House approves amendment to ban certain non-competes at University of Iowa health system after failed push to expand statewide

The Iowa House passed House File 2254 with Senate amendment H8319, prohibiting certain non-compete clauses in employment contracts entered into by University of Iowa Hospitals and Clinics (UIHC), after floor debate over whether to expand the ban to all hospitals.

A floor amendment (H8350) was offered that would have removed non-compete clauses across the board for all hospitals in Iowa. The amendment's sponsor argued the change would create an "even playing field" for all hospitals and eliminate competitive disadvantages for UIHC in recruiting and retaining clinicians. Representative Webster countered that while non-competes are generally problematic, expanding the ban to all hospitals might be nongermane and could harm the University of Iowa's ability to retain recruited specialists. A motion to suspend the rules to allow the broader expansion failed on a record roll-call vote, 34 yes, 56 no, 10 not voting.

The House then concurred in Senate Amendment H8319 (a strike-after amendment) that expanded the non-compete prohibition at UIHC to cover additional practitioner categories including nurse practitioners, LPNs, pharmacists, PAs and registered nurses. Representative Webster urged concurrence and the body voted to pass the measure; the clerk reported a final tally of 70 ayes, 20 nays and 10 not voting.

Floor managers said they would watch privately contracted providers and insurers over the interim and make changes if promised adjustments were not kept. The bill now moves forward after the House agreed to the title.