Minnesota hospital still pushing noncompetes, despite AG investigation

Despite being the focus of an ongoing investigation by the Minnesota Attorney General’s Office, St. Luke's Hospital in Duluth is continuing to pressure physicians to sign new contracts that include noncompete clauses, which are banned in the state.

According to a new report from the Minnesota Reformer, two physicians who were granted anonymity for fear of retaliation forwarded emails to the outlet, wherein leadership at St. Luke’s acknowledged the investigation into the “noncompete commitment" in its employee agreements. 

St. Luke’s, owned by nonprofit Aspirus Health, also said it was walking back changes to compensation, which would have most doctors working more hours for less pay. However, the amended contracts still contain restrictions on the ability of physicians to seek work elsewhere—something the state has forbidden since 2023.

In the email, the doctors were told to sign their new contract and agree to the terms by December, or presumably they will face dismissal. The hospital said previously that not signing would be taken as a formal resignation. 

While the Minnesota Attorney General’s Office confirmed it has seen enough evidence to investigate Aspirus over the incidents, no action has been taken at this time. 

However, as the Reformer noted, St. Luke’s parent company is already facing a lawsuit over its attempts to enforce noncompete clauses, despite them being outlawed. In October, a family physician sued when Aspirus allegedly tried to use the noncompete to bar the doctor from opening her own primary care practice.

According to the lawsuit, the organization threatened to sue her. 

The company has denied it did anything illegal. The outcome of litigation in that case is still pending.

For more, read the full story from the Minnesota Reformer at the link below.