HOUSE BILL 385

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Eleanor Chávez

 

 

 

 

 

AN ACT

RELATING TO PUBLIC HEALTH; MAKING NONSOLICITATION PROVISIONS IN CERTAIN HEALTH CARE PRACTITIONER AGREEMENTS UNENFORCEABLE.

 

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

     SECTION 1. Section 24-1I-2 NMSA 1978 (being Laws 2015, Chapter 96, Section 2, as amended) is amended to read:

     "24-1I-2. ENFORCEABILITY OF A NON-COMPETE OR NONSOLICITATION PROVISION--OTHER PROVISIONS VOID.--

          A. A non-compete provision in an agreement, which provision restricts the right of a health care practitioner to provide clinical health care services in this state, shall be unenforceable upon the termination of:

                (1) the agreement;

                (2) a renewal or extension of the agreement; or

                (3) a health care practitioner's employment with a party seeking to enforce the agreement.

          B. A provision in an agreement for clinical health care services to be rendered in this state is void, unenforceable and against public policy if the provision:

                (1) makes the agreement subject to the laws of another state; or

                (2) requires any litigation arising out of the agreement to be conducted in another state.

          C. A nonsolicitation provision in an agreement, which provision restricts the right of a health care practitioner to solicit patients or employees of the party seeking to enforce the agreement, shall be unenforceable upon the termination of:

                (1) the agreement;

                (2) a renewal or extension of the agreement; or

                (3) a health care practitioner's employment with a party seeking to enforce the agreement."

     SECTION 2. Section 24-1I-3 NMSA 1978 (being Laws 2015, Chapter 96, Section 3) is amended to read:

     "24-1I-3. ENFORCEABILITY OF OTHER PROVISIONS.--Nothing in [this act] Chapter 24, Article 1I NMSA 1978 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; or

          [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.] C. any other provision of an agreement that is not in violation of law, including a provision for liquidated damages."

     SECTION 3. Section 24-1I-5 NMSA 1978 (being Laws 2015, Chapter 96, Section 5, as amended) is amended to read:

     "24-1I-5. APPLICABILITY.--

          A. Chapter 24, Article 1I NMSA 1978 does not apply to agreements between health care practitioners who are shareholders, owners, partners or directors of a health care practice.

          B. Except as provided by [Subsection] Subsections C and D of this section, the provisions of Chapter 24, Article 1I NMSA 1978 apply to agreements, or renewals or extensions of agreements, executed on or after July 1, 2015.

          C. The provisions of Subsection B of Section 24-1I-2 NMSA 1978 apply to agreements, or renewals or extensions of agreements, executed on or after [the effective date of this 2017 act] April 6, 2017.

          D. The provisions of Subsection C of Section 24-1I-2 NMSA 1978 apply to agreements, or renewals or extensions of agreements, executed on or after the effective date of this 2023 act."

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