1Limiting restrictive covenants in health care practitioner
2employment agreements.

3The General Assembly of the Commonwealth of Pennsylvania
4hereby enacts as follows:

5Section 1. Definitions.

6The following words and phrases when used in this act shall
7have the meanings given to them in this section unless the
8context clearly indicates otherwise:

9"Health care practitioner." As defined in section 103 of the
10act of July 19, 1979 (P.L.130, No.48), known as the Health Care
11Facilities Act.

12"Prior Patient." A patient to which a health care
13practitioner rendered professional services in the health care
14practitioner's scope of practice for which compensation has been
15received by the health care practitioner, regardless of the
16source of the compensation, within three years of the separating
17event.

18Section 2. Prohibition.

1Except as set forth in section 3, a contract or agreement
2which creates or establishes the terms of an employment
3relationship with a health care practitioner, which includes a
4restriction of the right of the health care practitioner to
5practice in a geographic area for a period of time after the
6termination of the employment relationship, or prohibits a
7health care practitioner from treating a prior patient, shall be
8void and unenforceable with respect to said restriction.

9Section 3. Exception.

10Section 2 shall not be construed to render void or
11unenforceable the remaining provisions of a contract or
12agreement, including a buyout clause that requires a health care
13practitioner to reimburse the employer for reasonable expenses
14incurred in recruiting the health care practitioner and
15establishing the health care practitioner's patient base.

16Section 4. Buyout clause.

17A buyout clause otherwise permitted by this section may
18include liquidated damages, provided that the amount is
19reasonable. A buyout clause shall be void if:

20(1) The clause contains a term fixing unreasonably large
21liquidated damages.

22(2) The employer terminated the employment relationship
23actually or constructively.

24Section 5. Applicability.

25This act shall only apply to contracts entered into on or
26after the effective date of this act.

27Section 6. Effective date.

28This act shall take effect in 60 days.