PHYSICIAN AGREEMENTS PART 2: NON-COMPETE CLAUSE

Physician agreements often prohibit a doctor from establishing a practice or accepting other employment within a certain area for a certain period of time following termination of employment.  Additionally, there may also be restrictions against recruiting the employer’s staff members.  These types of restrictions are sometimes referred to as “covenants not to compete” or “non-compete clauses”.  These types of covenants will be enforced only to the extent that enforcement is necessary to afford reasonable protection to an employer’s legitimate interests (like patient lists, trade secrets and confidential information).  A covenant must be reasonable in time and in geographic area.  (In some states, geographic covenants are illegal.)

For example, an agreement providing that after termination, a doctor may not practice within 50 miles of the employer for 6 months may be deemed reasonable by a court.  However, an agreement that states a doctor may not practice within 1000 miles of the employer for 10 years may be ruled to be unreasonable and therefore unenforceable.

For more general information on non-compete clauses, go here.

Although not related to Physician Agreements, non-compete clauses recently made the news when Conan O’Brien left NBC.

 

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