Rhode Island rejects a noncompete ban in favor of a nurse exemption

The Rhode Island legislature was hard at work this session, with four noncompete bills.

Two of the bills were to ban noncompetes (one in the Senate and one in the House). The other two (one in the Senate and one in the House) were to create an exemption from noncompetes for advanced practice registered nurses.

Despite some initial concern that Rhode Island Governor Dan McKee would (like Minnesota Governor Tim Waltz, Maine’s Governor Janet Mills, and New York’s Governor Kathy Hochul) be presented with a bill that fell prey to the hype that noncompetes are always bad, he was not.

Instead, he was presented with, and signed (yesterday, June 17), the bills providing for an exemption from noncompetes for advanced practice registered nurses.

The exemption is a typical one, insofar as it bans noncompetes for practicing advanced practice registered nurses, but allows them to enter sale-of-business noncompetes.

Although most laws in Rhode Island take effect on July 1, the new law says that it takes effect “upon passage.” The text of the new law is as follows:

SECTION 1. Chapter 5-34 of the General Laws entitled “Nurses” is hereby amended by adding thereto the following section:

5-34-50. APRN restrictive covenants void.

(a) Any contract or agreement that creates or establishes the terms of a partnership, employment, or any other form of professional relationship with an advanced practice registered nurse (“APRN”) licensed to practice pursuant to § 5-34-45 that includes any restriction of the right of the APRN to practice shall be void and unenforceable with respect to said restriction; provided, however, that nothing herein shall render void or unenforceable the remaining provisions of any such contract or agreement.

(b) Restrictions rendered void under subsection (a) of this section shall include, but shall not be limited to the following:

(1) The right to practice in any geographic area for any period of time after the termination of the partnership, or professional relationship;

(2) The right of an APRN to provide treatment, advise, consult with or establish a professional relationship with any current patient of the employer; and

(3) The right of an APRN to solicit or seek to establish a professional relationship with any current patient of the employer.

(c) Notwithstanding the foregoing, the prohibition on advanced practice registered nurse covenants shall not apply in connection with the purchase and sale of a practice; provided the restrictive covenant and non-compete covenant is for a period of time of not more than five (5) years.

SECTION 2. This act shall take effect upon passage.

It is still possible that the Rhode Island Legislature could send a full ban to the Governor, but that would immediately render the newly passed nurse exemption meaningless. Given that, I suspect a ban is unlikely.

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Note that if you’re tracking the bills, we still have bills to ban pending in Illinois, Massachusetts, Michigan, and New York City. Earlier this year, bills to ban noncompetes in Maine, Virginia, and Wisconsin all failed.

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Additional firm resources: 

We know how hard it is to keep up with the ever-changing requirements around the country. To help, we have created the following resources (available for free):

We hope you find all of these resources useful. More are coming.

And please note that we are grateful for all of the input we’ve received over the years, and welcome any suggestions for improvements that you may be willing to share.

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*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills around the country and helping me make sure that all of our resources are current and accurate. And thank you to Evan Starr for reaching out about the proposed ban.