If bringing patients with them to a new practice, doctors should make sure the employment agreement excludes these patients from any nonsolicitation provision at the time the doctor leaves, notes Mr. Holland. Include language that states physicians can retain patients they originally brought to the practice when they depart without violating the agreement.
Make sure to review any proposed noncompete clauses in relation to proposed termination provisions, Mr. Kopson said. Doctors should negotiate language that ensures noncompete obligations will be null and void if physicians are terminated without cause (if such terminations are permitted by the contract), or if the employer breaches the contract.
Seeking the advice of an experienced contract attorney before signing a noncompete clause can save doctors significant time, money, and heartache in the long run, Mr. Kopson notes.
“The biggest risk is signing a contract that has such a clause with an expectation that it will not be enforced,” he said. “If [clauses are] properly drafted, they’re going to be binding. If you get the help up front, it’s going to be a lot less expensive than having your life turned upside down because you’re stuck with a noncompete that has bad terms in it.”
Unreasonable terms
Once signed, getting out of non-compete clauses can be tricky, Mr. Selesnick said. However, doctors can usually escape them if they can prove the terms are unreasonable.
“You can get out of them, especially if they’re very restrictive and say you can’t practice within an area that may prevent you from earning your livelihood,” Mr. Selesnick said. “Courts [generally] think that employees should be able to leave and be able to get a job elsewhere, even if it’s across the street.”
Courts are typically more favorable to physician-employees than independent contractors when it comes to noncompete clauses, Mr. Selesnick said. Independent contractors are generally viewed as having more power over their work than physician-employees. They may have a tougher time convincing a court that such provisions will harm their employment options.
When seeking to enforce a disputed noncompete agreement, employers frequently will request a court-ordered temporary restraining order or injunction to enforce the clause, Mr. Holland said. Judges consider general principles of fairness and equity, and balance the relative harm to the employer and the employee, when deciding whether to issue the injunction. The employee-physician can also try to beat the employer to the courthouse steps by filing a “declaratory judgment” lawsuit that seeks guidance from the court on the contract’s enforceability.
“Typically, employers attempt to do that which is in their best economic interest,” Mr. Holland said. “If a proposal can be negotiated where the employer’s economic well-being is not threatened, then the employer should have a strong interest in a compromise.”
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