November 2022

Dear Honorable Legislators,                                             

It likely comes as no surprise to you that nationally and even more so in Iowa we are suffering from a crisis due to a shortage of mental health providers. This issue has been further exasperated with the rampant use of non-compete agreements industry wide which we believe are not only bad public policy but are not in the best interest of the public. 

In May 2022, the Iowa District Court in Ames ruled the noncompete agreement issued by Ames Therapy and Consulting vs. Rooted Therapy violates public policy and such disruptions in a patient’s established mental health care could cause serious harm. 

Licensed mental health providers operate under a strict code of ethics which have been adopted into the Iowa Administrative Code.  

In accordance with the ACA 2014 Code of ethics, Section A The Counseling Relationship Introduction states “Counselors facilitate client growth and development in ways that foster the interest and welfare of clients and promote formation of healthy relationships. Trust is the cornerstone of the counseling relationship. Counselors do not abandon or neglect clients in counseling. They assist in making appropriate arrangements for the continuation of treatment, when necessary, during interruptions such as vacations, illness and following termination.”

Additionally, the American Mental Health Counselors Association, Code of Ethics states “A primary ethical principle of all CMHC’s (Clinical Mental Health Counselors) is to ensure client autonomy and self-determination.” 

Non-compete clauses not only restrict the availability of licensed mental health counselors to the public at large, but also disrupt the close relationship developed between a provider and patient.  

Therefore, barring cases of imminent harm to self or others, any therapeutic approach that impedes an individual’s right to make informed choices is not in accordance with the AMHCA Code of Ethics. It was ruled that enforcement of the restrictive covenant, or non-compete, in Ames could lead to public harm.

We, the undersigned licensed mental health providers write to ask for your support of legislation to protect client-counselor relationships by prohibiting limitations on competition for licensed mental health providers as defined in Iowa Code 228.1. These provider-patient connections are of the utmost importance to individuals dealing with mental health issues. Having a strong client-counselor relationship is foundational and essential to positive treatment progress.

We ask you to respectfully pass the following legislative language to address the issue of mental health non-compete agreements in Iowa: 

Any agreement between a licensed mental health provider as defined in 228.1 and a prior employer of the licensee that limits the locations at which the licensee may practice, which prohibits the licensee from contacting for professional services a person previously treated by the licensee or imposes a time restriction on the practice of the licensee shall be prohibited. 

On behalf of Iowa’s licensed mental health providers, we urge the 90th General Assembly to enact legislation prohibiting non-compete agreements for licensed mental health providers. At a time when access to mental health is skyrocketing and workforce issues are significant the legislature must follow the guidance laid out in the Ames Therapy vs. Rooted Therapy ruling in order to stop this unethical practice which serves no practical purpose in our great state.