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Dealing with noncompete agreements

by | Nov 22, 2018 | employment contracts for medical professionals, Firm News |

A person looking for a new job or trying to leave a medical practice may face legal obstacles. Many new doctors must deal with noncompetition agreements contained in their employee contracts for medical professionals.

One quarter of new doctors leave their jobs within the first three years of employment. This equals the amount of time that noncompete agreements are usually in force, according to the AMA.

Noncompete agreements usually prohibit a doctor from working in a certain geographic area. These agreements usually have terms preventing a physician from asking former patients to come to the physician’s new practice.

Former employers and partnerships usually enforce these agreements vigorously to cover recruiting costs and preserve patient lists. Fighting a noncompete agreement may be costly and could put a career on hold.

Some clauses have been challenged for being too overbroad in geographic scope or time duration. Doctors may also claim that their former employer had no legitimate business interest to enforce the agreement and that their departure did not harm that employer. For example, the employer did not cite patients that will be taken away, loss of business goodwill or the employee’s use of their patient list.

Another common defense is that the employer committed a significant breach of contract, which invalidates the entire agreement. This could include wrongful termination, significant underpayment of salary, bad work environment or substantial clinical errors. Finally, doctors can cite the potential for bad publicity, such as sexual harassment or harassment of a whistleblower.

Doctors should take these clauses seriously. It may be appropriate to renegotiate the terms of these agreements before leaving an employer and assure them that leaving will not constitute direct competition. Other times, however, it may be inadvisable to tell an employer about plans. An attorney can advise doctors before they leave a practice and help them negotiate.