Non-compete agreement

[odieoh]

Hey all-

You guys were very helpful in answering some questions about contract negotiation and I have one more question. I got the financial part of my new contract hammered out, but I'm still left in a bit of an argument on the non-compete clause.

The current contract I'm working under lists a 100 mile distance as the non-compete area. I live in a rural area that is ~75 miles away from a larger city. My wife and I would be interested in living/working in that larger city. We have no immediate plans to move, and we haven't even really looked into jobs there. But part of the reason we haven't bought in to my current practice is because we think we'd be happier in a slightly bigger place, and the city in question fits the bill nicely.

We really do not draw patients from that city. Its 75 miles away, and much of that 75 miles is through windy mountain passes. In the winter time it can be quite difficult to travel between the two. I feel like the two are fairly well geographically separated.

In my most recent negotiation I mentioned that I thought the clause was overly restrictive. I was pretty straightforward about the fact that someday I may want to work in the other city, that I had no immediate plans, nor had I contacted anyone about work there. I just want to keep my options open.

He made the following concessions, but I still think the clause is unreasonable. The current clause lists a penalty of $250,000 if I work within 100 miles. He changed it to $250,000 if I work within 70 miles, and "only" $25,000 if I work within100 miles. So effectively I would owe him 25k if I choose to work in that city (within 2 years of leaving).

So, my questions are:
1) In general do you think this is enforceable? I'm in Oregon if anyone has any experience, I know it varies by state. Even if its not, I'd rather just have it out because I'd rather not have to go through legal wrangling to begin with. An ounce of prevention etc etc.
2) The contract doesn't really specify if the 70/100 miles is a Radius or if that distance reflects an actual traveling distance. ie, the city in question is 75 miles away by road distance, but only 40-50 miles away as the crow flies. I guess I know the answer to my own question here, it just needs to be more specific in the contract.
3) Any other thoughts on these kinds of clauses in general?

Edit: I have not yet signed the contract.

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[KHE]

Hey all-

You guys were very helpful in answering some questions about contract negotiation and I have one more question. I got the financial part of my new contract hammered out, but I'm still left in a bit of an argument on the non-compete clause.

The current contract I'm working under lists a 100 mile distance as the non-compete area. I live in a rural area that is ~75 miles away from a larger city. My wife and I would be interested in living/working in that larger city. We have no immediate plans to move, and we haven't even really looked into jobs there. But part of the reason we haven't bought in to my current practice is because we think we'd be happier in a slightly bigger place, and the city in question fits the bill nicely.

We really do not draw patients from that city. Its 75 miles away, and much of that 75 miles is through windy mountain passes. In the winter time it can be quite difficult to travel between the two. I feel like the two are fairly well geographically separated.

In my most recent negotiation I mentioned that I thought the clause was overly restrictive. I was pretty straightforward about the fact that someday I may want to work in the other city, that I had no immediate plans, nor had I contacted anyone about work there. I just want to keep my options open.

He made the following concessions, but I still think the clause is unreasonable. The current clause lists a penalty of $250,000 if I work within 100 miles. He changed it to $250,000 if I work within 70 miles, and "only" $25,000 if I work within100 miles. So effectively I would owe him 25k if I choose to work in that city (within 2 years of leaving).

So, my questions are:
1) In general do you think this is enforceable? I'm in Oregon if anyone has any experience, I know it varies by state. Even if its not, I'd rather just have it out because I'd rather not have to go through legal wrangling to begin with. An ounce of prevention etc etc.
2) The contract doesn't really specify if the 70/100 miles is a Radius or if that distance reflects an actual traveling distance. ie, the city in question is 75 miles away by road distance, but only 40-50 miles away as the crow flies. I guess I know the answer to my own question here, it just needs to be more specific in the contract.
3) Any other thoughts on these kinds of clauses in general?

Edit: I have not yet signed the contract.

Every attorney I've ever spoken to on that issue has said that the distance refers to the most direct "travelling" route, not a radius.

The way we do non compete in my practice is that we restrict the town and any town with a contiguous border.

Regarding the $25,000 this is one of those issues where there a few ways to approach it but I think at the end of the day, you're trying to find out what the concern is.

If you open up accross the street, the concern is obvious.

But if you really have no or virtually no patients from that town, then I would ask the guy what the concern would be if you did actually end up in that town 75 miles away. Perhaps he is concerned that people who live halfway between your current practice and the town would be willing to go see you in the new town.

Another possiblity is to keep the original 100 miles and penalty but specifically exclude that one particular town.

If you completely refuse, what happens to your position?

Obviously I do not know your situation but it seems to me that to potentially blow this whole thing up over a $25,000 non compete agreement which may end up being completely irrelevant anyways but AT WORST would cost you only $25,000 I think is short sighted. If it were me, I would sign the deal. Especially if you got everything else you wanted.

 

[odieoh]

Every attorney I've ever spoken to on that issue has said that the distance refers to the most direct "travelling" route, not a radius.

The way we do non compete in my practice is that we restrict the town and any town with a contiguous border.

Regarding the $25,000 this is one of those issues where there a few ways to approach it but I think at the end of the day, you're trying to find out what the concern is.

If you open up accross the street, the concern is obvious.

But if you really have no or virtually no patients from that town, then I would ask the guy what the concern would be if you did actually end up in that town 75 miles away. Perhaps he is concerned that people who live halfway between your current practice and the town would be willing to go see you in the new town.

Another possiblity is to keep the original 100 miles and penalty but specifically exclude that one particular town.

If you completely refuse, what happens to your position?

Obviously I do not know your situation but it seems to me that to potentially blow this whole thing up over a $25,000 non compete agreement which may end up being completely irrelevant anyways but AT WORST would cost you only $25,000 I think is short sighted. If it were me, I would sign the deal. Especially if you got everything else you wanted.

I did try to ferret out the issue. Basically it boiled down to "well I have to give you some incentive to stay," which is kind of what is making it a sticking point for me. Basically its a penalty for leaving. Its not going to be something that's going to blow up the whole deal, we are on good terms and so on.

 

[KHE]

I did try to ferret out the issue. Basically it boiled down to "well I have to give you some incentive to stay," which is kind of what is making it a sticking point for me. Basically its a penalty for leaving. Its not going to be something that's going to blow up the whole deal, we are on good terms and so on.

That's dumb on so many levels.

The incentive for you to stay should be that you build a thriving practice and you and he make great money while enjoying your work.

The incentive for you staying shouldn't be "well, I'd just love to get the hell out of this s*itbox but it's going to cost me $25,000."

That's very very shortsighted.

If that's all it is, I'd sign the contract and work hard at making it a scenario where you don't want to leave.