A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING CHAPTER 9 TO TITLE 41 SO AS TO PROHIBIT NONCOMPETE CLAUSES IN PHYSICIAN CONTRACTS, TO PROTECT PATIENT FREEDOM OF CHOICE, TO DEFINE IMPERMISSIBLE RESTRICTIONS ON PHYSICIAN PRACTICE, TO ALLOW CERTAIN RECOUPMENT OF EXPENSES AND PROTECTION OF LEGITIMATE BUSINESS INTERESTS, AND TO PROVIDE FOR APPLICABILITY.
H. 4767, the “Physician Noncompete Contract Prohibition Act,” would add a new chapter to Title 41 of the South Carolina Code to bar noncompete clauses in physician contracts. The bill declares such clauses contrary to public policy because they interfere with a patient’s choice of physician and a physician’s ongoing duty to patients. It makes void and unenforceable any contractual term that restricts a physician from practicing medicine in a geographic area after leaving a practice, continuing to treat or advise current patients who request it, establishing a physician-patient relationship with patients who choose to follow the physician, or complying with patient-notification obligations tied to departure from a practice.
At the same time, the bill preserves certain employer and practice protections. It allows repayment obligations for specified relocation, signing, retention, recruiting, education, or training expenses for physicians who leave within three years, so long as those costs and their values were disclosed in the written agreement at signing. It also allows retention-bonus repayment for up to two years and expressly preserves protection of trade secrets and other confidential business information. The law would apply only to contracts or renewals entered into on or after the effective date, and it would take effect upon gubernatorial approval.
The bill would create a new statutory framework in Title 41 governing physician employment and partnership agreements in South Carolina. It would invalidate physician noncompete provisions and limit the enforceability of related post-employment restrictions, while leaving room for narrowly defined repayment provisions and protection of legitimate business interests. The practical effect would be to increase physician mobility, reduce contractual barriers to patient continuity of care, and constrain how medical practices, hospitals, and other employers structure physician contracts going forward.
The available legislative history suggests generally favorable sentiment toward the bill, as reflected by the Senate Labor, Commerce and Industry Committee’s favorable report. In the House, the bill advanced despite several close and contested votes, including an initial passage vote and later procedural motions that were defeated or narrowly decided. Overall, the bill appears to have had meaningful support, but not without significant opposition or concern on the floor.
The main point of contention is the balance between physician mobility and patient choice on one hand, and the ability of medical employers and practices to protect investments and business interests on the other. Supporters appear to favor eliminating noncompetes to preserve patient access and physician autonomy. Opponents likely focused on preserving recruitment incentives, repayment of training and relocation costs, and the ability of practices to protect confidential information and retain physicians. The close votes on amendments and procedural motions indicate disagreement over how broadly to prohibit restrictions and how much protection to preserve for employers.