Senate narrows noncompete clauses for health professionals despite legal concerns about retroactivity

The Utah Senate on Feb. 14 passed legislation to restrict noncompete provisions applied to health professionals but met extended skepticism from several senators about retroactivity and potential legal vulnerability.

Senator Christiansen, sponsor of SB 145, said the bill does not void entire contracts but removes or limits particular noncompete provisions that prevent health professionals from practicing in other locations. He said the measure was modeled on provisions used in other states and that the language was narrower than some proposals so it would be less likely to draw opposition from hospitals and certain surgical centers.

Opponents warned that the bill’s retroactive language raised constitutional and policy concerns. Senator Hilliard asked whether making the provision retrospective could deprive people who negotiated in good faith of agreed contract terms; he said, ‘‘I’m always nervous when I see a bill as prospective because oftentimes the law will... strike it down on that cause alone.’’ Senator Arent and other members also raised concerns that the bill applies a narrow remedy to a broadly framed workforce problem and that courts may scrutinize the state's use of police-power findings to justify impairing contract rights.

Supporters said several other states have passed similar laws and that careful drafting had addressed some constitutional questions; Senator Thomas noted the legislative general counsel had reviewed the matter and indicated the risk of unconstitutionality was not high. After extended debate and some members explaining their policy votes, the Senate recorded 18 yes votes, 10 nays and 1 absence; the measure passed and will be sent to the House for further action.

Provenance: topicintro SEG 1868; topfinish SEG 2213