Lawmakers are pushing to free mental healthcare employees from non-compete clauses

Jenny Larson was excited to start her job as a therapist for Rising Hope, a counseling network that serves 17 communities across South Dakota, at its Mobridge office.

But because of a non-compete agreement Larson signed with her previous employer that barred her from working within 60 miles of Mobridge, she’s been traveling 100 miles to work for Rising Hope in Aberdeen.

“What I'm noticing is not just the impact on myself, it's impacting my family,” Larson said, explaining her three children tend to get nervous when she leaves for work. She leaves early Tuesday mornings and returns late on Wednesday nights, tending to stay overnight in Aberdeen between her two work days.

New legislation with the goal of barring non-compete clauses in hiring agreements within the mental health profession would affect counselors like Larson. Lawmakers met Monday to hear Larson’s story along with other mental healthcare professionals about why barring non-compete agreements would help when they want to transition to other jobs in the field.

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Doctors and nurses are already exempt from the non-compete clauses after legislation was passed in 2021.

“When a health care provider has a non-compete contract, or clause in his or her contract, and is forced to leave the community and in some instances forced to leave the state, the provider-patient relationship is fractured or broken,” Rep. Fred Deutsch, R-Florence, who brought the legislation, said. “Leaving the patient in limbo in some cases, needing to find another provider and that's particularly troublesome in rural districts like mine.”

Larson told lawmakers her efforts to negotiate her non-compete clause had failed, and because of the two-year term of the clause, she must continue traveling to Aberdeen for the next year.

Another counselor who testified said she and her husband had been required to move out of South Dakota for a year because of the clause she signed in her contract.

It’s widely accepted that mental health services are needed and that non-compete agreements can cause a barrier, said Jill Janecke, a counselor and owner of Rising Hope.

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“Especially when you have somebody who's living in that rural area, to find professionals in the rural area is key in our profession,” Janecke said. “Who wants to help the community, who wants to be that helping hand, that therapeutic person, and when we find them in these rural areas we want to keep them there.”

While the bill passed out of the House committee and has the support of the Gov. Kristi Noem's office, there was some soft opposition from lobbyists from Sanford Health and Avera Health, because of a second section that would seek to ban non-solicitation agreements.

Essentially, if a mental health practitioner was leaving their clinic, they could tell their clients where they were going to keep them on as patients, said Mitchell Rave, a lobbyist for Sanford.

“We're not trying to prevent a patient from following or tracking down their provider independently,” Rave said. “It’s just that specific going after your book of clients.”

Lobbyists said Sanford and Avera tend not to use non-compete clauses in their hiring contracts.

This article originally appeared on Sioux Falls Argus Leader: New bill targets non-compete clauses for mental health professionals