On April 25, 2024, Governor Wes Moore signed House Bill ("H.B.") 1388, titled "Noncompete and Conflict of Interest Clauses for Veterinary and Health Care Professionals and Study of the Health Care Market." Consequently, as of June 1, 2024, H.B. 1388 voided all non-compete and conflict of interest provisions in employment contracts for certain veterinary practitioners and veterinary technicians. Effective July 1, 2025, this new law will either ban or materially limit the use of non-compete restrictions for healthcare professionals licensed under the Health Occupations Article and providing direct patient care.
H.B. 1388
Veterinary Professionals/Veterinary Technicians. As of June 1, 2024, for these types of employees, any "noncompete or conflict of interest provision in an employment contract or similar document or agreement that restricts the ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business or trade shall be null and void as being against the public policy of the State."
Healthcare Professionals. Effective July 1, 2025, non-compete and conflict of interest provisions for healthcare professionals licensed under the Health Occupations Article who provide "direct patient care" will be banned or reduced (Note: H.B. 1388 does not apply to all healthcare professionals). Such provisions will be completely banned for professionals earning total annual compensation of $350,000 or less and materially limited for professionals earning total annual compensation of more than $350,000. Specifically, for those healthcare professionals earning more than $350,000, non-compete provisions will be unenforceable if they include (i) a restrictive period of more than one year or (ii) geographic limitation of greater than 10 miles from the professional's principal place of employment. In addition, if a patient of a healthcare professional earning more than $350,000 inquires, employers will be required to inform the patient when that healthcare professional moves to a new practice.
Takeaway
The new law significantly changes and expands the ban on non-competes in Maryland, following a national trend aimed to ban or at least restrict non-competes in order to promote greater worker mobility across the country. As such, Maryland employers of veterinary and certain healthcare professionals should consider alternative strategies to protect confidential and proprietary information, such as non-solicit and non-interference agreements, and should immediately review and potentially revise existing (and future) employment agreements to comply with the new Maryland law and restrictions.
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