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

For licensed professional counselors, clinical social workers, marriage and family therapists, psychologists, behavior analysts and RNs, Pennsylvania non-competes are a common-law question.

Pennsylvania has no general non-compete statute, and its healthcare-specific non-compete law does not reach them.

That means a covenant with any of those staff is enforceable if it clears the three-part test Pennsylvania courts apply to restrictive covenants: it must be incident to an employment relationship, reasonably necessary for the protection of the employer, and reasonably limited in duration and geographic extent.

The test comes from the Pennsylvania Supreme Court's 2002 decision in Hess v. Gebhard & Co., and the same opinion is blunt about the climate — restrictive covenants "are not favored in Pennsylvania."

Not favored is not the same as void, but Pennsylvania courts enforce these covenants only within the reasonableness limits of that test.

Prescribers are the exception, and the statute changes the answer for them: Act 74 voids a new covenant with the five practitioner types it covers unless it lasts one year or less and the practitioner was not dismissed — which reaches the psychiatrists and certified registered nurse practitioners a practice hires to prescribe.

How Pennsylvania compares with the rest of the country is covered in our guide to non-competes nationally.

Pennsylvania has no general non-compete statute.

The rule your covenants will actually be judged against is case law: Hess v. Gebhard & Co., a 2002 Pennsylvania Supreme Court decision that states the test for restrictive covenants — enforceable if they are incident to an employment relationship between the parties, if the restrictions are reasonably necessary for the protection of the employer, and if the restrictions are reasonably limited in duration and geographic extent.

The same decision sets the tone.

The Pennsylvania Supreme Court said restrictive covenants "are not favored in Pennsylvania" and have been historically viewed as a trade restraint that prevents a former employee from earning a living.

Practically, that means a Pennsylvania court weighs whether the restrictions are reasonably necessary for the protection of the employer and whether they are reasonably limited in duration and geographic extent.

Because this is judge-made law rather than a statute, its boundaries move case by case.

Have Pennsylvania employment counsel review any covenant before it goes into an offer packet, rather than relying on a form agreement written for another state's law.

Pennsylvania's healthcare-specific non-compete statute is the Fair Contracting for Health Care Practitioners Act — Act 74 of 2024, signed July 17, 2024 and effective January 1, 2025.

Its coverage list is closed at five practitioner types: medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners and physician assistants.

If you hire psychiatrists or nurse practitioners to prescribe, those hires are covered.

Equally important is who is not on the list.

Act 74 does not cover licensed professional counselors, clinical social workers, marriage and family therapists, psychologists, behavior analysts or RNs — none of them is on its closed list, so their non-competes stay under the Hess common-law test.

For a covered practitioner the statute is blunt: a noncompete covenant entered into after January 1, 2025 is void and unenforceable, except that an employer may enforce one lasting no more than one year if the practitioner was not dismissed by the employer.

The dismissal condition matters — the one-year exception requires that the practitioner was not dismissed by the employer.

For the licensed counselors, clinical social workers, MFTs, psychologists, behavior analysts and RNs Act 74 does not cover, the Hess test is the whole analysis, and it has three requirements: the covenant is incident to an employment relationship between the parties; the restrictions are reasonably necessary for the protection of the employer; and the restrictions are reasonably limited in duration and geographic extent.

Duration and geographic extent are the two levers you actually draft.

A covenant should state how long it lasts and the area it covers, and it should reach no further than what the practice needs to protect — for a behavioral health practice, for example, the client relationships, referral sources and confidential business information it depends on.

A clause that sweeps broadly asks the court to protect more than the business needs.

Pennsylvania also gives an overbroad covenant a partial lifeline: when a covenant imposes restrictions broader than necessary to protect the employer, a court of equity may grant enforcement limited to the portions of the restrictions that are reasonably necessary, rather than refusing enforcement outright.

Treat that as a safety net, not a drafting strategy — the covenant a court trims down will be narrower than the one you wrote, and you will have paid for litigation to get there.

A non-solicit reaches whom a former employee may contact — clients, patients or staff — rather than where they may work.

For the counselors, clinical social workers, MFTs, psychologists, behavior analysts and RNs Act 74 does not cover, a non-solicitation clause is a restrictive covenant like any other, and the Hess test is Pennsylvania's standard for restrictive covenants: size it to be incident to the employment, reasonably necessary for the protection of the employer, and reasonably limited in duration and geographic extent.

Have your employment counsel confirm how Pennsylvania courts treat patient non-solicits specifically.

Act 74 adds a wrinkle for covered prescribers.

It defines a "noncompete covenant" as an agreement that has the effect of impeding the practitioner's ability to keep treating patients or accept new patients after employment, whether practicing independently or for a competing employer.

Whether a patient non-solicitation clause falls inside that definition is untested — treat it as an open question for your employment counsel, not a settled green light in either direction.

Sizing these clauses to survive scrutiny, and the professional ethics standards that shape how a client handoff works when a clinician leaves, are their own topics — our guide to non-solicitation clauses covers both.

A Pennsylvania practice keeps real protection over its workforce; the work is aiming it where it will hold.

Start with the drafting:

• Right-size time and area. The Hess test requires duration and geographic extent to be reasonably limited. Write both specifically, and keep the covenant no broader than what it protects — for example, the client relationships, referral network and confidential information the practice depends on.
• Add an assignability provision now, not at the deal table. Under Hess, an employee's non-compete is not assignable to the purchasing business entity in a sale of assets in the absence of a specific assignability provision. If a group practice or ABA company might ever be acquired, that provision is what determines whether your covenants survive the sale.
• Use repayment where a ban will not hold. For covered prescribers, Act 74 still lets an employer recover reasonable expenses related to relocation, training and establishing a patient base, when they accrued within three years before separation (unless the practitioner was dismissed) and are amortized over up to five years. For everyone else, a repayment clause is its own instrument with its own rules — our guide to training repayment agreements covers them.
• Reserve restrictive terms for ownership. Act 74 does not void a non-compete tied to a covered practitioner's ownership interest when the business is sold, control changes, or the practitioner receives an ownership interest — so equity and buy-in arrangements can still carry restrictive terms the statute leaves alone.
• Build the prescriber departure playbook. When a covered practitioner leaves, the employer must, within 90 days, notify patients seen in the past year of the departure, how to transfer records, and that they may stay with the practice. That notice duty applies where the practitioner had an ongoing outpatient relationship of two or more years with the patient.

Two habits cover the rest.

Have Pennsylvania employment counsel review any covenant before a hire signs, since for clinicians outside Act 74's five-item list the standard is case law that moves decision by decision.

And when a clinician does leave, run the client transition deliberately — notice, records and a clean handoff — rather than leaning on the covenant alone.