What to look out for in Physician Employment Restrictive Covenants and Non-Competes - Are they fair? What is fair?
Restrictive covenants come in many forms, and here are a few considerations you should consider to see if the restrictive covenants are fair.
- Geographic Restriction - Is there a geographic restriction to what the employee will be allowed to practice on? Is it 5 miles or is it 25 miles? is that reasonable, well the answer depends. If your specialty is unique then the larger the geographic spread the more likely it will be enforceable, but if you have a more common skillset, the small the geographic restrict. The hard facts are such, that what is a reasonable amount of distance a patient is willing to go to see a particular type of doctor/healthcare professional.
- Specialty Restriction - Next you will want to specify the specialty area of practice you will be working in. I am not referring to all the specialties of the employee, but the are of work that the employee is specifically getting hired to work in. That needs to be reasonable and tight, for the benefit of both parties.
- Client/Patient Poaching Restriction - Many contracts have provisions regarding no client poaching from the business once the professional leaves. Similarly, there is case law that is out there that states that a contract cannot interfere with a patient-doctor relationship. The circumstances to this always vary, and it is good to talk with a legal counsel to navigate through these restrictions.
- Employee Poaching Restriction - Many contracts have what is called an employee poaching restriction, meaning that the professional will not take or attempt to take other employees with them when the leave. So be careful of whom you hire at the next job that you go to.
- Affiliates of the Employer Organization - Many times the restrictive covenants will have restrictions that apply to not only the employer, but also their affiliates and other parties the employer has a relationship with. Is that fair? Sometimes yes, when there are legitimate business issues that are worth protecting and the employee is informed as to those entities before the contract is signed; but usually no, if the restriction is bot specific. This is a word of caution to both the employer and the employee.
Restrictive covenants come in many forms, it is advisable for you to get legal counsel on your side to help you navigate them.
Reasons to retain an attorney:
Most physicians do not understand the intricacies and ramifications of physician employment agreements. To review and negotiate a contract that does not limit the future of a young physician, it is best to get legal help earlier in the process to navigating the 5 most important things.
- Long lasting consequences of Non-compete
- Compensation is not clear or fair market value
- CME (Continuing Medical Education) benefits are not clearly listed – (association dues, license dues, course registration, and travel expenses)
- You may be restricted from serving on certain insurance panels
- You may have to relocate out of the area.
What does it cost to Have an Attorney Review a Physician Contract?
Our firm reviews physician contracts:
- Option 1 - for $875, and we will give you insights on what and how to negotiate, and conduct a background check on the employer.
- Option 2 - Some physicians prefer for us to negotiate their contracts, ask us about fees if that is your preference.
Ben Assad Mirza is a Florida attorney with a finance background, who has negotiated from both sides of the table, reach out to Ben Assad Mirza by calling or texting to (954)445-5503, or email me at [email protected]