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Non-competes can be a win-win for your medical practice

Non-competes can be a win-win for your medical practice

Have you been burned by a former employee? Perhaps you hired someone who joined your medical practice long enough to gain the confidence of some of your patients, then left and took those clients along. Maybe you learned that your former employee soon got a job at a competing medical practice and divulged some of your professional secrets or procedures to his or her new employer.

This experience may have made you wary of adding new employees to your business, but in order to run efficiently, you need skilled people on your team. Others like you have dealt with the dilemma by adding restrictive covenants to their hiring process.

Respecting the boundaries of the contract

Restrictive covenants are a popular but controversial way for people in all kinds of businesses to protect their private information, client lists and trade secrets. As a business owner, you may offer a job to someone if the candidate agrees to a non-compete contract. Such contracts may say that, in the event the employee should leave the job at your clinic, he or she will not seek employment with a direct competitor of yours. Courts are cautious about upholding non-compete agreements unless they contain certain factors:

  • The contracts may not be too broad but should focus on protecting you from losing clients or information to competing medical facilities.
  • The contract may not be indefinite in length. You must specify a duration of a specific and limited number of months or years in the agreement.
  • The contract must have a limited geographic scope, for example indicating that the employee may not work with a competitor within your county or within a certain distance from your practice.
  • The agreement may not place a burden on the employee, such as preventing him or her from getting any job in the field for which he or she is trained.

In addition, your restrictive covenant may forbid the employee from enticing your clients to follow him or her to the new job.

Make sure you get it right!

Building a medical practice takes years of hard work. You have placed your education, your finances and your reputation on the line to draw patients into your care. Without a doubt, you want to protect those efforts and the business you have created by ensuring that former employees do not take away your clients or your unique practices when they leave.

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