Minnesota investigates nonprofit hospital’s use of illegal noncompete contracts
A multi-state nonprofit hospital system is being investigated by the Minnesota Attorney General’s Office after clinicians said they were pressured to sign contracts that contain illegal noncompete clauses.
Aspirus Health has 18 hospitals spread across Wisconsin, Michigan and Minnesota, where a 2023 law bans most noncompete provisions in employment contracts. However, two physicians working at St. Luke's Hospital in Duluth, Minnesota—operated by Aspirus—are claiming they’re being presented with new employment contracts that contain wording that would make it difficult for them to seek employment elsewhere.
Those physicians, who reported the alleged incidents to state regulators, also spoke to the Minnesota Reformer under the protection of anonymity. One described the new contracts—which also contain changes to expected workload and compensation—as “very physician-unfriendly and very administration-friendly.”
The other doctor told the outlet that pay cuts—in addition to the noncompete clauses—were part of the contract renewal for some at the facility. While noncompetes contained in old contracts, in some cases, were legal at the time they were signed, the law forbids most employers from issuing new ones after July 1, 2023.
However, the physicians told reporters their contracts were renewed annually. Lawyers representing them said the noncompete provisions were simply presumed to be unenforceable. It’s a surprise that the language reappears in these latest renewals, which contain new terms regarding employment conditions and compensation.
The doctors said they were told that failure to sign and agree to the contracts would be taken as a resignation.
While the Minnesota Attorney General’s Office confirmed it has seen enough evidence to investigate Aspirus over the incidents, the process is in early stages and no action has been taken at this time.
The nonprofit health system has 150 patient care locations and employs 1,300 advanced clinicians, including physicians.
HealthExec reached out to Aspirus for comment.
For more, read the full story from the Minnesota Reformer at the link below.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.