Non-Compete Clause

[Titrate2Life]

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Who has one?

I have a contract with a proposed 30 mile diameter non-compete clause. I have concerns as to how non-compete clauses could make me pack up and move my family if things go poorly at some point down the road.

What are your thoughts?

 

[TooMuchResearch]

Who has one?

I have a contract with a proposed 30 mile diameter non-compete clause. I have concerns as to how non-compete clauses could make me pack up and move my family if things go poorly at some point down the road.

What are your thoughts?

Just out of curiosity, in how large of a BC/BE EM area are you located? I know some recent grads who took positions 45-60 miles away for 3x12 hr positions, so they could probably take jobs closer to the city without violating that type of noncompete if needed.

 

[Groove]

2nd CMG gig and I've never had one. The only one's I've seen were in a SDG contract offer and a hospital employee contract. The hospital employee one was ridiculous. It essentially was a non compete to work in ANY ED in the COUNTRY without express written permission from the hospital administration. You can imagine what I said to that one. Last I heard, they only have one guy left and are almost completely run by Weatherby locums. 90K ED. Can you imagine the money they are hemorrhaging on locums? It was too bad because I had told them 2-3 months prior not to put that in the contract as nobody would sign it and good luck getting new docs to sign it.

My current CMG could care less who I PRN for in the city but they provide enough incentives to keep me right where I'm at. I like that.

 

[two guys]

I've never had one. I work for a CMG, but they weren't in the SDG contracts I looked at either. Seems like a regional thing. I think some states have essentially outlawed them.

I would find it hard to sign a contract with one. People change jobs more frequently than they plan to for various reasons. If a place isn't a good fit, they shouldn't want you stuck there bc of a non compete (or a insurance tail, or losing vestment in a benefit). My wife's work is hard to establish and it would be a huge deal to have to move out of town.

 

[gman33]

In my state, non competes are hard to enforce.
I would be hard pressed to sign a contract with this clause no matter how short the distance.

 

[WilcoWorld]

My contract has a non-compete clause. However, there's legal precedent that it's essentially non-enforcable, and I'm told that (before I came) someone bought out of this clause for $1. Yeah, it is sort of an F you to the docs, but I don't loose sleep over it.

 

[Arcan57]

My contract has a non-compete clause. However, there's legal precedent that it's essentially non-enforcable, and I'm told that (before I came) someone bought out of this clause for $1. Yeah, it is sort of an F you to the docs, but I don't loose sleep over it.

If it's not enforceable, they should be willing to wave it. If they're not willing to wave it, it's because their lawyers think they have a shot at it holding up. If their lawyers think they have a shot at it being upheld, they may be willing to litigate it. If the complaint isn't summarily dismissed, this may result in an injunction against working until the matter is settled. So I wouldn't just ignore the clause.

 

[Birdstrike]

Who has one?

I have a contract with a proposed 30 mile diameter non-compete clause. I have concerns as to how non-compete clauses could make me pack up and move my family if things go poorly at some point down the road.

What are your thoughts?

I've never heard of a physician contract not having a non-compete in some form. The one in my contract is so restrictive that the attorney I had look at it, said it was so flagrantly un-enforceable that it was better to leave as is and ignore, as opposed to negotiating it to a weaker, and potentially more enforceable one.

This stuff depends on state law (difficult to enforce in my state), as I think someone above said. If it's important to you, have an attorney who does lots of doctor contracts look at it. Options might include asking to have it stricken, weakened to smaller mile radius or shorter time span.

 

[The White Coat Investor]

Let me share my experience.

When you think about it, there is no reason for an employer to have a non-compete agreement for an emergency physician. (Almost) nobody ever chose an ER for an individual physician. If you left and went to work for the ED across the street, your old ED is not going to lose any business at all.

So I was surprised when I saw my contract included a non-compete. In a reasonable way, I brought it up and said I wasn't really willing to sign it because if things didn't work out well for them or me, I didn't want to have to move my family. They quickly said, "Oh, that's not why we have that there. What we really care about is that you don't form your own group and steal the contract."

"Fine," I said. "Let's re-write it so it reflects that". And we did.

Find out why your employer wants the no-compete. It isn't fair to you for them to have such a one-sided "golden handcuffs" clause since they have no valid business reason to have it (unlike a cardiology or primary care job where you'd take your patients with you). The clause is there simply to make it harder for you to leave them. Do you really want to be in business with someone who writes contracts like that?

 

[dotcb]

I would attempt to negotiate it away. I know one doc who paid $ to strike it from her contract. I would strongly think about not taking this job if you can't get rid of this. AAEM has done a lot of work. As has been already stated, non-compete clauses have no business in our field. Don't let an employer limit how much you can use your single biggest asset - your ability to work as a doctor.

 

[ERDude]

My SDG has a limited non compete that simply states if our hospital terminates our contract I cannot work at this particular hospital for a period of 12 months. I am allowed to work anywhere else. I'm fine with this as it (at least theoretically) disincentives the hospital replacing us b/c the new group would need to bring in 100% new docs.

 

[SoCuteMD]

Found another upside to academics - no non-compete in my contract!

 

[DocRGR]

My SDG has a limited non compete that simply states if our hospital terminates our contract I cannot work at this particular hospital for a period of 12 months. I am allowed to work anywhere else. I'm fine with this as it (at least theoretically) disincentives the hospital replacing us b/c the new group would need to bring in 100% new docs.

Can other folks comment as to whether this actually helps secure a contract? Seems clever, but I'm curious if it's really effective.

 

[Birdstrike]

Can other folks comment as to whether this actually helps secure a contract? Seems clever, but I'm curious if it's really effective.

Not very effective. Once a group is booted out, all of a sudden you've got 5, 10, 20 or however many ER doctors with no jobs. They may have all signed a piece of paper stating they promise not to go with a new contract group, but what's to stop them?

If they don't go with the new group who usually is going to offer to hire them, then they're all scrambling for jobs, unemployed. If they do break their previous agreement and sign with the new group, they could in theory be sued by the old group if, and this is a big IF: if the old group even exists anymore to sue them for violating the clause.

See? Once the ER group (pure ER-only group) loses it's contract, it effectively ceases to exist and ceases to have any ability to sue for anything. Once you lose your contract, you leave the group, and the group ceases to generate any more cash flow. (They now have no employees). Are you going to stay with the group that has no ER contract for you to get hours at, and pay a bunch of lawyers to sue the docs who took the new job, as you scramble to go find employment? Probably not. The more practical thing is for everyone to bite their tongue and work for the new cannibalistic group that fired you, so you can make your house payment, while you decide if it's tolerable or time to look for a new job and maybe move.

An exception would be if it's a multi-specialty/multi-contract group where the other specialties/contracts continue to exist after the ER group splits off. Then in theory, your previous group could sue the guys who left after contract loss, to avenge that. Or more likely, they could threaten to do so, hoping the new CMG who kicked them out will pay some money to "buy out" the non-competes. In this scenario, the old group likely gets whatever money was negotiated, not the ER doctors who left to work for the predatory contract-taking group.

 

[Hercules]

I live in a state where non-competes are unenforceable. A lot of contracts still have them in there. Anytime I moonlit I had them strike it. A lot of contracts that don't have a noncompete will however have a non-interference or non-solicitation clause. It basically says you won't try to take over the contract from the group employing you.

 

[two guys]

If it's not enforceable, they should be willing to wave it. If they're not willing to wave it, it's because their lawyers think they have a shot at it holding up. If their lawyers think they have a shot at it being upheld, they may be willing to litigate it. If the complaint isn't summarily dismissed, this may result in an injunction against working until the matter is settled. So I wouldn't just ignore the clause.

Agree with Arcan. It's either in there because they gain something from having it (ie they think they have a shot at enforcing it or they think it'll keep you from leaving) and/or WE haven't created enough market pressure to have them removed.

If we all insisted tomorrow to have these clauses removed, it would be done. Unfortunately, we don't talk about this type of stuff nearly enough and we all suffer collectively.

There are some things that are harder to fight (SDG vs CMG, open vs closed books, due process), but this isn't really one of them. We should all at least ask to have these removed.

Ideally, we could all get together and start to create some market pressure to fix some of the other problems as well. I think non-compete and asking for due process are the 2 lowest lying fruit that we could fix if we all gave the same message (ie - you won't get a BC doc without taking these 2 out of contracts).

 

[Arcan57]

Agree with Arcan. It's either in there because they gain something from having it (ie they think they have a shot at enforcing it or they think it'll keep you from leaving) and/or WE haven't created enough market pressure to have them removed.

If we all insisted tomorrow to have these clauses removed, it would be done. Unfortunately, we don't talk about this type of stuff nearly enough and we all suffer collectively.

There are some things that are harder to fight (SDG vs CMG, open vs closed books, due process), but this isn't really one of them. We should all at least ask to have these removed.

Ideally, we could all get together and start to create some market pressure to fix some of the other problems as well. I think non-compete and asking for due process are the 2 lowest lying fruit that we could fix if we all gave the same message (ie - you won't get a BC doc without taking these 2 out of contracts).

Due process clauses are not low hanging fruit. Non-enforceable noncompetes should be a relatively easy fix in that nobody really has a strong incentive to keep them. C-suite expects to be able to get rid of problem physicians with a minimum of fuss and CMGs aren't terribly interested in losing a contract because one doc is pissing off admin. So they have a lot more skin in the game.

 

[two guys]

Due process clauses are not low hanging fruit. Non-enforceable noncompetes should be a relatively easy fix in that nobody really has a strong incentive to keep them. C-suite expects to be able to get rid of problem physicians with a minimum of fuss and CMGs aren't terribly interested in losing a contract because one doc is pissing off admin. So they have a lot more skin in the game.

I bought this explanation for a while. But, does every other physician in your hospital have due process? They do at mine and every other one I've worked at. They can still discipline docs, they just don't have the threat of "you'll be gone tomorrow without an explanation."

If they can do it for the hospitalists, they can do it for us.

 

[Titrate2Life]

Just out of curiosity, in how large of a BC/BE EM area are you located? I know some recent grads who took positions 45-60 miles away for 3x12 hr positions, so they could probably take jobs closer to the city without violating that type of noncompete if needed.

Smaller community setting with a 14 bed ER. 25000 volume.

 

[nitedoc]

I learned the hard way how bad non-compete clauses can be.

I also have a 30 mile radius clause. I didn't think it was enforceable but when looking at another hospital 25 miles away, was told they would not hire me unless I was released from this clause by my current hospital. Which, of course they wouldn't.

Hiring a lawyer and fighting it is an option, but a potentially expensive one with an uncertain outcome. So I was stuck with either a long commute or just staying where I am unless I wanted to relocate.

I will never sign a noncompete clause again.