We've noticed that you're using an ad blocker

Our content is brought to you free of charge because of the support of our advertisers. To continue enjoying our content, please turn off your ad blocker.

It's off now Dismiss How do I disable my ad blocker?
❌

How to disable your ad blocker for our site:

Adblock / Adblock Plus
  • Click on the AdBlock / AdBlock Plus icon on the top right of your browser.
  • Click “Don’t run on pages on this domain.” OR “Enabled on this site.”
  • Close this help box and click "It's off now".
Firefox Tracking Prevention
  • If you are Private Browsing in Firefox, "Tracking Protection" may casue the adblock notice to show. It can be temporarily disabled by clicking the "shield" icon in the address bar.
  • Close this help box and click "It's off now".
Ghostery
  • Click the Ghostery icon on your browser.
  • In Ghostery versions < 6.0 click “Whitelist site.” in version 6.0 click “Trust site.”
  • Close this help box and click "It's off now".
uBlock / uBlock Origin
  • Click the uBlock / uBlock Origin icon on your browser.
  • Click the “power” button in the menu that appears to whitelist the current website
  • Close this help box and click "It's off now".
  • Topics
  • Health IT
  • Careers
  • Law/Malpractice
  • Compensation
  • Staffing
  • Pearls
  • Contribute to Site

Modern Medicine Network
  • Login
  • Register
Skip to main content
Modern Medicine Network
  • Login
  • Register
Menu
User
Home
  • Topics
  • Health IT
  • Careers
  • Law/Malpractice
  • Compensation
  • Staffing
  • Pearls
  • Contribute to Site

SUBSCRIBE: eNewsletter

What Physicians Should Know about Non-Compete Clauses

  • Martin Merritt
Mar 6, 2016
  • Career, Contracts, Law & Malpractice
  • Physicians Practice

In the Mediterranean, around the year 1200, the Fourth Crusade sacked Constantinople, sending skilled glass makers on a quest for a safer place to work. Many landed in Venice, where work could easily be found.  Employers, probably for the purpose of protecting the city from fire, decided it would be safest to congregate these skilled laborers on the Isle of Murano. 

Sequestration had an unintended consequence. By the 1500s, Venetian artisans had learned from each other and perfected the process to gain control over the color and transparency of their glass, and had also mastered many new decorative techniques. Their skill became was so valuable, employers bent on monopolizing the trade, issued the order that the glass makers were not allowed to leave the island republic or they'd be sentenced to death. Workers may have believed they created the skill and therefore, should have the right to mobility; while employers believed they owned the right to the knowledge and all the income flowing from this know how.

This history perfectly illustrates the motivations behind modern covenants not to compete, which many physicians are asked to sign as a condition of employment.

In my experience employees, likely as not, aren’t running toward a fantastic new job, as much as running away from an intolerable old one. Physicians, like the Venetian glass makers, possess a skill the new employer would like to monopolize. However, physicians, particularly those who transfer from some other place, are less likely to have business contacts and patients of their own. Thus, they have  little leverage or power in negotiating the conditions of employment. I find many physicians are willing to sign anything placed in front of them.   In order to protect themselves from competition from departing employees, most employment contracts contain some form of non-compete clause (assuming non-competes are legal in your state.)

As a general rule, in the United States, non-competes arethought to be a restraint of trade and disfavored.  Employees have a right to work and the economy benefits from free mobility. However, another principle of contract law holds that if an adult is willing to give up a right by contract, the courts should not stand in the way of freedom to contract, unless the contract violates a statute or public policy.

Whether or not the law of a particular state will uphold a non-compete, depends on the law of each  state. In Texas, for example, a non-compete clause is enforceable if it meets the statutory requirements under the Business & Commerce Code  Section 15.50.  Among other things, the non-compete must be a part of an enforceable contract, and there must be some consideration given for the physician’s signing a contract which waives the physician’s right to compete in a free market. Often, this “consideration” takes the form of imparting “confidential information,” such as the list of patients given by the employer to the doctor.  The agreement must be limited to a reasonable time (such as 1-2 years) and must be limited in geography—usually 20-30 miles from where the physician formerly practice  (the entire United States is too large a proscriptive area). Finally, in Texas, a physician non-compete must contain a buyout clause, allowing the physician to buy himself out of the non-compete. 

Physicians, rather than attempt this on your own, would be wise to hire an experienced healthcare attorney to assist with the terms of the agreement. This is no time to sign whatever is placed in front of you by a friendly hospital human resources manager. 

 

Related Articles

  • Physicians Associations Offer Resources for Fighting Burnout
  • Young Physicians Looking for More Than Just Compensation
  • Helping Physicians Recognize They're Burned Out
  • 5 Ideas for Managing Physicians' Outside Activities
  • If I Could Pick One Superpower..

Resource Topics rightRail

  • Resource Topics
  • Partner Content
Mobile
Work/Life Balance
Medical Billing & Collections
Coding
HIMSS
Ebook: Improving Your Practice’s Revenue Without Adjusting Your Revenue Cycle Process
Taking an Integrated Data-Driven Approach to Charge Capture
Physician Burnout and the Burden of Documentation
Interface Engines Simplify Interoperability – But Should you Go It Alone?
The impact of patient financial satisfaction on the independent medical practice
Connect with Us
  • Twitter
  • Facebook
  • LinkedIn
  • RSS
Modern Medicine Network
  • Home
  • About Us
  • Advertise
  • Advertiser Terms
  • Privacy statement
  • Terms & Conditions
  • Editorial & Advertising Policy
  • Editorial Board
  • Contact Us
Modern Medicine Network
© UBM 2018, All rights reserved.
Reproduction in whole or in part is prohibited.