Each state is different in how they legislate non-compete and contractual restrictions or employment for physicians and any professionals.
Non-Competes for Physicians
Physicians are different. If you are referring your patients or if you’re doing some contractual work, your practice has access to patient records, hospital records, and the records of other physicians’ offices. There are a lot of practices that don’t even see patients directly such as laboratories.
The difference in a non-compete for a medical provider is that the restrictions that they may agree to will limit their ability to practice if the market is small.
Non-Competes In A Larger Market
If you’re in a large market with more people, there would be more opportunities. Thus, you’ll want or expect less of a restriction.
For example, I had a physician as a client who was in a practice that he was leaving to start his own practice. He worked in two of his employer’s eight offices. The offices spanned about 100 miles. Consequently, he was restricted from working anywhere within 100 miles.
We went through his records and billing for the previous two years. What we saw was about 95% of his patients were within about a 10-mile radius of the two offices he worked at. We also looked through the records and noticed that of the patients he saw, they did not live within 10 miles of where his new office or the new practice he was going to start.
We agreed to not accept these former patients but to refer them back to his former employer’s office. He would not advertise or market to these patients, but he was able to market in the location of the other six offices, including any patients that had visited the other six offices.
We were able to prove that the non-compete was not enforceable in the areas of the other six offices because he had not seen any of these patients, who had never been under his care. Therefore, he did not establish any kind of doctor-patient relationship. Of course, he was not allowed to take a list of patients. But his employer did agree they would not restrict his opening up an office or joining with another office of a competitor near the other six offices outside of the 10-mile radius.
The Effect Of The Biden Administration’s Policy To Raise The Minimum Wage
President Biden’s policies have raised the minimum wage. Any political influence to increase wages will impact you because most physician practices are still small businesses with under 50 employees.
As far as working for a large practice or hospital, any administrative policies which not only increase the minimum wage but increase or demand that employers pay for healthcare will have a direct impact. Therefore, if you’re leaving a practice to join a hospital, you may not see a whole lot of change as an individual employee.
But if you’re striking out on your own, you would definitely benefit from being aware that there is a minimum wage law in several states, counties, and cities throughout the U.S. And that increase has increased physician office costs. The increase in minimum wages also affects the level of skilled workers and who competes for those jobs.
For instance, if the minimum wage goes up to $15 from $10 an hour, you’re not just competing for employees who are willing to work for $15 an hour, you’re also competing against all employers that were previously willing to pay $15 an hour rather the $10. You are then paying more for the same skill level. But you’re now competing with premium employers whose employees can now compare what you have to offer to what other employers have to offer.
Thus, minimum wage increases affect employers by increasing salary costs as well as competition for skilled employees.
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