Bill would bar settlement clauses that silence complaints to licensing boards, officials say

Representative Steve Fitzpatrick, sponsor of House Bill 563, told the Senate Business and Labor Committee the bill prevents health-care and other licensed professionals from using settlement agreements to strip a harmed person’s ability to file a complaint with a licensing board.

Quinlan O’Connor, chief legal counsel for the Department of Labor and Industry, testified in support and explained the policy and constitutional limits underpinning the bill. “What our primary concern here is is that we want both, tour claims to be able to settle,” O’Connor said. But he added that licensing boards must retain the ability to investigate and discipline licensees: contract provisions that bar complainants from cooperating with an investigation can “harm[] the ability of the licensing boards to be able to protect the public.”

O’Connor said the bill places the burden on licensees by making it unprofessional conduct for a licensee to enter into a contract clause that prevents someone from filing or participating in a licensing board investigation. He emphasized the bill applies only to contracts entered into after the bill’s effective date, noting constitutional limits on retroactive contract interference: “This only affects contracts entered into after the effective date of the bill.”

Committee members asked whether the departments already had authority to challenge problematic waivers under existing common law; O’Connor said such litigation would be costly and uncertain and that the bill provides clearer, faster protections for boards and the public. He also noted the bill preserves ordinary settlement terms that compensate claimants, while preventing contractual silencing of witnesses or complainants.

No opponents registered for the hearing. After questions, the sponsor closed the hearing and asked the committee to concur.