A physician’s guide to non-compete agreements

With the exception of North Dakota, California, and Oklahoma, every state legally allows for some degree of enforcement of non-compete agreements. In fact, 41% of physicians practicing a secondary specialty are bound by one.

What is a non-compete agreement?

A non-compete agreement, or “restrictive covenant,” is a clause or section in an employment contract that would prevent you from taking part in competition with your employer by working in your field within a designated geographic area for a specific period after the termination of your employment. Currently, there is no nationwide standard regarding non-compete agreements. Instead, the enforcement of these agreements varies on a state-by-state basis.

In states where restrictive covenants are allowed, the terms must:

  • Protect a valid business interest
  • Explicitly state geographical scope
  • Include a clearly defined duration

If the wording is ambiguous or does not explicitly describe the terms of the restriction, the agreement might be unenforceable or open to more than one interpretation.

Although non-compete agreements must follow specific standards, their reach can be extensive, minimal, or somewhere in between. Some examples of this include:

  • A hospital system that prevents a physician from practicing in any state where they operate a healthcare facility.
  • The owner of an independent practice prohibiting a physician from working within a 10-mile radius of their office for 30 days.

How do you get out of a non-compete agreement?

Regardless of the terms, in many cases, there is a buyout clause included that would allow you to pay a predetermined fee to practice freely. This is a particularly good option if your restrictive covenant contains gray areas, and you want to avoid the time and money spent disputing the enforceability of the agreement. In some cases, your new employer may even help you cover the buyout fee.

If you are currently bound by a non-compete and looking for a steady, long-term opportunity to get you through, CardioSolution can help! We partner with regional hospitals across the country and provide everything from physicians and support staff to service line management. Our physicians enjoy excellent work/life balance and competitive compensation, all while never having to relocate. Click here to request more information.

 

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