Earlier this year, Rhode Island passed a new law concerning the use of noncompete agreements with certain employees. One of the main purposes of the act is to protect young and low-wage employees but it can also have an impact on noncompete agreements for other employees. Because this law is new, it is important to understand how it may have an impact on your practice and on your employees.
Here’s what you need to know:
What is it the Rhode Island Noncompetition Agreement Act?
The Rhode Island Noncompetition Agreement Act was passed in July 2019. Under the new law, noncompete agreements, which is an agreement between employers and employees (or prospective employees) that the employee will not engage in certain activities that would compete against the current employer after the employment has ended, are prohibited for certain types of employees. These types of employees include:
- Students participating in an internship
- Employees 18 years old and under
- Low wage employees (earn less than 250% of the federal poverty level)
- Nonexempt employees under the Fair Labor Standards Act
When does it go into effect?
The Act went into effect January 15, 2020. After this date, non-compete agreements will no longer be enforceable against the name types of employees.
Why does it matter to healthcare practitioners?
Whether you own a medical, dental, veterinary, optometry or any other type of health care practice, this law can have an impact with your employees. It is important to know that if you have employees that fall into one of the above mentioned categories, you cannot enforce a noncompete agreement against them.
Because these types of practices rely heavily on getting and keeping valuable repeat clients, you may have used noncompete agreements in the past. Perhaps you used these agreements to prevent an employee from taking client information or other business practices and going to another employer. However, now as a result of the new law, you will not be able to use a noncompete to prevent these types of employees from working with a competitor. This can have an impact on hiring (should you risk hiring a student or a low wage employee?) and how you choose to classify those who work for you. It may also impact your employment contracts—though the law prohibits noncompete agreements, it does still offer some protections for employers in the form of nondisclosure agreements and confidentiality agreements. Your current employment agreements may need to be edited.
Look at Your Noncompete Agreements Now
You’ll want to make sure that your employment agreements are within the bounds of the new law. If adjustments need to be made to your employment agreements to protect your practice after an employee leaves, you will want to make those now.
At HR for Health, our goal is to keep you on the right side of the law and help you avoid very costly mistakes. We have a wide range of services to handle compliance with the new law, hiring, and all your other HR needs. Contact us to find out more on how HR for Health can help your practice by calling 877.779.4747, or by emailing: [email protected] today!
If you have questions about the new changes to New York’s workplace anti-discrimination law or any other questions, contact HR for Health today to by calling 877.779.4747, or email us at: [email protected]!
HR for Health is one of the nation’s leading Human Resources Management Systems (HRMS) used by small to mid-sized practices. HR for Health has provided the following complimentary articles to ensure you have a game plan when addressing complex HR matters.
Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health’s HR services
