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Committee hears testimony on banning noncompetes; health-care groups urge broad protections
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Summary
The House Committee on General & Housing heard testimony April 15 on S.230 and whether to ban noncompete agreements. Labor advocates and the Vermont Medical Society urged limits, especially for health-care workers, citing patient access, nondisparagement and out-of-state staffing concerns. A markup is scheduled for the next day.
The House Committee on General & Housing on April 15 took testimony on S.230, a fair-employment bill that includes a possible prohibition on noncompete agreements for workers. Committee Chair Representative Mark Mahalley opened the meeting, described a short legislative-council draft on the committee website and introduced witnesses.
David Mickenberg, a lobbyist for Working Vermont, told the committee he supports banning noncompetes and described recent federal activity on the issue. "Noncompetes ... constrain people's ability to invest economically in their lives," Mickenberg said, and he urged the committee to move beyond narrow dollar-based thresholds used in some tests. He described a previously considered approach (the committee’s 02/2005 draft) that applied a broader functional test rather than a simple salary cutoff and suggested that an approach tied to exempt-versus-nonexempt status under the Fair Labor Standards Act would better capture workers who should be protected.
Jessa Barnard, executive director of the Vermont Medical Society, testified that the society — which represents physicians and physician assistants — "strongly support[s] a broad prohibition on noncompetes for health-care professionals," arguing that restrictions can interrupt patient care and worsen access in rural areas. Barnard said nondisparagement clauses and non-solicitation language also pose risks, explaining that the draft language seeks to let departing clinicians inform patients where they are practicing while still protecting patient health information. "Patients have the right to choose their provider," she said.
Barnard raised a separate concern about national staffing companies that place traveling clinicians. She described draft language modeled on a New Mexico law that would require contracts for services provided in Vermont to be subject to Vermont law, with the goal of enabling local employers to hire traveling staff into permanent roles when appropriate.
Committee members pressed witnesses on several drafting questions: whether prohibitions would conflict with HIPAA or allow employers to retain patient lists, whether nondisparagement carve-outs would permit regulatory complaints or public disclosures, and how employment law would apply to clinicians who live out of state but work temporary placements in Vermont. Barnard said the intent of the contract-language option is to clarify that clinicians providing services to Vermont patients may need contracts subject to Vermont law.
No formal vote took place. Chair Mahalley said the committee plans a markup session the following morning and will try to craft a narrow text with legislative counsel that avoids the drafting problems from earlier bills. The committee recessed with a markup scheduled at 10:30 the next day.
