Are Non-Competes Enforceable for Therapists and Behavioral Health Staff in Hawaii?

Hawaii's starting point is a statute aimed at restraints, but it is not an absolute ban.

HRS § 480-4(a), the state's antitrust law, makes every contract in restraint of trade illegal, subject to the restrictive covenants the section separately allows.

For everyone on a behavioral health roster — therapists, counselors, social workers, marriage and family therapists, psychologists, behavior analysts and the staff around them — a non-compete is judged by whether it is reasonable under the Hawaii Supreme Court's Technicolor decision.

One Hawaii rule takes the question off the table for some employers, but not for you.

Since 2015, HRS § 480-4(d) has prohibited non-compete and non-solicit clauses for employees of technology businesses — a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software or information technology development.

A therapy practice, ABA clinic or treatment program does not fit that definition, so the ban does not reach behavioral health employers.

Where Hawaii sits in the wider picture — the states that handle these clauses differently — is covered in our guide to non-competes nationally.

Two things raise the stakes for a Hawaii practice.

Reasonableness is decided by a court, not by the wording you chose, and a clinician who prevails against your covenant is awarded attorneys' fees by statute.

Both, in this order.

The statute is HRS § 480-4, Hawaii's antitrust law: every contract in restraint of trade or commerce in the State is illegal, subject to the lawful restrictive covenants the section separately lists.

One listed covenant is the one a practice can build on.

Section 480-4(c)(4) expressly permits a covenant by an employee not to use the employer's trade secrets in competition with the employer, for a time reasonably necessary to protect the employer and without undue hardship on the employee.

The listed covenants are not a ceiling.

The official annotation to § 480-4, citing the Hawaii Supreme Court, states that the restraints listed in subsection (c) are not the only allowable types: other restraints that are not per se violations of chapter 480 are valid if deemed reasonable.

The case supplying the reasonableness standard is Technicolor, Inc. v. Traeger, 57 Haw. 113 (1976) — a Hawaii Supreme Court decision, so the test is judge-made rather than written into the statute.

As published on the Hawaii Legislature's website, the history note to § 480-4 lists 2015 as the section's most recent amendment.

Our research found no Hawaii non-compete statute written for clinicians — no statute specific to non-competes for counselors, social workers, marriage and family therapists, psychologists, behavior analysts, physicians or APRNs.

That is an absence finding, not a guarantee, so have counsel confirm the current statute before you rely on it.

That cuts both ways.

No statute we found names behavioral health licenses, and none singles prescribers out either: a psychiatrist's or PMHNP's covenant is judged under the same § 480-4 framework as a counselor's.

Whether a state names behavioral health licenses in its non-compete law is national context, covered in our guide to non-competes nationally.

The 2015 technology-business ban is not a behavioral health rule either: Hawaii has not banned non-competes generally or for health care workers, and § 480-4(d) covers employees of technology businesses only.

If your revenue is clinical care, your covenants live or die on reasonableness, not on any healthcare-specific rule.

Technicolor gives Hawaii courts three ways a covenant fails.

It is not reasonable if it is greater than required for the protection of the person for whose benefit it is imposed; if it imposes undue hardship on the person restricted; or if its benefit to the employer is outweighed by injury to the public.

Reasonableness, the employee's hardship and the employer's justification are legal questions for the court — determinations a judge makes, not outcomes you can settle by drafting.

Applied to a practice, the test rewards fit.

The time and the area have to match the interest you are actually protecting, and the express trade-secrets covenant the statute lists shows the shape: trade-secret protection runs only for a time reasonably necessary to protect the employer.

For a treatment practice, weigh the third limb with counsel before you enforce — in behavioral health, expect arguments about interrupted care for clients in active treatment.

Draft to your documented interest, and never to another state's number.

The 2015 ban covers employee non-solicits as well as non-competes — but only for technology-business employees, so it does not decide the question for your practice.

Outside that ban, a non-solicit is a restraint of trade like any other, valid if a court finds it reasonable under the framework above.

Client non-solicits run through the same door: restraints beyond the covenants listed in § 480-4(c) are valid if deemed reasonable.

Research for this page did not surface a Hawaii decision applying that framework to a therapy practice's client non-solicit, so treat reasonableness as the test and have counsel check current case law before you rely on the clause.

Keep the two tools distinct.

A non-compete restrains practice; a non-solicit restrains solicitation — it leaves a former employee free to work and your clients free to choose, because the clause binds the clinician, not the client.

How these clauses treat clients versus staff, and what the ethics codes expect when a clinician departs, is covered in our guide to non-solicitation clauses.

Price the enforcement risk first.

Under HRS § 607-14.9, an employee or former employee who prevails in a civil action over the interpretation or enforcement of a non-compete shall be awarded reasonable attorneys' fees and costs.

An overbroad covenant is not just unenforceable — losing the fight to enforce it means paying the clinician's fees and costs on top of your own.

Protect information directly, because a trade-secrets covenant is one the statute expressly allows.

A trade-secrets covenant under § 480-4(c)(4) — for a time reasonably necessary, without undue hardship — plus a confidentiality clause backed by policies that genuinely keep client lists, rates and referral relationships out of general circulation gives you the restraint the legislature wrote on purpose.

Draft the rest narrow: name the interest, keep the term tied to how long your client relationships actually run, and consider whether a client non-solicit does the real work a blanket non-compete was doing.

If the worry is paying to train a clinician who then leaves, a training repayment agreement is a different tool with its own enforceability rules — see our guide to training repayment agreements before adding one to a Hawaii offer.

Whatever combination you land on, have Hawaii employment counsel read the final wording.