A bill

 

TO AMEND THE SOUTH CAROLINA CODE of laws BY ADDING CHAPTER 9 TO TITLE 41 SO AS TO PROHIBIT NONCOMPETE CLAUSES IN PHYSICIAN CONTRACTS, TO PROTECT PATIENT FREEDOM OF CHOICE, TO DEFINE IMPERMISSIBLE RESTRICTIONS ON PHYSICIAN PRACTICE, TO ALLOW CERTAIN RECOUPMENT OF EXPENSES AND PROTECTION OF LEGITIMATE BUSINESS INTERESTS, AND TO PROVIDE FOR APPLICABILITY.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  This act may be cited as the "Physician Noncompete Contract Prohibition Act."

 

SECTION 2.  Title 41 of the S.C. Code is amended by adding:

 

CHAPTER 9

 

Physician Noncompete Contract Prohibition

 

    Section 41-9-110.   Contracts with physicians containing noncompete clauses are considered interference with the establishment or maintenance of a patient's choice of physician and are against the public policy of the State of South Carolina.

 

    Section 41-9-120.   (A) A physician licensed to practice medicine pursuant to the provisions of Chapter 47, Title 40 has a direct, personal, and individual duty and responsibility to his patients, regardless of his form of practice or employment.

    (B) Impermissible, unenforceable, and void restrictions under subsection (A) are:

       (1) any restriction on the ability of a physician to practice medicine in any geographic area for any period of time after the termination of such partnership, employment, or professional relationship;

       (2) any restriction on the ability of a physician to continue to provide treatment, advise, or consult with any current patient at the patient's request, after the termination of such partnership, employment, or professional relationship;

       (3) any restriction on the right of a physician to establish a physician-patient relationship with any patient, at that patient's request, upon his departure from the partnership, employer, or other entity. No partnership, employer, or other entity has a responsibility to assist a physician that has departed with the establishment of a physician-patient relationship; and

       (4) any restriction on the obligation of a physician as determined by the Board of Medical Examiners, including the withholding of information, to notify patients of his or her departure from such partnership, employment, or professional relationship including how the patient can obtain his medical record, and how to seek continued treatment from the physician, if the patient chooses. The partnership, employer, or other professional entity may specify in the written contract or agreement that it will undertake this notification on behalf of the physician. If the physician requests notification to his or her patients, the notification will be given as soon as possible. Notification must be given by the later of:

           (a) thirty days after the physician's departure; or

           (b) thirty days after the physician provides the new practice information in writing to the partnership, employer, or other professional organization.

 

    Section 41-9-130.   (A) Nothing in this chapter may be construed to prevent a partnership, employer, or other entity from requiring a departing physician who has worked for the partnership, employer, or other entity for less than three years to repay all or a portion of the actual costs of the following if the specific items and actual value of each item the partnership, employer, or other entity may seek in repayment are outlined and agreed to within the written agreement at the time of signing:

       (1) relocation expenses;

       (2) signing and retention bonus;

       (3) other renumeration to induce the physician to relocate or establish a healthcare practice in a specified geographic area, or recruiting, education or training expenses.

    (B) Nothing in this chapter may be construed to prevent a partnership, employer, or other entity from requiring a departing physician who has worked for the partnership, employer, or other entity from having to repay a retention bonus as long as the repayment period does not exceed two years from the date of signing.

    (C) Nothing in this chapter may be construed to prevent a partnership, employer, or other entity from protecting other recognizable business interests such as:

       (1) trade secrets as defined in Section 39-8-20(5); and

       (2) confidential information such as compensation, management and marketing plans, pricing, business strategies, software, code, forms that may not otherwise qualify as trade secrets but are treated as confidential by the entity, business models and data, manuals, financial and investment information, and commercial relationships with specific vendors.

 

    Section 41-9-140.   The requirements of this chapter apply to contracts or renewals of contracts entered into on or after the effective date of this chapter.

 

SECTION 3.  If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

 

SECTION 4.  This act takes effect upon approval by the Governor.

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