Breaking A Non-Compete Agreement With A Hospital Or Medical Group

For every doctor, the question of whether you can break your non-compete agreement will arise at some point during your medical career. Unfortunately, there is no simple answer. Each situation and non-compete will be unique, but to help determine your next steps, you can start by asking the following questions:

• What exactly is the non-compete?
• What is limiting it?
• What is it limiting you from doing?

The non-compete may just be the temporal element or the time. If it says that you can’t compete against them for six months up to two years, you may try to buy them out or try to negotiate some resolution to that limitation with your attorney. This is probably the most obvious way to get out of a non-compete agreement – because everybody knows if you aren’t working, you aren’t making money.

While you may be losing income for a duration of time, you may also be able to find other opportunities to work in a different area or locum tenens. Doctors are familiar with that kind of remote work until a non-compete is up. It is important to ask what your options are. Some other questions to ask are…

• Can you buy out your non-compete?
• Is there an exception that allows you to do some kind of work while your non-compete is still being enforced?

This may result in being able to work outside of your geography temporarily. Some doctors refer to this as moonlighting, from the earlier days of your career where you may have worked at a hospital or small practice until you found a job. These all remain viable options to you.

Most importantly, you need to look at the state and the regional laws that enforce the non-compete. These laws vary from state to state. You may be able to find some exceptions to a non-compete in your state that are not available in another state. The law changes from time to time and every state is different. Sometimes the law even varies whether you are in a rural area versus working in a city.

Buyout Option Of A Non-Compete

You will want to look at whether or not you could buy out your non-compete. Sometimes it is not an option and a non-compete will have provisions that punish the physician for leaving the practice.

When we look at a buyout option, we weigh the pros and cons of it by doing the simple financial math. Some things to consider in this equation are…

• The potential loss of income as a result of not working in that region,
• The potential income of working in that region for the same period of time, and
• The cost of the buyout.

If the potential income exceeds the cost of the buyout, it is worth looking into proposing a buyout. While a buyout might only be an option in 50% of non-compete agreements, you are always able to negotiate and offer when trying to leave a practice.

An experienced attorney will look at a non-compete as the value of the business interest that the employer is trying to protect, which is often closely related to the buyout price.

By law, judges and juries have to measure and weigh the legitimate business interest the employer is trying to protect against the enforceability of a non-compete. An attorney will help you get to that number in order to negotiate with your employer. It may not be easy, but you can ask for a buyout amount to weigh against the cost of not working (or the cost of how much money you would have made had you decided to take a job elsewhere in the meantime).

When Not To Resign And Wait Out Your Non-Compete

It is rarely recommended that anyone resign from their position and wait out a non-compete agreement. You give up certain rights when you resign, depending on your employer. Resigning contractually changes your ability to leverage different rights.

One of the main reasons why you should not resign is that it would limit your ability to make a claim for certain violations. If they violated the contract or any kind of public policy, you want to ensure that your rights to make a claim are preserved. Violations could include…

• Breach of contract,
• Failure to pay according to the contract, or
• Any failure of the employer to meet its obligations.

You may consider resignation in certain circumstances if your employer has failed to cure a complaint of a violation within a reasonable period of time. It is important to give adequate notice and complaint of the violation so that it is on record prior to any resignation.

It is strongly recommended that you meet with an attorney prior to your resignation. Discussing and understanding all of your options will put you in the most favorable position. Resigning does put you in a different legal position, so speaking to an attorney before making a decision is imperative.

You may be forced to resign. If your employer forces you out by cutting off your access and privileges, they put you in the position of having to resign because you were not able to work. That would be interpreted as being suspended or terminated, not as a resignation.

Until you have spoken with an attorney about your options, it is not advisable to provide any written notice to the employer. It is also not recommended that you speak with Human Resources or other personnel in the organization about your intention to resign. You could receive improper legal advice from people who are not in a position to advocate for you.

If you are a physician under contract, you need someone to review the contract and explain to you what your rights and options are and the consequences of resigning before you speak with anyone else about your resignation.

Before Leaving For A New Practice Or Starting Your Own Practice

There are many legal considerations when leaving a practice – whether you plan to join another practice or start your own. You want to make sure that you are thoroughly considering all of the factors that will impact your move.

Some questions to ask yourself before leaving the practice are:

• Do you understand all the legal ramifications of departing from that practice?
• Are you being terminated? Are you being terminated for cause or without cause?
• Are you going to resign?
• What are the different options for your departure under the contract?
• What are you going to do next?
• How much are you going to get paid for doing whatever it is you’re going to do next?
• How much is it going to cost if you can’t resolve this matter with your previous employer?

To go through these questions, you should always consider meeting with a legal advisor to discuss the best and worst-case scenarios.

For more information about Breaking A Non-Compete Agreement With A Hospital, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (813) 367-6874 today.