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House General & Housing committee debates S.230 non-compete language, defers final action
Summary
Committee counsel presented draft 5.1 of S.230's non-compete provisions, which would bar certain post-employment covenants for non-exempt workers and health care providers; members debated using the FLSA non-exempt test versus a salary cutoff, whether to void entire contracts or only offending clauses, a new carve-out for third-party nonclinical vendors, and a prospective effective date; the committee asked counsel for a revised draft and postponed further action.
The House Committee on General & Housing on Thursday reviewed draft 5.1 of S.230's provisions that would restrict agreements not to compete for lower-paid workers and health care providers, but it did not vote and instead asked counsel for a revised draft.
Sophie, an attorney with the Office of Legislative Council, guided members through the new subsection labeled 3B and the health-care-specific language provided by the medical society. "This would provide that contracts and agreements involving health care providers will be void, unenforceable, and against public policy," Sophie told the committee as she summarized the draft language and the patient-notification elements it would allow.
Counsel said the draft ties protection to the Fair Labor Standards Act's non-exempt/exempt test rather than to a fixed salary cutoff. She and several members warned that a simple salary threshold can change with federal rulemaking and said misclassification risk is a key enforcement concern. "If you hook it just to the salary threshold, the problem with that is that different…
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