House lawmakers have approved a proposal to expand the list of health care occupations exempted from noncompete agreements.
The agreements are included in some employment contracts. They restrict former employees’ ability to start, or work for, a competing business.
HB 1185 would allow counselors, physical therapists and speech language pathologists to join the list of health care practitioners already exempted from the restrictions under state law.
Rep. Fred Deutsch, R-Florence, is the bill’s primary sponsor. He told legislators Tuesday noncompete agreements push health care workers out of communities, leaving patients in “limbo” while they try to find an alternative.
“That’s particularly disturbing in rural districts like mine, where the patient has to drive for miles to find another option,” he said.
Deutsch noted the bill includes language allowing employers to prevent former employees from poaching clients or patients.
Rep. Steve Duffy, R-Rapid City, voted against the bill. He called the proposal a “slippery slope.”
“I have grown up in a small town,” Duffy said. “It costs a great deal of money to get health care providers, or really any other kind of employees there.”
Representatives for Avera Health and Gov. Kristi Noem supported the legislation in the House Local Government Committee.
The bill passed 63-5, and now goes to the Senate for approval. If adopted, it would affect contracts signed after July 1.
The Federal Trade Commission is currently pursuing a rule that would ban noncompete agreements nationally.
