By Lee Radford
There are shortages of licensed physicians throughout the Intermountain West.[i]
This problem has been addressed by some western legislatures through measures seeking to increase the supply of physicians.[ii] But the shortages remain. Idaho ranks 50th in total physician supply and 49th in active primary care physicians.[iii] 17 of Utah’s 26 counties are Primary Care Health Professional Shortage Areas (HPSA).[iv] And nearly two-thirds of Nevada’s population resides in a HPSA.[v]
In light of these shortages, most legislatures in the Intermountain West have imposed restrictions on the use of non-compete covenants against physicians and other healthcare workers. Licensed healthcare providers and their patients are protected against non-compete agreements in Colorado, Utah, Wyoming and Montana. Meanwhile Idaho and Nevada continue to allow employers to require agreements restricting physician practices despite these shortages.
Wyoming
Effective July 1, 2025, the Wyoming Legislature enacted Wyo. Stat. § 1-23-108, which prohibits any covenant not to compete “that restricts the right of any person to receive compensation for performance of skilled or unskilled labor,” with some exceptions. The same statute also prohibits a non-compete provision in an agreement between physicians that restricts the right of the physician to practice after termination of the physician’s employment. Together, these provisions make it difficult to enforce non-compete agreements against either physicians or non-physician healthcare providers.
Colorado
Effective Aug. 6, 2025, Colorado imposed significant additional limitations on the enforceability of non-compete covenants against physicians, advanced practice professionals and dentists. 2025 Senate Bill 25-083; Colo. Rev. Stat. 8-2-113. Previously, non-compete provisions that restricted a physician’s right to practice medicine following employment were void. But the new Colorado law added to that prohibition by also barring damages provisions for future competition by a physician. The new Colorado law also removed healthcare practitioners from the statute that allows non-solicitation clauses for highly compensated earners. The new Colorado law also prohibits agreements that would forbid a healthcare practitioner from disclosing to patients that the practitioner continues to practice medicine, the new address of the practitioner and the patient’s right to choose a practitioner.
Utah
In 2026, the Utah Legislature acted to curtail non-compete covenants against healthcare workers. House Bill 270, which amends Utah Code sections 34-51-102, 201, and 202, became effective May 6, 2026. In that new law, a noncompete agreement signed by a “healthcare worker” after May 6, 2026, is void. The term “healthcare worker” is broadly defined and appears to include all healthcare providers acting under a license to practice. The new Utah law also narrows the enforceability of a non-solicitation agreement with a healthcare worker, by barring an employer from prohibiting a healthcare worker from informing their patients about their current or future place of employment. The new Utah law does not apply to a non-compete agreement in a severance agreement or to a non-compete agreement in connection with the sale of a business and also does not impact non-disclosure agreements.
Montana
Montana starts with the basic rule that any contract that attempts to restrain anyone from exercising their lawful profession or trade or business of any kind is void, subject to certain exceptions. Mont. Code Ann. 28-2-703. One exception to this general rule is the use of non-compete covenants in connection with the sale of the goodwill of a business. Mont. Code Ann. 28-2-704. Another exception is an agreement among partners at the dissolution of a partnership. Mont. Code Ann. 28-2-705.
In addition to this general prohibition against employment non-compete covenants, effective Jan. 1, 2026, Montana has also expanded Montana Code 28-2-724 to bar contracts from restricting the right of a healthcare provider to practice within the provider’s license in any geographic area. After termination of employment, the statute also allows healthcare licensees to treat and care for any patient of the employer or solicit patients of the employer.
Nevada
Nevada has not adopted any broad prohibition against non-compete covenants of healthcare providers. However, Nevada does not allow non-compete covenants to be used for employees who are paid an hourly wage. Nevada also disallows contracts that would restrict a former employee from serving former clients who voluntarily seek services from the employee. Nevada law also prohibits a non-compete from imposing any restraint greater than required for the employer’s protection. Nevada law also provides that a non-compete cannot impose an undue hardship on the former employee.
Idaho
Idaho has not yet adopted any legislative prohibition of healthcare provider non-compete covenants. Instead, Idaho continues to follow a case-by-case approach that recognizes the special interests of patient choice in healthcare.
In May 2025, we provided a Healthcare Bulletin titled “Non-Compete Covenants in Healthcare Under Idaho Law,” which explained that Idaho Code sections 44-2701 to 2704 and the case of Intermountain Eye & Laser Centers, PLLC v. Miller (2005https://caselaw.findlaw.com/court/id-supreme-court/1021934.html) require a case-by-case approach to the enforcement of non-compete covenants against healthcare providers in Idaho. That analysis examines the employer’s “legitimate business interests” and focuses on a determination of whether the non-compete covenant is broader than “reasonably necessary” to accomplish those interests. The covenant can be modified or set aside if either the employer’s interests are not legitimate or if the covenant is broader than needed to meet those interests.
Under Idaho law, a covenant not-to-compete between a healthcare provider and an employer is not enforced solely according to the terms of the parties’ agreement. Rather, a court must enforce the non-compete only to the extent that the non-compete is tailored to be “reasonably necessary to protect the employer’s legitimate business interests.” Idaho Code 44-2701. An employer’s legitimate business interests include goodwill, customer lists, referral sources and vendor contacts but do not include the employer’s desire to restrict competition. In determining the employer’s legitimate business interests, a court must also take into account that patients have a valid interest in their choice of a physician and in continuity of care.
Summary
Colorado, Wyoming, Montana and Utah have curtailed the use of non-compete provisions in agreements with licensed healthcare providers. Idaho and Nevada continue to allow such agreements, while continuing to impose the general requirement that non-compete provisions cannot be broader than needed to protect legitimate employer interests.
Parsons Behle & Latimer's healthcare and employment & labor attorneys regularly advise healthcare organizations and providers on non-compete, non-solicitation and restrictive covenant issues throughout the Intermountain West. If you have questions about how these evolving laws may affect your organization or practice, contact our attorneys for experienced guidance and practical solutions.
Mr. Radford helps healthcare businesses comply with complex legal frameworks. This work includes counseling and representing health care providers in relation to Stark, the anti-kickback statute, physician contracting, health care leasing, physician organizations, licensing and credentialing, real estate, confidentiality, employment, healthcare transactions and health insurance contracting. He also helps healthcare businesses in litigation and dispute resolution. To discuss these or other matters with Mr. Radford, send an email to lradford@parsonsbehle.com or call (208) 522.6700.
[i] DeLancey, Cindy and Wolfe, Samantha, Healthcare in the West is on Life Support: Legislative and Immigration Barriers Leave Physician Gaps Unfilled (March 6, 2025) (https://www.hollandhart.com/healthcare-in-the-west-is-on-life-support-legislative-and-immigration-barriers-leave-physician-gaps-unfilled).
[ii] Richert, Kevin, ‘I Would Like to Be Less 50th:’ Task Force Continues Work on Physician Shortage (September 8, 2025)(https://www.idahoednews.org/top-news/i-would-like-to-be-less-50th-task-force-continues-work-on-physician-shortage/ ).
[iii] Cicero Institute, Idaho Physician Shortage Facts (February 8, 2024) (https://ciceroinstitute.org/research/idaho-physician-shortage-facts/)
[iv] Cicero Institute, Pharmacists Can Fill the Doctor Shortage Gap in Utah (March 5, 2026) (https://ciceroinstitute.org/research/pharmacists-can-fill-the-doctor-shortage-gap-in-utah/).
[v] Packham, John, et al, Health Workforce in Nevada (July 2025) (https://www.nvpca.org/_files/ugd/5067d7_827dc42e07944ed682568932610e6527.pdf?index=true).
