By: Jude C. Bursavich
Louisiana employers who rely on physician non-compete agreements should review those agreements immediately. Changes to Louisiana law that became effective January 1, 2025, may render many existing physician non-compete agreements unenforceable because they do not comply with the statute’s new limitations. As a result, employers should consider updating their agreements to help ensure they remain enforceable.
Effective January 1, 2025, Louisiana non-compete law for most Louisiana physicians was changed significantly. La. R.S. 23:921, the single provision in Louisiana governing the enforceability of these agreements, now distinguishes between “primary care physicians” and “non-primary care physicians.” “Primary care physician” is defined as “a physician who predominantly practices general family medicine, general internal medicine, general pediatrics, general obstetrics or general gynecology.”
For “primary care physicians”, any provision restraining them from practicing medicine shall not exceed three years from the effective date of the initial agreement. If the primary care physician remains at that employer for three years, the non-compete provision is no longer enforceable. Any subsequent agreement between the employer and the primary care physician executed after the three-year term cannot include a non-compete provision.
If the agreement is terminated by the primary care physician prior to the initial three-year term, however, the non-compete provision can be enforced against that physician for the standard two-year period from the date of termination of employment. It can only be enforced in no more than three parishes, including the parish in which the primary care physician’s principal practice is located, and no more than two additional contiguous parishes in which the employer carries on a like business.
For those not meeting the definition of a “primary care physician”, the limitations are exactly the same, except the three-year period is extended to five years. Neither the three-year nor five-year period applies to physicians employed or under contract with a rural hospital, or any physician employed by or under contract with a federally qualified health care center. These physicians are subject to the standard rules for non-compete agreements.
The practical impact of these statutory changes extends beyond agreements executed after January 1, 2025. Because physician non-compete agreements entered into before that date generally were not drafted to comply with the new three- and five-year limitations measured from the inception of the agreement, Louisiana courts may determine that many existing agreements are unenforceable. Employers should therefore promptly review and, where appropriate, replace their physician non-compete agreements with versions that comply with current Louisiana law.
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