Death, Taxes and (that darn) Non-Compete Clause

Posted on 09/26/2013 12:00am by Michael Lawrence in recruiting

They say the only certainties in life are Death & Taxes, unless of course you happen to be a medical provider, then you can add a restrictive covenant (or non-compete clause) to that short list.

In many ways, it is the equivalent of a pre-nuptial agreement, as starting  a new professional opportunity, is much like a marriage.  And as we all know, a successful one always has the traits of compromise, trust and good will….amongst other things.  We all go into these new endeavors, jobs or relationships, with the best intentions.  Both parties need to have some faith they’ve made the right decision.  But we also know no one has a crystal ball and taking a step back to consider the worst case scenario is natural for both parties. 

Sometimes, this part of a contract can be negotiated, however in most cases (especially in private practice) there is typically little lee-way.  In all cases, this will be part of your agreement.  Understanding the mileage radius or mechanics if the practice adds offices is just one piece.  Understanding the bigger picture and the spirit of the clause is a whole different ‘ball of wax’.

Practice Point of View

Many private practices are built upon the blood, sweat and tears of a doctor or group of doctors.  Given the hard work and time it takes to build a successful, growing practice, we can all appreciate why the employer doesn’t want to lose patients and potentially his or her livelihood.  Practices also don’t want to be used as a vehicle for an out of town provider to ‘get his feet wet’ in their market before opening up their own practice. 

In most cases, you’re building relationships with a patient base provided through the investing in marketing of you and the practice by the practice.  After a physician leaves a practice, the period of time of the non-compete decreases the risk of that investment.  Additionally, the practice is investing heavily in you, if they can’t realize a return on that investment they certainly don’t want to be in worse situation by losing patients.

Candidates View Point of View

  • What if the unforeseen happens?  Will I be able to work again in the area?
  • What if the practice wants to get rid of me before the contract is fulfilled 
  • What if the practice adds locations?
  • Why is your non-compete 10 miles and my friend just signed a contract with a 5 mile non-compete?

Although their might not be a significant amount of lee-way with regards to the terms, understanding them completely, as well as the ‘spirit’ of the clause, is essential.  Additionally, non-compete clauses cannot be legally enforced if deemed ‘unreasonable’, in a worst case scenario.

Ultimately, both parties need to feel comfortable and understand all the facts.  Your recruiter will help you navigate through those facts and decrease the amount of “faith” placed in the agreement.

Tags: physician, opportunities