Lawmakers consider ban on nursing-agency non‑compete clauses after testimony from nurses, agencies and school nurses

The House Labor Committee heard extended testimony on HB 386, a bill that would bar nursing staffing agencies from placing non‑compete provisions in contracts with health care organizations and other facilities that use agency nurses. Sponsor Rep. David Priess, R–Manchester, told the committee the measure is intended to close a loophole agencies use to restrict nurses’ ability to accept direct-hire work at facilities where they have been assigned.

Supporters said the clauses are sometimes hidden in contracts between agencies and facilities, not in the nurse’s employment agreement, and that practice raises costs for public institutions while trapping nurses in agency assignments. “Nursing agencies bypass these laws by placing non‑compete articles in their contracts with organizations that provide staffing services,” Rep. David Priess said. He described local nursing homes that cannot afford agencies’ buyout fees when they want to hire long‑term staff they have been using.

Interim Healthcare owner Rick Peterson, who described his company as a local, 47‑year family business that staffs hospitals, nursing homes and schools, told the committee he supports most of the bill but opposes parts (sections e and f) that would ban buyout fees without offering alternatives. Peterson said agencies invest heavily to recruit, vet and place per‑diem staff and that an outright ban on buyouts could cause some agencies to stop providing supplemental staffing, leaving facilities short during emergencies. “We wouldn't continue to send nurses into a facility that is picking off our people one by one,” Peterson said. He described negotiated, commercially common buyout arrangements (he mentioned a typical 13‑week transition formula used by his firm) and urged careful drafting so facilities and agencies can keep working relationships intact.

Patricia Anglin, a school nurse and union representative from Manchester, and Pam DiNapoli of the New Hampshire School Nurse Association testified in support. They described cases where out‑of‑state agencies’ contracts contained long buyout windows or broad geographic restrictions, and said districts and county facilities have paid tens of thousands of dollars to “buy” nurses. Anglin provided a list of agencies she said used such clauses and told the committee that agency nurses often appear in online recruitment results above local direct‑hire postings because agencies spend heavily on advertising.

Committee members raised practical questions about enforcement, whether the proposal should apply only to organizations that receive public funds, and whether employer‑side contracts between agencies and facilities (not the nurses themselves) would be covered. Several members also asked whether a disclosure requirement — so nurses would be told of contract restrictions before placement — would address some problems. Agency witnesses and the American Staffing Association suggested disclosure could be a useful first step; they urged caution about broadly invalidating private contracts because of possible unintended side effects.

Deputy Commissioner Danielle Albert of the New Hampshire Department of Labor said the department could administer any new requirements but recommended clarifying recordkeeping or notice requirements to aid enforcement. Other witnesses, including facility administrators testifying later in the hearing record, described the operational and cost pressures that cause facilities to rely on supplemental staffing and warned that sudden changes in market structure could reduce available nurses in emergencies.

The committee took public testimony from nurses who described being assigned to multiple facilities and then being blocked by agency‑facility agreements from being directly hired by the organizations where they worked. Supporters framed the bill as a targeted fix for a specific practice that evades existing New Hampshire statutes addressed to individual non‑compete disclosures. Opponents warned the bill could have market consequences and said local agencies that cooperate with facilities generally do not use broad buyouts.

No formal committee vote on HB 386 was reported in the transcript; the committee closed the hearing after public testimony and a series of later agenda items. Representative Priess said he will provide additional material and correspondence he received from the Federal Trade Commission on non‑compete rulemaking and that he is willing to work with the committee on drafting changes that balance facility needs, agency business models, and nurses’ mobility.

“If facilities want to hire somebody they like, there’s usually a negotiated settlement,” Interim Healthcare’s Rick Peterson said. “We want to continue to have a customer and a business relationship.”