Covenant not to compete

core0 · May 30, 2009

Ok, I am new to the NP role. As an RN I had never even heard of a covenant not to compete.
A potential employer is telling me that these documents are standard. Basically if you leave the practice or are terminated for any reason or no reason at all (employment at will) that you cannot practice in primary care within 5 miles of the practice for 2 years. If you do not comply, you immediately owe them 2x your most recent annual salary.
This is very concerning to me. If I EVER leave I am responsible for paying them crazy money or can only work in a specialty or over 5 miles away. In the small city where the practice is centrally located (the only city even remotely covenient to my house) the vast majority of offices are within 5 miles. So really, I would be committing to lifelong employment if I agree to this.
Isn't there another option like you cannot see patients that were patients at the original practice x2 years or something????
I would love some opinions. Thanks.

Its a contract everything is negotiable. There are two issues here. One is the non-compete clause legal. Many states have ruled that these are illegal. In states where they are legal they have to be narrowly tailored.

At the PA conference last week we had a nice session on contract negotiation. The presenter stated that you have to decide if something is a drop dead issue. The presenter said that for her it was a drop dead issue and that she would never sign a non-compete clause. At my last job I had a non-compete clause that covered my specialty in a fairly limited area. I couldn't work for the competing group but geographically I could work for another group in the area.

Ultimately you are going to decide if this is a drop dead issue for you. If it is either tell them you will sign the contract without the non-compete or move on.

David Carpenter, PA-C

JDCitizen · May 30, 2009

I have seen these enforced here in Georgia and have seen it costs the offending party thousands. It really can get ugly.

I signed a contract with a similar statement mainly due to the focus of the group I was working with made it easy not to compete with the group if I left. Through negotiation I had a two clauses added if I left due to anything other than resignation the clause was void. Also after 5 years of employment the clause was void.

I have to agree with David on the "drop dead issue." Although the drop dead issue is being seen from both sides you may find through negotiation that it is not an issue or an issue that can be limited.

As for everything being negotiable? Maybe yes, maybe no... Sometimes the only negotiation strategy is to voice your concern and walk away (sometimes they call you back)...

Also I would consider an attorney look over the contract if you are leaning towards signing. Each state is different as to laws and contracts... Now if the practice won't let you have a copy of the contract prior to signing well that would certainly raise flags.

Trauma Columnist · May 30, 2009

For me, the noncompete clause is a drop dead issue: the one I almost signed was for 55 mile radius and two year duration. Nope, not gonna happen.

BChapp3182 · May 31, 2009

I would definitly not sign a no compete. You can alter it with something like should employment be terminated for any reason you agree not to solicit the practice's pts and not to take any "trade secrets" with you, etc.

core0 · Jun 1, 2009

I would definitly not sign a no compete. You can alter it with something like should employment be terminated for any reason you agree not to solicit the practice's pts and not to take any "trade secrets" with you, etc.

I think that it really depends on the situation. The last job I had the non-compete clause essentially prevented me from competing with the other group in the area but the other groups in the city were OK. Since there was no way that I was going to work for the other group under any circumstances for a variety of reason, I was OK with that. Also I had a legal opinion that the way it was written was invalid (there had been a legal opinion a year before that invalidated the way they did it). His opinion was that they had not updated their language.

I used it to leverage more CME money. I presented changes of more CME and getting rid of the non-compete then accepted the non-compete while getting more CME money. If the exclusion had been broader then it probably would have been a deal breaker.

David Carpenter, PA-C