A non-compete clause will limit the geographical area in which the practitioner can practice post-employment, for a certain duration of time.
Generally, the non-compete duration is 1-2 years and the radius is dependent upon the area where the practice is located. If it’s in New York City, the radius will be more confined because there is such a high concentration of medical/dental practices. However, in more rural areas, the radius can get broader and larger.
Keep in mind that the restriction should be reasonable, as the physician or dentist must be able to earn a living after their employment with that practice.
The issues arise when a practice has multiple practice locations. When reviewing employment contracts, I always recommend my clients to list the practice address within the clause, and have the restriction specific to that address. This way the client will know exactly what the restrictions are.
If you have an all-encumbering clause that just says, for example, “A 10-mile radius for all practices at which the employee will be working at currently and in the future,” well, this is too broad because it will be difficult to determine what the confinement is going to be at the time of termination. During the employment, there may be 5 additional locations that could prevent the employee from practicing within a 30-mile area. This may cause the practitioner the need to move in order to find new employment, which is unreasonable.
I’m working on a contract now in which the employer wants all current and future practice locations included in the clause, yet they are not willing to list any of the addresses. They are adding hospitals within the restriction as well, in which case this physician will be unable to practice in any hospitals within that geographical limitation.
The non-compete concept is to protect the employer from direct competition from the physician, should the physician leave. Should the practitioner breach the non-compete clause, the employer may seek injunctive relief and/or specific performance of the clause. In other words, the employer may be able to prevent the practitioner from practicing at their choice location should it be in violation of the non-compete restriction.
Practitioners should be fully aware of the language of the non-compete clause and understand exactly what their restriction and duration will be after their employment, should that employment end.
I have participated in a number of hospital speaking engagements, where I stress the importance of employment contracts to residents in various departments. Helping healthcare practitioners understand these clauses and ensuring they are aware of the terms of the contract, are services I provide.
Stephanie J. Rodin, Esq.
Rodin Legal, P.C.
Tel: (917) 345-8972
Fax: (917) 591-4428