prioritizes patient choice and access to care. They emphasize that restrictive covenants can lead to a shortage of healthcare providers in certain areas, ultimately harming patients who rely on these services.

Opponents, however, express concerns that the bill could undermine the ability of businesses to protect their interests and trade secrets. They argue that without adequate protections, companies may face challenges in retaining talent and safeguarding sensitive information.

The implications of Senate Bill 83 extend beyond the healthcare sector, touching on broader economic and social issues. By facilitating greater mobility for healthcare providers, the bill could lead to improved patient outcomes and increased competition among medical practices. However, it also raises questions about the balance between protecting business interests and ensuring that healthcare professionals can serve their patients effectively.

As the bill moves through the legislative process, its potential impact on Colorado's healthcare landscape and the broader economy will be closely monitored. Stakeholders from various sectors are expected to weigh in as discussions continue, highlighting the importance of finding a solution that benefits both healthcare providers and the communities they serve.