If you’re a physician, your employment agreement likely contains a noncompete clause, and the rules governing that clause may be changing. States across the country are limiting or banning physician noncompetes, and New York could be next.
WHERE NEW YORK STANDS TODAY
As of today, New York has no statute specifically governing physician noncompetes. As a result, courts generally apply a common-law test when disputes arise. Under BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), a restraint is reasonable only if it (1) is no greater than required to protect the employer’s legitimate interest, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. Violation of any one of these prongs renders the covenant invalid. Separately, the Reed, Roberts standard quoted in BDO requires the restriction to be reasonable in time and geographic area. New York courts have historically given employers somewhat more latitude when restricting competition among learned professionals, including physicians, within a confined area, but they still scrutinize the particular facts and circumstances. For physicians, the public-interest prong is especially important because restricting a physician can limit patients’ access to care. An overbroad covenant is not automatically void. A court may partially enforce it by narrowing the restriction if the employer acted in good faith, without overreaching or coercively using its bargaining power. But a court may strike it entirely where the employer overreached, such as imposing the covenant as a condition of hiring.
In Long Island Minimally Invasive Surgery, P.C. v. St. John’s Episcopal Hospital, 164 A.D.3d 575 (2d Dep’t 2018), the covenant barred the surgeon from performing any type of surgery for two years within 10 miles of any of the practice’s seven offices and affiliated hospitals, including locations where he had never worked. The court held that the restriction was geographically unreasonable because it effectively barred him from practicing surgery in the New York metropolitan area, which far exceeded what was necessary to protect the practice’s interests. The court declined to partially enforce the covenant because it was clearly overbroad, the practice required it as a condition of hiring from a superior bargaining position, and it refused to negotiate the restriction.
WHAT’S PENDING IN ALBANY
New York Senate Bill S4641 passed the Senate in June 2025 and, as of this writing, remains in the Assembly Labor Committee. It would ban noncompetes for physicians regardless of income while preserving an exception for the sale of a practice. Separate physician-specific bills (S9228/A10981) would also address repayment of bonuses and training costs when a physician leaves a hospital employer.
THE NATIONAL PICTURE
i. Arkansas, Massachusetts, New Hampshire, and Wyoming: Prohibit physician noncompetes.
ii. Virginia: Bans noncompetes for most licensed health care professionals as of July 1, 2026.
iii. Maryland: Prohibits noncompetes for health care practitioners earning under $350,000.
iv. Oregon: Voids most physician noncompetes with hospitals and management services organizations.
v. Florida: Moves in the opposite direction by making certain “covered” noncompetes fully enforceable if notice requirements are met.
PRACTICAL TAKEAWAYS
i. Check the length and radius. Limit restricted areas to offices where you actually work, not every location the employer operates.
ii. Watch for clawbacks. Some agreements require repayment of bonuses, relocation expenses, or training costs when a physician leaves—terms that can function as disguised noncompetes.
iii. Plan your exit if you sell a practice. Sale-of-business noncompetes are treated differently and are generally enforced more readily.
iv. Confirm which state’s law applies. If you practice near a state line, review the choice-of-law clause because it can affect your legal rights.
v. Get it reviewed. Because the law is changing quickly, have your agreement reviewed by a legal professional before signing or giving notice.
Please note that this article is for general informational purposes only, is not legal advice, and does not create an attorney-client relationship. Because each situation is unique, the information is general in nature and should not be considered a substitute for legal counsel. Readers should not take, or refrain from taking, any action based on the information in this article without first seeking legal advice from competent counsel.
