The following is the Bureau policy for Health Centers on restrictive covenants:

• Local discretion will be allowed for Health Centers as to the use of restrictive covenants, and other Bureau
  communications will remain silent on the subject.
  
  • The expectation is that Health Centers that utilize restrictive covenants in their contracts should follow State law, and generally follow reasonable practices that are widely used by other community providers regarding both time and distance. The Bureaus current position on the use of restrictive covenants is neutral. The Bureaus policy will be neither to approve or disapprove these restrictive covenant clauses.

If you have any questions or comments regarding the restrictive covenant policy position described in this PIN, please contact Rhoda Abrams or Bill Melling at (301) 594-4060.

Described below is information on the Bureaus decision to review the placement experiences of National Health Service Corps (NHSC) scholars and loan repayors with restrictive covenants:

• The NHSC is reviewing the initial stages of the 1999 placement cycle, as to the implementation of restrictive covenants and its effect on NHSC scholars and loan repayors. Among the questions being asked are:
  
  • How many sites have restrictive covenants?
  • How many sites have removed or are removing restrictive covenants?
  • What has been the experience if sites have been asked to remove them?
  • Has the issue of restrictive covenants and Corps members come up as a problem at Health Centers and/or at other sites?
  • If not a current problem, may it be a potential problem?
  • Should scholar sites and loan repayor sites be looked at differently?
    
    
• Upon completion of this review, a final decision on NHSC scholars and loan repayors and restrictive covenants will be made in the next few months.