Breaking non competes

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Define breaking? Are you saying you signed a non compete and now you are competing? If so that will end in a lawsuit
 
It's likely a geographic no compete. I have seen various guys come out of their contracts and set up shops within the geographic limits of their no compete clause. None of have them have been sued by their previous employers. I specifically talked to a couple of them and they both said that it's almost impossible to enforce because it violates some labor laws, apparently takes away your "ability to work". They are all doing well so far, even taking call at their previous employer. Other physicians who have done the same are also doing fine, none have been sued by their previous employers for violating their non compete clause.
 
Geographic noncompetes don't tend to stick well. They aren't enforceable, in most cases.

Though, if you are thinking about this, you should ask a real lawyer with actual experience in HR law.
 
While there are certainly some doctors that ignore the non-compete, it all depends on how badly the employer wants to enforce it. Do you want to spend money on an attorney to fight it when you signed it originally or risk them not filing a lawsuit?
 
Sam212 said:
It's likely a geographic no compete. I have seen various guys come out of their contracts and set up shops within the geographic limits of their no compete clause. None of have them have been sued by their previous employers. I specifically talked to a couple of them and they both said that it's almost impossible to enforce because it violates some labor laws, apparently takes away your "ability to work". They are all doing well so far, even taking call at their previous employer. Other physicians who have done the same are also doing fine, none have been sued by their previous employers for violating their non compete clause.
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It's a state dependent issue. I have seen multiple lawsuits against physicians violating a geographic non-compete clause, most eventually settled or decided in favor of the employer. If you sign a contract that says you cannot do something and then do it, it can be kinda hard to win an argument in court.
 
It really depends. Mostly on the state, and then on the "reasonableness" of the non compete. For instance, I have a non compete in my contract that is totally unreasonable in scope, fortunately I live in California and its 100% unenforceable and actually puts the writer at risk. Its good to be familiar with your specifics.
 
[QUOT="Plastikos, post: 17254271, member: 73519"]It really depends. Mostly on the state, and then on the "reasonableness" of the non compete. For instance, I have a non compete in my contract that is totally unreasonable in scope, fortunately I live in Califrnia and its 100% unenforceable and actually puts the writer at risk. Its good to be familiar with your specifics.[/QUOTE]
care to explain?
 
In California non-competes are on their face illegal from the get go. It actually puts the writer of the contract liable for damages if they arent careful. There have been several high profile cases where national companies were too lazy to change their "standard" contracts and really just wanted to intimidate people where they ended up paying large sums of money. There are rare equity/partnership situations where it could apply, but they are very specific and not the usual case. Besides, im an independent contractor legally, so that would be hard to square without a different liability popping up.

Even in states where theyre legal they cant be overly broad or long, and are often changed to something more reasonable.
 
I'm from a state where non-competes need to be handled just right in order to be enforceable (presented 2 weeks before start date, has reasonable limitations, etc.). However, some states have very vague stipulations.

A family member is a corporate lawyer for a tech company and they routinely hand out unenforceable non-competes just to scare people from leaving. Just the fact that you have one does not necessarily mean it is enforceable. If it is though, that's a huge can of worms to open if you challenge it.
 
Seperate from legal enforcement likelihood, OP......did you give your word not compete in a manner that you are now planning on competing?
 
Plastikos said:
In California non-competes are on their face illegal from the get go. It actually puts the writer of the contract liable for damages if they arent careful. There have been several high profile cases where national companies were too lazy to change their "standard" contracts and really just wanted to intimidate people where they ended up paying large sums of money. There are rare equity/partnership situations where it could apply, but they are very specific and not the usual case. Besides, im an independent contractor legally, so that would be hard to square without a different liability popping up.

Even in states where theyre legal they cant be overly broad or long, and are often changed to something more reasonable.
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My state is like this. Its not uncommon for subspecialists to have to go back to their original training to avoid a lawsuit - for example, my allergist tried to break his noncompete. The hospital attorney argued, and the judge agreed, that since he could go back to internal medicine that the allergy-only noncompete did not represent an undue hardship. Same thing happened with a cardiologist here in town.
 
sb247 said:
I'm asking if OP can be trusted to keep their word
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I see what you're getting at, and I applaud it to a degree - but I think it depends on the situation. I left my last job over broken promises by a ****ty hospital administrator. Luckily I didn't have a noncompete, but if I had it wouldn't have changed what I did.
 
VA Hopeful Dr said:
I see what you're getting at, and I applaud it to a degree - but I think it depends on the situation. I left my last job over broken promises by a ****ty hospital administrator. Luckily I didn't have a noncompete, but if I had it wouldn't have changed what I did.
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I agree that it's possible for the group/hospital to have legitimately not kept up their part of the bargain. But I've seen (in a few industries) people being very creative in their justifications for not keeping their word in issues like this...they use the group/company to build up a client list and contacts and then strike out on their own while trying to take advantage of all they built on the companies dime.

I don't know OPs situation but it seems people are pretty quick to just cheer for the doc breaking the non-compete...context is important
 
sb247 said:
I agree that it's possible for the group/hospital to have legitimately not kept up their part of the bargain. But I've seen (in a few industries) people being very creative in their justifications for not keeping their word in issues like this...they use the group/company to build up a client list and contacts and then strike out on their own while trying to take advantage of all they built on the companies dime.

I don't know OPs situation but it seems people are pretty quick to just cheer for the doc breaking the non-compete...context is important
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Geographic non-competes are not enforceable for the same reason that you can't sign a waiver of right to sue for malpractice prior to undergoing surgery. Well, you could be asked to sign something like that, and maybe be fool enough to do it, but when it comes down to it, it won't stick. You also can't legally sell yourself into actual slavery. You can try, and someone might take the other end of the contract, but no courts will enforce it.

There are boundaries around contract law. They prohibit parties from being taken advantage of by one another. Employers who put geographic non-compete clauses in their contracts are fully aware that these are frequently not actually enforceable, but they benefit from putting them in anyway because people who do not know that those clauses are invalid will abide by them.

I understand your position, that a person should keep their agreements. But I feel that the chicanery begins when the invalid clause is inserted into the contract. If the party who put it in there knows that it is bunk, then why should I even fight to have it removed before I sign? If anything, knowing that an employer is willing to use trickery to attempt to gain a benefit in a contract should be a red flag for seeking a different opportunity. But if I am willing to overlook that flaw, my generosity toward the other party need not extend to allowing their malfeasance to benefit them, by "keeping my word" to abide by a flawed contract.
 
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I am not a lawyer, but... My undergrad degree is in HR management. I was accepted to medical school based on having enough credits, but those were scattered between several institutions and I still needed to complete a degree before matriculation. So, a degree in business admin was the cheapest, fastest option. Although I did cram a full 90 credits into less than a year of school (online program,) it was a legit, accredited BS in Business Admin, HR and included sitting for national certification exams in HR and project management. It was just a way to be able to check the final box on the pre-reqs to take my seat in med school, but I figured that since it involved so much study of contract law and employment issues, it might be helpful when I am ready to open a practice or seek professional employment.

So, while I am running my mouth off semi-anonymously on the internet, these aren't entirely uninformed opinions. I still would seek actual legal advice if I were facing a contract, but at least I know that it is well known among HR managers that putting a geographic non-compete clause in an employment contract is liable to have the same effect as inserting a clause demanding a talking unicorn. Nice thing to want but no one is actually going to be held accountable for delivering on that promise, and if you get someone to seriously agree to do so, that in itself can be used to argue that the contract was invalid from the start.
 
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Gastrapathy said:
To say noncompetes in CA are not enforceable is half true. They cannot be enforced against employees but have been enforced against partners.
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This is why actual contract lawyers in the jurisdiction in question should be consulted prior to signing any contract, and certainly prior to any action which may be construed as a violation of the contract.

As much as I think geographic noncompetes in employment contracts are generally bunk, I'm sure there are some locals that enforce them to the letter in favor of the employer. (I'm looking at you Georgia and Louisiana... I'm not certain and don't care enough to do the research, but in general your laws tend to be byzantine and regressive and I wouldn't expect any less in this instance.)
 
Promethean said:
Geographic non-competes are not enforceable for the same reason that you can't sign a waiver of right to sue for malpractice prior to undergoing surgery. Well, you could be asked to sign something like that, and maybe be fool enough to do it, but when it comes down to it, it won't stick. You also can't legally sell yourself into actual slavery. You can try, and someone might take the other end of the contract, but no courts will enforce it.

There are boundaries around contract law. They prohibit parties from being taken advantage of by one another. Employers who put geographic non-compete clauses in their contracts are fully aware that these are frequently not actually enforceable, but they benefit from putting them in anyway because people who do not know that those clauses are invalid will abide by them.

I understand your position, that a person should keep their agreements. But I feel that the chicanery begins when the invalid clause is inserted into the contract. If the party who put it in there knows that it is bunk, then why should I even fight to have it removed before I sign? If anything, knowing that an employer is willing to use trickery to attempt to gain a benefit in a contract should be a red flag for seeking a different opportunity. But if I am willing to overlook that flaw, my generosity toward the other party need not extend to allowing their malfeasance to benefit them, by "keeping my word" to abide by a flawed contract.
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We just have different views on this. It being legal to break my word doesn't mean I'm a better man than if I illegally break my word.
 
sb247 said:
We just have different views on this. It being legal to break my word doesn't mean I'm a better man than if I illegally break my word.
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I respect your stance, even when I find it untenable. I'm not sure you can say the same about me, but I'm okay with that.
 
Promethean said:
I respect your stance, even when I find it untenable. I'm not sure you can say the same about me, but I'm okay with that.
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I can understand the appeal of "sticking it to the man" particularly when the government intrusion has all but forced docs into large groups or hospital employment.
 
Promethean said:
Geographic non-competes are not enforceable for the same reason that you can't sign a waiver of right to sue for malpractice prior to undergoing surgery. Well, you could be asked to sign something like that, and maybe be fool enough to do it, but when it comes down to it, it won't stick. You also can't legally sell yourself into actual slavery. You can try, and someone might take the other end of the contract, but no courts will enforce it.

There are boundaries around contract law. They prohibit parties from being taken advantage of by one another. Employers who put geographic non-compete clauses in their contracts are fully aware that these are frequently not actually enforceable, but they benefit from putting them in anyway because people who do not know that those clauses are invalid will abide by them.

I understand your position, that a person should keep their agreements. But I feel that the chicanery begins when the invalid clause is inserted into the contract. If the party who put it in there knows that it is bunk, then why should I even fight to have it removed before I sign? If anything, knowing that an employer is willing to use trickery to attempt to gain a benefit in a contract should be a red flag for seeking a different opportunity. But if I am willing to overlook that flaw, my generosity toward the other party need not extend to allowing their malfeasance to benefit them, by "keeping my word" to abide by a flawed contract.
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Geographic noncompetes are very enforceable, as with everything else its state dependent.
 
Promethean said:
Geographic non-competes are not enforceable for the same reason that you can't sign a waiver of right to sue for malpractice prior to undergoing surgery. Well, you could be asked to sign something like that, and maybe be fool enough to do it, but when it comes down to it, it won't stick. You also can't legally sell yourself into actual slavery. You can try, and someone might take the other end of the contract, but no courts will enforce it.

There are boundaries around contract law. They prohibit parties from being taken advantage of by one another. Employers who put geographic non-compete clauses in their contracts are fully aware that these are frequently not actually enforceable, but they benefit from putting them in anyway because people who do not know that those clauses are invalid will abide by them.

I understand your position, that a person should keep their agreements. But I feel that the chicanery begins when the invalid clause is inserted into the contract. If the party who put it in there knows that it is bunk, then why should I even fight to have it removed before I sign? If anything, knowing that an employer is willing to use trickery to attempt to gain a benefit in a contract should be a red flag for seeking a different opportunity. But if I am willing to overlook that flaw, my generosity toward the other party need not extend to allowing their malfeasance to benefit them, by "keeping my word" to abide by a flawed contract.
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Just to echo what Dr. Hopeful said, geographic non-competes are very much legal because they are protecting someone from stealing someone else's business (assuming the state they are signed in hasn't said otherwise) and is not taking advantage of one party (although they tend to feel that way). They do have to be reasonable though, which usually means including an expiration date and a geographic boundary (miles). One of the largest multi-state nonprofit health systems in the NW is notorious for having these contracts with family practice docs and forcing them to either move out of town or pay 100k+ to open up shop nearby and these are being upheld in court.

Similarly, the second you propose that a non-compete clause be removed from your contract may be the moment that they decide they don't need you.

If you sign a contract there is no 'trickery' because you were able to read it in full before agreeing.
 
tymont12 said:
Just to echo what Dr. Hopeful said, geographic non-competes are very much legal because they are protecting someone from stealing someone else's business (assuming the state they are signed in hasn't said otherwise) and is not taking advantage of one party (although they tend to feel that way). They do have to be reasonable though, which usually means including an expiration date and a geographic boundary (miles). One of the largest multi-state nonprofit health systems in the NW is notorious for having these contracts with family practice docs and forcing them to either move out of town or pay 100k+ to open up shop nearby and these are being upheld in court.

Similarly, the second you propose that a non-compete clause be removed from your contract may be the moment that they decide they don't need you.

If you sign a contract there is no 'trickery' because you were able to read it in full before agreeing.
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As was mentioned previously, there is a difference between employment and partnership contracts.

Even with an expiration date and a mile boundary, they have often found to be unenforceable, even in states where they had previously been honored. All it takes is for one court to find that they place an undue burden for a precedent to be set. That process has occurred so often that such clauses are generally toothless. The places where they stick are the exceptions. As with everything, jurisdiction matters and local lawyers should be consulted.

Your final point is the very reason these clauses are out of favor. If even proposing the objection to the clause can cause you to lose the opportunity, and if the clause itself severely limits your capacity to earn a livelihood, then it can be construed as an unreasonable burden. Because employers were so heavy handed with these clauses, writing them for terms of many years and hundreds of miles, they killed the goose. If they had been 1-2 years, 25 mile radius exclusions, and not signed under duress, they would likely not have been made illegal or invalid in so many jurisdictions.

Trickery might be a strong word, but it is absolutely bad faith to include a clause that one knows to be invalid, in the hopes that the other party will abide by it anyway, whether out of a sense of honor or intimidation.
 
Yes, if you are a partner or have an equity type stake in an operation then even in California a non compete will be valid. This is not the most common situation as most are employees or independent contractors. Also, if you are planning on becoming a partner I surely hope you'd have at that time realized the importance of educating yourself on the particulars of the contracts you've signed. You have to be careful and examine the reasons, pros/cons of getting equity or a partnership and what it will do to your options.
 
Promethean said:
As was mentioned previously, there is a difference between employment and partnership contracts.

Even with an expiration date and a mile boundary, they have often found to be unenforceable, even in states where they had previously been honored. All it takes is for one court to find that they place an undue burden for a precedent to be set. That process has occurred so often that such clauses are generally toothless. The places where they stick are the exceptions. As with everything, jurisdiction matters and local lawyers should be consulted.

Your final point is the very reason these clauses are out of favor. If even proposing the objection to the clause can cause you to lose the opportunity, and if the clause itself severely limits your capacity to earn a livelihood, then it can be construed as an unreasonable burden. Because employers were so heavy handed with these clauses, writing them for terms of many years and hundreds of miles, they killed the goose. If they had been 1-2 years, 25 mile radius exclusions, and not signed under duress, they would likely not have been made illegal or invalid in so many jurisdictions.

Trickery might be a strong word, but it is absolutely bad faith to include a clause that one knows to be invalid, in the hopes that the other party will abide by it anyway, whether out of a sense of honor or intimidation.
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I'd like to step out of the legality discussion here and discuss the concept of a non-compete.....do you see something as morally/professionally incorrect in saying, "I have a client base here, you may come and work for my group/hospital and I'll get you set up. The only thing I require in return, is that if I give you access to my clients, you can't try to leave with them. You can't work within normal driving distance for a 2years." It doesn't impose an undue burden at all. You're still a doctor in america, you can still make a living....you just don't get to build a poaching plan on my payroll.
 
Promethean said:
As was mentioned previously, there is a difference between employment and partnership contracts.

Even with an expiration date and a mile boundary, they have often found to be unenforceable, even in states where they had previously been honored. All it takes is for one court to find that they place an undue burden for a precedent to be set. That process has occurred so often that such clauses are generally toothless. The places where they stick are the exceptions. As with everything, jurisdiction matters and local lawyers should be consulted.

Your final point is the very reason these clauses are out of favor. If even proposing the objection to the clause can cause you to lose the opportunity, and if the clause itself severely limits your capacity to earn a livelihood, then it can be construed as an unreasonable burden. Because employers were so heavy handed with these clauses, writing them for terms of many years and hundreds of miles, they killed the goose. If they had been 1-2 years, 25 mile radius exclusions, and not signed under duress, they would likely not have been made illegal or invalid in so many jurisdictions.

Trickery might be a strong word, but it is absolutely bad faith to include a clause that one knows to be invalid, in the hopes that the other party will abide by it anyway, whether out of a sense of honor or intimidation.
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And I am telling you that I personally know two physicians who's geographic based noncompetes were upheld, so in my state they are far from toothless.
 
sb247 said:
I'd like to step out of the legality discussion here and discuss the concept of a non-compete.....do you see something as morally/professionally incorrect in saying, "I have a client base here, you may come and work for my group/hospital and I'll get you set up. The only thing I require in return, is that if I give you access to my clients, you can't try to leave with them. You can't work within normal driving distance for a 2years." It doesn't impose an undue burden at all. You're still a doctor in america, you can still make a living....you just don't get to build a poaching plan on my payroll.
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I don't have an issue with that, and if I signed something like that, I wouldn't have a problem abiding by it, legality aside. I have skipped pursuing opportunities that would have conflicted with reasonable noncompetes that I have signed.

What many employers have done, and some still try to do, is to include clauses restricting the right to work within 50 or 100 or 200 miles, for 5 or 10 years or without an expiration. I briefly worked for a company that likes to put clauses in their boilerplate contracts that say you won't work in your professional capacity withing 100 miles of any of their offices for 1 year. They are a travel nursing / medical staffing agency that has offices everywhere, so that basically means not working in most of the US. They wouldn't let you line it out, but the recruiters would tell people that the agency doesn't try to enforce the clause. Someone in corporate thought it was a good way to increase retention, to convince employees that they could be sued if they left and tried to work for another company... since most people can't afford not to work in their field for a year, they hope that people are frightened to seek other jobs and will stay. That is actually how the local recruiter explained the matter to me. They were pretty shameless about it. I should have walked, but I needed a job and no one else was getting back to me just then.

The placement was a fiasco and I wasn't able to complete the assignment due to concerns about losing my license over some of the shenanigans that were going on. I had a different job nearby a few days later, and the recruiter at the first agency called me quite a few names and told me they were going to sue to enforce the noncompete. My lawyer made one phone call and I never heard another thing from them.

I didn't go to work for one of their clients that I met while working for them, since that would have been unethical. But I certainly didn't feel bound to avoid working anywhere for a year.

VA Hopeful Dr said:
And I am telling you that I personally know two physicians who's geographic based noncompetes were upheld, so in my state they are far from toothless.
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It is possible that you just skimmed my posts, and so did not notice the multiple times I have stated something like: "it depends upon the jurisdiction, consult local attorneys."
 
Promethean said:
I don't have an issue with that, and if I signed something like that, I wouldn't have a problem abiding by it, legality aside. I have skipped pursuing opportunities that would have conflicted with reasonable noncompetes that I have signed.

What many employers have done, and some still try to do, is to include clauses restricting the right to work within 50 or 100 or 200 miles, for 5 or 10 years or without an expiration. I briefly worked for a company that likes to put clauses in their boilerplate contracts that say you won't work in your professional capacity withing 100 miles of any of their offices for 1 year. They are a travel nursing / medical staffing agency that has offices everywhere, so that basically means not working in most of the US. They wouldn't let you line it out, but the recruiters would tell people that the agency doesn't try to enforce the clause. Someone in corporate thought it was a good way to increase retention, to convince employees that they could be sued if they left and tried to work for another company... since most people can't afford not to work in their field for a year, they hope that people are frightened to seek other jobs and will stay. That is actually how the local recruiter explained the matter to me. They were pretty shameless about it. I should have walked, but I needed a job and no one else was getting back to me just then.

The placement was a fiasco and I wasn't able to complete the assignment due to concerns about losing my license over some of the shenanigans that were going on. I had a different job nearby a few days later, and the recruiter at the first agency called me quite a few names and told me they were going to sue to enforce the noncompete. My lawyer made one phone call and I never heard another thing from them.

I didn't go to work for one of their clients that I met while working for them, since that would have been unethical. But I certainly didn't feel bound to avoid working anywhere for a year.



It is possible that you just skimmed my posts, and so did not notice the multiple times I have stated something like: "it depends upon the jurisdiction, consult local attorneys."
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I think we have small differences to approach but we still have a lot in common on this topic
 
The moral side to the story is an odd way to think about it and is the way people in power get everyone else to suffer to their benefit. There is no morality involved, just legal and ethical issues which change over time. Unless you're actually stealing patients or in some way directly competing nefariously its a bit absurd. No one should have their ability to make a living where they want restricted by some wild clause. There is far too much work to go around almost anywhere to worry about "competing", its non sense. Its simply gerrymandering by corporations trying to lock in their advantage instead of providing a better service than the other guys.

I assure you that the writers of the contract arent thinking about morality, only business. Everyone would be better off approaching things from a more rational and business standpoint, less personal more tactical. There will be lots of grey zone solutions to things that seem black and white that make both parties content.

Obviously, its best to be informed about these things prior to signing a clause that puts you at a significant disadvantage, and avoid doing so, everything is negotiable, no matter how "standard" their contract is it surely isnt.
 
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JoeyB said:
Interested in hearing about people's experience with breaking non competes. Any takers?
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Disclaimer: I am not a lawyer, nor have I had personal experience with non-competes.

From what I understand, and my experience with friends/colleagues who have had issues with non-competes:

Non-competes are difficult to enforce in many areas, especially if geographic. However, certain states may have non-competes upheld before and the only way to tell if your state is one of those is to research it yourself.

In my opinion, non-competes are mostly a deterrent to prevent you from leaving. The odds that it will be enforced on you and make you move to a separate county/area/state are pretty low. However, if the group/organization wants to they can draw it out for a long time in court, especially if they have their own lawyer and deep pockets. Having to retain your own lawyer to fight a non-compete will drain your pockets quickly and other practices in the area might not want to take a chance on a person in the middle of a non-compete clause battle. Tread lightly.

-Sensei
 
Promethean said:
As was mentioned previously, there is a difference between employment and partnership contracts.

Even with an expiration date and a mile boundary, they have often found to be unenforceable, even in states where they had previously been honored. All it takes is for one court to find that they place an undue burden for a precedent to be set. That process has occurred so often that such clauses are generally toothless. The places where they stick are the exceptions. As with everything, jurisdiction matters and local lawyers should be consulted.

Your final point is the very reason these clauses are out of favor. If even proposing the objection to the clause can cause you to lose the opportunity, and if the clause itself severely limits your capacity to earn a livelihood, then it can be construed as an unreasonable burden. Because employers were so heavy handed with these clauses, writing them for terms of many years and hundreds of miles, they killed the goose. If they had been 1-2 years, 25 mile radius exclusions, and not signed under duress, they would likely not have been made illegal or invalid in so many jurisdictions.

Trickery might be a strong word, but it is absolutely bad faith to include a clause that one knows to be invalid, in the hopes that the other party will abide by it anyway, whether out of a sense of honor or intimidation.
Click to expand...

You are stating the same point over and over again: that abusive and/or unrealistic non-competes are unenforceable. Everyone agrees on that point. Yes, many states have made them difficult to enforce but they are still very much valid in many states and are not limited to partners. Anyone who is privy to clientele lists or proprietary information is usually open to receive a non-compete (as always, depending on the state). And yes, you can definitely lose an employment opportunity if you don't agree with what their contract says even if it isn't 'favorable' to potential employees. They exist for a reason, whether they are well-intentioned or not. Likewise, a company would remove it if it ever was a problem.

I also agree that this is something to be left up to local counsel but saying that non-competes are usually unenforceable is not a good position to take. They are used for business purposes and no personal ethic is taken into consideration when bottom-lines are at stake (whether it's actually true or not). You may be one of hundreds of family practitioners (or whatever other specialty) that may try to leave and poach their patients so they are protecting their interests and most likely very willing to waste time and money on a lawsuit they will lose if it means they will keep other docs from trying the same.
 
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