Restricts use of restrictive employment covenants for physicians and nurses.

A1647

ASSEMBLY, No. 1647

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman MELINDA KANE

District 6 (Burlington and Camden)

Co-Sponsored by:

Assemblywoman Speight

SYNOPSIS

���� Restricts use of restrictive employment covenants for
physicians and nurses.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning health care professionals and
supplementing Title 45 of the Revised Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.� Except as provided
in subsection b. of this section, any contract or agreement that creates or
establishes the terms of a partnership, employment, or other form of
professional relationship with a licensed physician, which includes any
restriction of the right of the physician to practice medicine in any
geographic area for any period of time after termination of the partnership,
employment, or professional relationship, shall be void and unenforceable with
respect to the restriction.

���� b.��� Nothing in this section
shall be construed to render void or unenforceable:

���� (1)� a restrictive covenant
that prohibits a physician from leaving a hospital system or a group practice
comprising 30 or more physicians to join any other hospital system or group
practice comprising 30 or more physicians within a given geographic area;

���� (2) a restrictive covenant
that prohibits a physician from leaving a hospital system or a group practice
comprising 30 or fewer physicians to join any other hospital system or group
practice comprising 30 or fewer physicians within a given geographic area;

���� (3)� a restrictive covenant
that prohibits a physician from leaving a federally qualified health center to
practice medicine within a five mile radius of federally qualified health
center for a period of time that is no longer than four years;

���� (4)� a restrictive covenant
that prohibits a physician from leaving a hospital system or a group practice
when the hospital system or group practice provided the physician a unique
incentive to join the hospital system or group practice, which incentive is expressly
identified in the contract between the physician and the hospital system or
group practice; or

���� (5) any remaining provisions
of the contract or agreement that do not establish a restriction on the right
to practice medicine in a geographic area.

���� c.��� For the purposes of
paragraph (2) of subsection b. of this section, the term �unique incentive� may
include, but shall not be limited to, commencing a new program or service,
opening a new laboratory, providing a signing bonus of more than $50,000, or, in
the case of a hospital system, opening a new practice group.

���� 2.� This act shall take effect
immediately, and shall apply to contracts and agreements entered into by
physicians on or after the effective date of this act.

STATEMENT

����� Except as provided below, this bill provides that any
contract or agreement that creates or establishes the terms of a partnership,
employment, or other form of professional relationship with a licensed
physician, which includes any restriction of the right of the physician to
practice medicine in any geographic area for any period of time after
termination of the partnership, employment, or professional relationship, is to
be void and unenforceable with respect to the restriction.

����� Nothing in the bill is to be construed to render void
or unenforceable: (1) a restrictive covenant that prohibits a physician from
leaving a hospital system or a group practice comprising 30 or more physicians
to join any other hospital system or group practice comprising 30 or more
physicians within a given geographic area; (2) a restrictive covenant that
prohibits a physician from leaving a hospital system or a group practice
comprising 30 or fewer physicians to join any other hospital system or group practice
comprising 30 or fewer physicians within a given geographic area; (3) a
restrictive covenant that prohibits a physician from leaving a federally
qualified health center to practice medicine within a five mile radius of
federally qualified health center for a period of time that is no longer than
four years; (4) a restrictive covenant that prohibits a physician from leaving
a hospital system or a group practice when the hospital system or group
practice provided the physician a unique incentive to join the hospital system
or group practice, which incentive is expressly identified in the contract
between the physician and the hospital system or group practice; or (5) any
remaining provisions of the contract or agreement that do not establish a
restriction on the right to practice medicine in a geographic area.