A federal judge Tuesday rejected a large cancer care company's motion to block a controversial new Florida state law limiting the use of physician noncompete agreements.
U.S. District Judge Mark Walker nixed the request by 21st Century Oncology for a preliminary injunction barring enforcement of the law, which he compared to the campy 1950s horror movie classic "Creature from the Black Lagoon," filmed 15 miles from the Tallahassee courthouse.
The law, signed by Republican Gov. Ron DeSantis in June, voids any noncompete agreements between specialist physicians and any entity that employs or contracts with all physicians of that specialty in a particular county. These restrictive covenants remain unenforceable for three years after the date on which a second entity starts offering the same specialty services in the county.
The ruling is a setback for many provider organizations, including hospitals, that use noncompete agreements to lock in their physicians and protect their investments in their network. Rural hospitals in the state have said the law will hurt their ability to offer specialty services.
21st Century Oncology is the largest provider of radiation oncology services in Florida, and is the only provider in Lee County, in the southwest part of the state. Until recently, the company employed all nine radiation oncologists in Lee County. But in the past year, five of those doctors severed their relationship and began practicing on their own, according to the judge's opinion.
The company claimed the law violated its contracting, equal protection, and due process constitutional rights, and that it was written specifically to benefit five politically connected doctors who wanted out of their contracts—several of whom previously were founders or leaders in the company.
But Walker wrote that the Republican-dominated Florida Legislature could plausibly have passed the bill out of concern that consolidation across the healthcare industry is negatively affecting access, costs and consumer choice.
Lawmakers, he wrote, "could rationally have concluded one way to address these issues was by increasing competition, and that an acceptable way to make progress toward that result was to render void certain noncompete agreements which contributed to creating and maintaining county-level zones of exclusive market share."
He acknowledged that the law impairs the company's employment contracts within the meaning of the Constitution's contracts clause, "but that the degree of impairment does not outweigh the significant, legitimate public purpose" of the law.
Dr. Michael Katin, who helped co-found 21st Century and is one of the four physicians seeking to end the noncompete agreement, applauded the Tuesday ruling.
"Medical specialists are often in short supply in Florida counties," he said in a written statement. "The court's decision allows Florida communities to keep these doctors and allows patients to continue receiving treatment from the specialty physicians of their choice."
Benjamin Yormak, who represented two physicians in a separate noncompete case against 21st Century Oncology that settled in 2017, said noncompete agreements are widely used with physicians in Florida. The new state law, he added, makes it much easier for those in certain circumstances to get free of the covenant because they no longer have to prove it violates antitrust law, which is a high legal hurdle.
"The Florida Legislature said that if one medical group controls a large market share, it's not right that patients can't have a meaningful choice of their physician," he said. "It's a great win for physicians and patients."
Attorney for 21st Century Oncology did not return calls for comment by deadline.