Navigating Non-Compete Clauses In Physician Contracts

Non-compete clauses in a Physician contract can limit a physician’s ability to work within certain geographic areas or certain specialties after their employment with the organization they are with ends. 

These clauses typically specify what the geographic area is, the scope of practice - whether it only has a specialty or it includes other types of care, and how long the non-compete is in position for. While employers say that these non-competes help prevent unfair competition and safeguard investments, these non-compete clauses can greatly limit a physician’s job flexibility and continuity of care for the patients.

When reviewing the noncompete clauses, make sure you understand the geographical radius, as that can severely limit other options of employment, the practice restrictions, the duration, and if there are any financial penalties if the clause is breached. 

While some states have a ban against non-competes, making them unenforceable, the ban is not a nationwide ban, and you should check with your state on the enforceability of the clause, because of this lack of enforceability, the healthcare industry has seen some employers start to shift to alternatives such as non-solicitation agreements, that prevent physicians from soliciting patients and staff, but don’t prevent practice within any area, confidentiality agreements, and liquidated damages where they propose a financial penalty for leaving.

Such contracts can be intimidating to try and work through, Irvine Legal is here to help. We review physician contracts and help them feel secure with what they are signing.