The Virginia General Assembly recently passed legislation reforming non-compete clauses for physicians statewide. Together, Virginia Senate Bill 128 and Virginia House Bill 627 will effectively ban non-compete agreements for Virginia health care professionals. Understandably, these changes mark pivotal, positive structural developments for a profession defined by years of precise and high-stakes training. Their passing is a welcome step that nonetheless falls short in substance, leaving tangible payment gaps for new physicians on Grounds. For current students and trainees, every policy enforced, contract signed and restriction placed in hospitals has an enormous impact on their futures. And when lawmakers overlook financial realities, they risk derailing both students and trainees’ future careers and the entirety of the University’s medical education.
Specifically, the bills restrict employers from creating, enforcing or threatening non-competes for health care workers such as nurses, physicians, therapists, social workers and more. Any employer who violates these terms is subject to a $10,000 fine per violation. Both bills were passed by the Senate and House — SB128 March 12 and HB627 March 30 — and are awaiting Gov. Abigail Spanberger’s signature into law. Although the bills together effectively close the front door on non-competes, they leave small legal loopholes regarding repayment fees that will continue to impact every resident and future medical professional at the University.
The bills technically confirm that employers cannot force a medical professional into a non-compete as a part of their contract. The caveat, though, is that employers can still require repayment of recruitment and training costs if a physician leaves. For most physicians, that is merely a formality. For residents specifically, though, that caveat is their entire job — their work is simultaneously their training. Although an employer cannot explicitly limit a resident from leaving, they can still require that resident to pay tens of thousands of dollars in training costs — a reality that makes leaving so financially difficult that it almost mirrors a non-compete.
Given that the repayment loophole still exists, though, the problem manifests close to home. U.Va. Health is simultaneously the entity the bills are designed to protect physicians from, and the entity responsible for training these medical professionals. This contradiction remains the heart of why this legislation remains unfinished, despite awaiting final approval by Spanberger. The Commonwealth’s own flagship university has the potential to become the very loophole the General Assembly failed to close, effectively financially binding physicians to Charlottesville at the exact time Virginia needs them spreading across rural and underserved regions.
While this particularly threatens individuals newly entering the medical profession, these bills have consequential benefits for current U.Va. Health medical professionals, both regarding their careers and the patients they aim to serve. Firstly, medical professionals searching for a new — or even their first — job are unequipped with leverage or negotiating power. As a result, more than 45 percent of primary care physicians are pushed into restrictive non-competes without understanding the consequences of their contracts, which affects the rest of their career. Being terminated or leaving a position results in the loss of the ability to practice medicine where a physician built their career — exiling them from the patients and communities they spent years earning the trust of.
This logic is similar to the financial world, where traders and bankers are restricted from joining competitors after leaving a firm to protect market intelligence, strategies and client relationships. The reality, though, is that medicine is not finance. A physician’s values belong in their judgment, knowledge, relationships and presence in a community — nothing that “belongs” to a hospital. Equating medical professionals to Wall Street bankers, therefore, completely misrepresents what medicine is and who it is intended to serve. HB 627 and SB 128 are initiatives toward correcting that misrepresentation and recognizing that a physician’s loyalty belongs to their community, not to the health system that signed their last paycheck.
The fix to this issue does not require starting over completely, but just finishing the job. HB 627 and SB 128 are incredible steps in the right direction. With Spanberger’s signature, they will undoubtedly benefit the medical community in Virginia. However, it is imperative that the legislature recognize that closing the non-compete loophole while leaving repayment loopholes open is only a half-solution — a half-solution that needs to be rectified.
U.Va. Health now has a rare opportunity to set a new standard in the medical field, rather than passively waiting for the Virginia legislature to do so. As an institution, U.Va. Health can close its own loopholes by voluntarily removing any potential for repayment costs. This demonstration would reflect not only that protecting medical professionals is the job of the Commonwealth but also of the institutions themselves. Virginia has proved to the medical world and beyond that it understands what medicine is and who it is intended to serve. For their students, educators, residents, physicians and beyond, it is time for the University to prove it does, too.
Lucy Duttenhofer is an opinion columnist who writes about academics for The Cavalier Daily. She can be reached at opinion@cavalierdaily.com.
The opinions expressed in this column are not necessarily those of The Cavalier Daily. Columns represent the views of the authors alone.
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