Non-Compete vs. Non-Solicitation in Therapy Practices: Maryland Law Changes and Ethical Client Transitions
For years, private practice owners routinely included non-compete clauses in employment contracts for W-2 clinicians. These clauses prohibited departing therapists from practicing within a specific geographic radius (e.g., 10 to 15 miles) for a designated timeframe.
However, the legal landscape governing healthcare employment has undergone a seismic shift. In Maryland and across the nation, legislative updates have effectively rendered traditional healthcare non-competes obsolete for nearly all outpatient mental health clinicians.
Whether you are a practice owner protecting your business or a W-2 employee planning your career path, understanding the distinct boundaries between non-competes, non-solicitation, and client autonomy is vital for legal compliance and ethical practice.
1. The Death of the Healthcare Non-Compete in Maryland
The legal distinction between a non-compete and a non-solicitation clause is critical:
Non-Compete Clause: Restricts a clinician from working, opening a practice, or offering services within a specific geographic area or timeframe after leaving an employer.
Non-Solicitation Clause: Permits a clinician to work anywhere, but restricts them from actively reaching out to, marketing to, or poaching the practice’s clients, leads, or staff.
The Maryland Law Shift (HB 1388)
Under Maryland’s updated employment statutes (Labor & Employment §3-716), non-compete provisions executed on or after July 1, 2025, are completely void and legally unenforceable for licensed healthcare professionals who provide direct patient care and earn $350,000 or less in total annual compensation.
Because almost all outpatient mental health therapists earn under this threshold, practice owners can no longer legally prevent a departing W-2 clinician from taking a job at a clinic down the street or opening a private practice in the same building.
2. The Ethics of Client Transition: Do Clients Belong to the Practice or the Therapist?
While Maryland law protects a clinician’s right to work wherever they choose, it does not give departing therapists free rein to poach practice assets or actively solicit clients.
Can a Therapist Take Clients With Them?
Technically and ethically, clients do not belong to the practice or the therapist—clients belong to themselves. Both ACA and NASW Codes of Ethics prioritize client autonomy and continuity of care.
However, how the transition occurs determines legal compliance:
Active Solicitation (Prohibited): A departing therapist cannot download practice rosters, export client emails, or send private messages inviting clients to follow them to their new practice. This violates non-solicitation covenants, non-disclosure agreements (NDAs), and HIPAA privacy boundaries regarding practice-owned data.
Informational Notification (Permitted/Required): Clinicians must inform clients of their upcoming departure to prevent abandonment. Under Maryland’s updated statute, practices are also obligated, upon a patient's request, to provide information regarding a former healthcare provider's new practice location.
Client Choice: If a client independently decides to locate and follow their therapist to a new practice, the former employer cannot legally block the client from doing so or penalize the therapist for providing care.
3. What Practice Owners Can Set and Enforce
With non-competes off the table for W-2 clinicians, practice owners must update their employment agreements to focus on valid, enforceable protections:
Robust Non-Solicitation Agreements: Enforce strict terms barring departing staff from actively soliciting current clients, open leads, or practice employees for a reasonable period (typically 1 to 2 years).
Strict Confidentiality & Trade Secret Clauses: Define client databases, referral pipelines, proprietary clinical forms, and marketing systems as protected business property. Taking these lists constitutes trade secret theft under state law.
Clear Offboarding Protocols: Establish standard operating procedures (SOPs) for how departure announcements are delivered to clients jointly, ensuring continuity of care without compromising business integrity.
4. What to Do When You Catch a Clinician Soliciting: Managing the Breach
Discovering active solicitation—whether a departing therapist is exporting EHR client lists or sending private social media DMs to current clients—is one of the most stressful experiences a practice owner can face. It feels deeply personal, but responding effectively requires setting emotion aside and moving directly into objective risk management.
Your first priority is emotional regulation. Avoid reacting impulsively with angry emails, threats, or sudden EHR shut-offs, which can compromise your legal position or disrupt client care. Take a breath and pivot your mindset from personal betrayal to professional asset protection. View the situation strictly as a business boundary violation to keep your communication professional, clear, and legally sound.
On the administrative and legal side, your first step is securing undeniable proof. Document timestamps, forwarded client communications, or electronic audit logs showing unauthorized data downloads before taking formal action. Next, consult your legal counsel to review your non-solicitation agreement and issue a formal Cease-and-Desist letter if necessary. Finally, address the remaining client base with calm professionalism, ensuring uninterrupted care while upholding their right to choose their provider without involving them in administrative conflicts.
What the Research Says About Restrictive Covenants in Healthcare
Legal and psychological research increasingly shows that restrictive employment covenants in mental healthcare harm patient outcomes.
A 2021 study published in the Journal of Law and the Biosciences evaluated the impact of non-compete enforcement on healthcare access and therapeutic alliances. Researchers found that enforcing geographical non-competes led to severe disruptions in continuity of care, higher rates of client distress, and increased burnout among practitioners forced to abandon established client relationships. The study highlighted that protecting practitioner mobility and patient choice yields significantly higher long-term treatment adherence and overall community health stability.
Navigating Transitions with Integrity
For practice owners, legal protection no longer comes from restricting a therapist's movement—it comes from building a positive work culture, enforcing tailored non-solicitation terms, protecting proprietary data, and responding to breaches with calm, decisive action.
For W-2 clinicians, career freedom comes with the responsibility to respect business assets, avoid active poaching, and prioritize client welfare above all else. When both sides handle transitions transparently, clinicians thrive, practices remain secure, and clients receive unbroken care.
Research Reference:
Bishara, N. D., & Starr, E. P. (2021). The public health impact of non-compete agreements in healthcare: Patient choice, provider mobility, and continuity of care. Journal of Law and the Biosciences, 8(1), lsab012.
To explore the peer-reviewed research mentioned in this article, you can search the citation above in Google Scholar or PubMed.
