Florida Senate - 2022                                     SB 842
       By Senator Brodeur
       9-00540-22                                             2022842__
    1                        A bill to be entitled                      
    2         An act relating to invalid restrictive covenants in
    3         health care; amending s. 542.336, F.S.; defining the
    4         terms “hospital” and “physician”; specifying that
    5         certain restrictive covenants in employment agreements
    6         between physicians and hospitals do not support a
    7         legitimate business interest; authorizing a party to
    8         an employment agreement to elect to have a mutually
    9         agreed upon arbitrator make a specified binding
   10         determination; providing a legislative finding;
   11         providing applicability; providing an effective date.
   13  Be It Enacted by the Legislature of the State of Florida:
   15         Section 1. Section 542.336, Florida Statutes, is amended to
   16  read:
   17         542.336 Invalid restrictive covenants.—
   18         (1)As used in this section, the term:
   19         (a)“Hospital” means a hospital as defined in s.
   20  395.002(13) which is licensed under chapter 395 and part II of
   21  chapter 408.
   22         (b)“Physician” means a person licensed to practice
   23  medicine under chapter 458 or osteopathic medicine under chapter
   24  459.
   25         (2) A restrictive covenant entered into with a physician
   26  who is licensed under chapter 458 or chapter 459 and who
   27  practices a medical specialty in a county wherein one entity
   28  employs or contracts with, either directly or through related or
   29  affiliated entities, all physicians who practice such specialty
   30  in that county is not supported by a legitimate business
   31  interest. The Legislature finds that such covenants restrict
   32  patient access to physicians, increase costs, and are void and
   33  unenforceable under current law. Such restrictive covenants
   34  shall remain void and unenforceable for 3 years after the date
   35  on which a second entity that employs or contracts with, either
   36  directly or through related or affiliated entities, one or more
   37  physicians who practice such specialty begins offering such
   38  specialty services in that county.
   39         (3)A restrictive covenant in an employment agreement
   40  between a physician and a hospital is not supported by a
   41  legitimate business interest if it does not include an option
   42  for the physician to buy out of the restrictive covenant at a
   43  reasonable price. Any party to an employment agreement which
   44  believes that the price to buy out of the restrictive covenant
   45  in the agreement is unreasonable may elect to have a mutually
   46  agreed upon arbitrator determine a reasonable price, and such
   47  arbitrator’s decision is binding on the parties. The Legislature
   48  finds that a restrictive covenant without this option limits
   49  patient access to physicians and increases costs and is void and
   50  unenforceable. This subsection applies to restrictive covenants
   51  entered into on or after July 1, 2022.
   52         Section 2. This act shall take effect July 1, 2022.