HOUSE BUSINESS AND EMPLOYMENT COMMITTEE SUBSTITUTE FOR

HOUSE BILL 52

52nd legislature - STATE OF NEW MEXICO - first session, 2015

AN ACT

RELATING TO PUBLIC HEALTH; MAKING NON-COMPETE PROVISIONS IN CERTAIN HEALTH CARE PRACTITIONER AGREEMENTS UNENFORCEABLE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] DEFINITIONS.--As used in this act:

          A. "agreement" means a written contract to which a health care practitioner is a party; and

          B. "health care practitioner" means:

                (1) a dentist;

                (2) an osteopathic physician;

                (3) a physician;

                (4) a podiatrist; and

                (5) a certified registered nurse anesthetist.

     SECTION 2. [NEW MATERIAL] ENFORCEABILITY OF A NON-COMPETE PROVISION.--A non-compete provision in an agreement, which provision restricts the right of a health care practitioner to provide clinical health care services, shall be unenforceable upon the termination of:

          A. the agreement;

          B. a renewal or extension of the agreement; or

          C. a health care practitioner's employment with a party seeking to enforce the agreement.

     SECTION 3. [NEW MATERIAL] ENFORCEABILITY OF OTHER PROVISIONS.--Nothing in this act shall be construed to limit the enforceability of:

          A. a provision in an agreement requiring a health care practitioner who has worked for an employer for an initial period of less than three years to repay all or a portion of:

                (1) a loan;

                (2) relocation expenses;

                (3) a signing bonus or other remuneration to induce the health care practitioner to relocate or establish a health care practice in a specified geographic area; or

                (4) recruiting, education and training expenses;

          B. a nondisclosure provision relating to confidential information and trade secrets;

          C. a nonsolicitation provision with respect to patients and employees of the party seeking to enforce the agreement for a period of one year or less after the last date of employment; or

          D. any other provision of an agreement that is not in violation of law, including a provision for liquidated damages.

     SECTION 4. [NEW MATERIAL] LIQUIDATED DAMAGES.--

          A. An agreement may provide for liquidated damages in an amount that is reasonable at the time the agreement is executed and in light of anticipated harm and difficulty of proving the amount of loss resulting from breach of the agreement by any party.

          B. A provision in an agreement fixing unreasonably large liquidated damages is void as a penalty.

     SECTION 5. [NEW MATERIAL] APPLICABILITY.--

          A. This act does not apply to agreements between health care practitioners who are shareholders, owners, partners or directors of a health care practice.

          B. The provisions of this act apply to agreements, or renewals or extensions of agreements, executed on or after July 1, 2015.

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