November 6th, 2025
What, If Anything, Happened to Physician Non-Competes in 2025 in Oregon, Washington, Montana, and California? By Jim Vogele
It’s time to update discussion on the topic of restrictive covenants now that much of the dust has settled following active legislative sessions in two of the states where I practice and provide physician contract reviews. I provide physician contracts reviews in Oregon, Washington, Montana and California. Oregon and Montana have seen significant changes in noncompete laws for physicians, but we’ll check-in here on all four jurisdictions.
CALIFORNIA
It is typically safe to start with California physician contract restrictive covenants since the permissible covenants in California are minimal (you should ideally find no more than confidentiality, trade secret, and invention assignments, although based on experience I can say that you might still see a nonsolicitation provision, which we can discuss during your contract review). In any event, Business & Professions Code 16600 has been effectively on the books since 1872 (originally enacted as section 1673 of the Civil Code). See Trossen, David R. “Edwards and Covenants Not to Compete In California: Leave Well Enough Alone,” 24 BERKELEY TECHNOLOGY AND LAW JOURNAL 539 (2009) (discussing history of the ban on noncompetes in California along with policy considerations)
https://btlj.org/data/articles2015/vol24/24_1_AR/24-berkeley-tech-l-j-0539-0560.pdf
Section 16600 precludes noncompetes in California then, just as it does now in its current version, which provides:
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(a) Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.
(b) (1) This section shall be read broadly, in accordance with Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy an exception in this chapter.
(2) This subdivision does not constitute a change in, but is declaratory of, existing law.
(c) This section shall not be limited to contracts where the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract.
(Amended by Stats. 2023, Ch. 828, Sec. 1. (AB 1076) Effective January 1, 2024.)
This much is clear: noncompetes are a no-go in California physician contracts (the exceptions are found in section 16602, and include sale of a business or dissolution of an LLC, which are developments outside the scope of most employment relationships).
Turning to nonsolicitation provisions the other most common restrictive covenant found in a physician noncompetes (setting aside confidentiality, trade secret, and invention assignment/work for hire provisions). A detailed discussion concerning the invalidity of nonsolicitation provisions under California law is beyond the scope of this brief article, but I will note that, as of November 2025, a number of recent California federal court decisions have ruled that nonsolicitation provisions are unlawful restraints on trade in California. While the California Court of Appeals and/or Supreme Court have the authority to conclusively opine on the parameters and interpretation of California law, the weight of the authority that does exist quite clearly provides that nonsolicitation provisions are not enforceable under California law.
See also this discussion from the California Court of Appeals:
3) Based on the foregoing it is clear that the noncompete and nonsolicitation clauses in the agreements with Dowell and Chapman are void and unenforceable [***21] under section 16600 and that their use violates section 17200. The broadly worded noncompete clause prevents Dowell and Chapman, for a period of 18 months after termination of employment with Biosense, from rendering services, directly or indirectly, to any competitor in which the services they may provide could enhance the use or marketability of a conflicting product by application of confidential information to which the employees had access during employment. Similarly, the broadly worded nonsolicitation clause prevents the employees for a period of 18 months postemployment from soliciting any business from, selling to, or rendering any service directly or indirectly to any of the accounts, customers or clients with whom they had contact during their last 12 months of employment. Ultimately, these provisions restrain the employees from practicing their chosen profession. Indeed, these clauses are similar to those found to be void under section 16600. (See, e.g., D’Sa, supra, 85 Cal.App.4th at p. 931; Kolani v. Gluska (1998) 64 Cal.App.4th 402, 407 [75 Cal. Rptr. 2d 257]; Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 860 [27 Cal. Rptr. 2d 573] (Metro Traffic).)
Dowell v. Biosense Webster, Inc., 179 Cal.App.4th 564, 575 (2009).
I will note, however, that because trade secret laws exist statutorily beyond the boundaries of written employment contracts, a contractual provision stating no more than that confidential information and/or trade secret data cannot be used to solicit would be more likely to survive judicial scrutiny.
OREGON
Among the four states where I provide physician contract reviews – California, Oregon, Washington, and Montana — Oregon physician noncompetes experienced the most impactful changes as a result of legislative action in 2025. You may have seen that sweeping changes were implemented regarding the Corporate Practice of Medicine (“CPM”) doctrine in Oregon. The changes targeted private equity acquisition of and involvement in medical practices, a nationwide development in recent years that has the subject of substantial scrutiny and criticism. Please note, however, if you have serious questions about CPM, this website and my law practice is not what you are looking for. For such questions, I recommend consultation with a healthcare law firm. My scope of practice is limited to employed physicians (or ‘independently contracted,’ i.e. IC physicians) and other healthcare practitioners in employment relationships.
In 2025, the Oregon Legislature passed two bills that we signed into law by Governor Kotek this summer.
The two bills were Senate Bill 951 and House Bill 3410.
The House Bill 3410, signed by Oregon Governor Tina Kotek on July 24, 2025, amended the earlier Senate Bill (which is part of the reason it’s taken a minute to absorb the likely impact of these bills).
Focusing on the noncompete aspect of these bills, which is within my bailiwick, note, first, that the impact is on “medical licensees.” These are defined as:
House bill 3410: “ . . . “(d) ‘ Medical licensee’ means an individual who is licensed in this state: (A) To practice medicine . . . (B) As a nurse practitioner . . . (C) As a nurse practitioner . . . or (D) To practice naturopathic medicine . . .”
Second, noncompetes are precluded – in past, present, or future contracts – unless the employer provides employee with documentation reflecting a 20% “recruitment investment” and, if so, can apply only for 5 years after the date of hire if the employee works in a county designated “as a health care shortage area” or 3 years after the date of hire if the employee does not provide medical services in a “health professional shortage area.”
Third, the 5-year and 3-year limitations effectively require sunset provisions, which mean that the noncompete will ‘go away’ after the specified tenure of employment. The gist of this is certainly not as beneficial to physicians and the other medical licensees covered by House Bill 3410, but it’s better than the previous law from a physician’s perspective.
The text of the Enrolled House Bill 3410 can be found here:
https://olis.oregonlegislature.gov/liz/2025R1/Downloads/MeasureDocument/HB3410/Enrolled
WASHINGTON
In June 2024, a new requirement was added to Washington law providing that notice of noncompetes must accompany a written or an oral offer of employment (the new aspect of this notice requirement pertains to oral offers). The text of the statute, RCW 49.62.020 indicates that if an offer letter is sent prior to a formal contract, the noncompete requirement should be included in the offer letter. The statute can be found here:
https://app.leg.wa.gov/RCW/default.aspx?cite=49.62.020&pdf=true
However, the reality is that sometimes the noncompete requirement simply isn’t included in the offer letter. Nonetheless, if the offer letter does not mention a noncompete, but upon receiving the contract it does include a noncompete, then then the Washington physician still has the option to reject the contract, or attempt to negotiate the noncompete terms. The better practice on the part of the employer is of course to include the notice that a noncompete is required with the written offer letter, and, under the new statute terms, even with an oral offer of employment, a noncompete requirement should be mentioned if there is one.
Overall, with respect to Washington contracts, I am continuing to see quite broad noncompete provisions in Washington physician contracts in 2025. Thus, while there is a national trend to cut back on noncompetes, Washington not only allows noncompete restrictive covenants in Washington physician contracts, but some are arguably a bit aggressive. Occasionally, an employer will negotiate the terms, perhaps agreeing to a sunset provision after a certain number of years (sunset provisions mean that a requirement such as a noncompete will ‘go away’ if the physician works long enough for the employer) or perhaps will trim the restricted area. Absent that, often the restricted area will require clarification as it will be defined as simply X miles from the company’s office or clients in a certain area, e.g. Seattle or Spokane or the like; but offices and clients are added and subtracted in the course of business.
MONTANA
Montana has enacted a new law that takes effect on January 1, 2026. This bill effectively banned noncompetes for all physicians in Montana.
Before 2025, Montana had barred noncompetes for psychiatrists or addiction medicine physicians, psychologists, social workers, professional counselors, addiction counselors, family and marriage therapists, and behavioral health peer support specialists.
In April 2025, the limitation on restrictive covenants in Montana was expanded to include registered professional and advanced practice registered nurses, physician assistants, and naturopathic doctors.
Finally, in May 2025, this bar was extended to include all licensed physicians. There are exceptions here, similar to California’s limited exceptions when it comes to the sale and purchase of medical practices, and also exceptions pertaining to repayment obligations for various recruiting benefits such as loans, relocation expense reimbursements, signing bonuses and education or tuition expense reimbursements. This new law takes effect on January 1, 2026.
CONCLUSION
There you have our brief summary of the state of noncompete and nonsolicitation covenants in California, Washington, Montana, and Oregon physician contracts.
For legal advice on such matters, as always, you will want to consult with your legal counsel and/or physician contract lawyer in your jurisdiction.
I am always happy to help.
