In Florida, as in most states throughout the country, physician non-compete agreements are legal and enforceable. I often am critical of the use of non-compete agreements, particularly when they are used in medicine. First and foremost, restricting a patient’s right to choose his doctor simply is contrary to the public interest. Second, patients generally have relationships with specific doctors, not with entire practices. Nonetheless, such agreements are widely used in medicine. In light of this, doctors must take certain steps to protect their interests.
Doctors need to scrutinize their employment contracts. To the extent possible, every doctor contemplating signing a contract with a practice, hospital or medical group should have that contract reviewed by an attorney. This is not just about non-compete agreements. It’s about everything: compensation, bonus structure, the non-compete clause, partnership prospects, everything. If you are a new physician, a review of your contract may be less helpful, because you may not have the leverage to negotiate better terms. But if you are a mid-career physician leaving one practice and entertaining offers from a variety of other practices, you should have a lawyer working with you to evaluate the terms of each possible deal. If you do have the ability to renegotiate the terms of your employment contract, there are several key areas of the contract to address. In my view, one of the most significant issues to address is the non-compete issue, generally.
First, if you presently are subject to a non-compete agreement with your current employer, you need to exercise caution. Perhaps more than in any other industry, companies in the healthcare sector – including hospitals and medical practices – will aggressively enforce non-compete agreements. In almost every non-compete dispute involving doctors, the real issue is patients. A medical practice is fighting to prevent the doctor from leaving, joining a rival practice and then taking his patients with him. If you are that doctor, and you are changing practices under a non-compete agreement, you need to evaluate your options very carefully. If possible, you may be able to move to a practice outside of the restricted area. If not, and if there appears to be some risk of litigation, you may want any new practice that you join to indemnify you against any claims arising out of your original non-compete agreement. Although this might sound like an aggressive play, I have represented a number of doctors who were so well-established, had such strong reputations and had such a loyal patient base that their new practice was willing to indemnify them in any litigation related to their non-compete agreement with their former employer.
Second, there is the issue of a new non-compete agreement with the new practice. Most physician employment contracts will contain aggressive non-compete restrictions. For example, the contract may say that the doctor cannot practice medicine (or own any interest in a medical practice) anywhere within a twenty mile radius of any of the Company’s facilities. Suppose the company has multiple medical facilities or centers throughout the state of Florida. A doctor could very easily find herself prevented from practicing medicine in half of the state. In some instances, it may be possible to negotiate the actual language of the non-compete restriction. For instance, a real coup would be to convince the practice that a non-compete restriction is unnecessary, and instead, have them agree to a non-solicitation clause (e.g. doctor will not solicit any of the practice’s patients for two years). As you can see, a non-solicitation clause gives the doctor much more wiggle room. Suppose a doctor leaves the practices, starts a rival practice and his patients follow him. If he has a non-compete agreement, he may be in violation. But if he only has a non-solicitation agreement? The doctor is on much better footing. If the practice is not willing to agree to these sorts of concessions, a doctor can still push to narrow the geographic and/or temporal limitations of the non-compete covenant.
These are just specific non-compete issues. Obviously, any doctor should have his attorney carefully scrutinize the entire contract, not only for non-compete concerns, but also for issues related to compensation, bonuses, partnership prospects, method of dispute resolution, and numerous other issues.
Jonathan Pollard is a competition lawyer based in Fort Lauderdale. He is licensed in all Florida federal and state courts and routinely represents clients in Fort Lauderdale, Miami, West Palm Beach, Boca Raton, Fort Myers, Tampa, Orlando, Jacksonville, and Sarasota. His office can be reached at 954-332-2380.