SB3607 104TH GENERAL ASSEMBLY

LRB104 18022 SPS 31461 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3607

Introduced 2/5/2026, by Sen. Steve Stadelman

SYNOPSIS AS INTRODUCED:

New Act

Amends the Fair Contracting for Health Care Practitioners Act. Provides that, except as otherwise provided, a covenant not to compete entered into on or after the effective date of the Act is deemed contrary to the public policy and is void and unenforceable by an employer. Provides that an employer may enforce a covenant not to compete if the length of the covenant not to compete is no more than one year, provided that the health care practitioner was not dismissed by the employer. Sets forth provisions concerning the scope of the Act. Effective January 1, 2027.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Fair Contracting for Health Care Practitioners Act.

Section 5. Definitions. As used in this Act:

"Employer" means a person or group of persons that employ a health care practitioner at a health care facility.

"Health care facility" means the office, facility, or location where a majority of the revenue derived from a health care practitioner's services is generated.

"Health care professional" means a physician licensed to practice medicine in all its branches under the Medical Practice Act of 1987, an advanced practice registered nurse or certified registered nurse anesthetist licensed under the Nurse Practice Act, or a physician assistant licensed under the Physician Assistant Practice Act of 1987.

"Covenant not to compete" means an agreement that is entered into between an employer and a health care practitioner in this State that has the effect of impeding the ability of the health care practitioner to continue treating patients or accepting new patients, either practicing independently or in the employment of a competing employer after the term of employment is concluded.

"Patient" means an individual to whom a health care practitioner has rendered professional services within the practitioner's scope of practice for which compensation has been received by the health care practitioner, regardless of the source of the compensation.

Section 10. Covenants not to compete for health care practitioners.

(a) Except as provided under subsection (b), a covenant not to compete entered into on or after the effective date of this Act is deemed contrary to the public policy and is void and unenforceable by an employer.

(b) An employer may enforce a covenant not to compete if the length of the covenant not to compete is no more than one year, provided that the health care practitioner was not dismissed by the employer.

(c) Nothing in this Section shall be construed to:

(1) prohibit the enforcement of a contract provision that allows an employer to recover reasonable expenses from a health care practitioner, if the expenses are:

(A) directly attributable to the health care practitioner and accrued within the 3 years prior to separation, unless separation is caused by the dismissal of the health care practitioner;

(B) related to relocation, training, and establishment of a patient base; or

(C) amortized over a period of up to 5 years from the date of separation by the health care practitioner; or

(2) void or render a covenant not to compete entered into with a health care practitioner with an interest in a business entity unenforceable as a direct result of:

(A) the sale of an ownership interest in all or substantially all of the assets of the business entity;

(B) a transaction resulting in the sale, transfer, or other disposition of control of the business entity, including by merger or consolidation; or

(C) the health care practitioner's receipt, by purchase, grant, award, issuance, or otherwise of an ownership interest in the business entity.

For purposes of this subsection, "control" means the possession, directly or indirectly, of the power to direct the management and policies of a business entity, whether through the ownership of voting securities, by contract or otherwise.

(d) A preexisting covenant not to compete may be rendered void and unenforceable under this Section if a health care practitioner is not a party to the sale, transfer, or other disposition of a business entity as described in subparagraph (A) of paragraph (2) of subsection (c).

Section 99. Effective date. This Act takes effect January 1, 2027.