To ensure continuity of care as consolidated hospital systems increasingly stretch over broad geographic regions, meaning that a hospital network’s noncompete clause can prevent healthcare practitioners from practicing in large areas of the state that are well beyond their initial employment location, Pennsylvania Governor Josh Shapiro signed the “Fair Contracting for Health Care Practitioners Act” (House Bill 1633) on July 17, 2025.The Bill restricts the ability of employers and healthcare practitioners to enter into non-compete agreements.
Under the law, covered employers are those that employ a health care practitioner at a health care facility or office, and covered employees are medical doctors (M.D.), doctors of osteopathy (D.O.), certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants, except those who have an interest in the business entity.
The Act goes into effect on January 1, 2025, and will make any agreements entered into after this date void and unenforceable. However, the law does contain an exception provision for agreements that are no more than one year and provided that the employer did not terminate the covered healthcare worker.
The law also contains patient notice provisions that require entities to notify patients within 90 days of the departure of a covered healthcare worker.
Next Steps
It is recommended that employers consult with their legal counsel to review any current non-compete agreements/policies utilized by the organization to ensure that they align with the requirements of this law.
