New Mexico Non-Compete Limitation

In line with the recent trend of states imposing limitations on physician non-compete clauses, New Mexico’s Senate Bill 325, signed into law in April 2015, prohibits provisions in agreements which restrict the right of healthcare practitioners (including physicians, osteopathic physicians, dentists, podiatrists and certified registered nurse anesthetists) to provide clinical healthcare services (i.e. non-compete provisions). That said, the law does give medical practices some rights to protect their interests. Specifically, practice agreements may contain non-disclosure provisions relating to confidential information; non-solicitation provisions of no more than one (1) year; and impose reasonable liquidated damages provisions if the practitioner does provide clinical healthcare services of a competitive nature after termination of the agreement. In addition, healthcare practitioners employed by the practice for less than three (3) years may be required, upon termination, to pay back certain expenses to the practice, including loans; relocation expenses; signing bonuses or other incentives related to recruitment; and education/training expenses. Finally, the law does not limit non-compete provisions in agreements between shareholders, owners, partners or directors of the practice. The specific language of the law is available at: http://www.sos.state.nm.us/uploads/files/SB325-CH96-2015.pdf.