The following post is part of a series on physician contracts
Non-competes are restrictive clauses that are found within many physician contracts. Unfortunately, they can drastically impact where a doctor is able to work and how they practice medicine. Before you sign any contract, look to see if it contains a non-compete clause and make sure you understand all the nuances around it.
What are non-compete clauses? Non competes are stipulations in contracts that prevent you from “competing” with your current employer by working for one of their competitors if you were to leave your job. They prevent you from working for a competing organization or health system within a certain radius for a particular time frame to prevent you from taking away any business form your current employer. For example, if you are a psychiatrist who decides to work for a large health system, the non-compete clause in your contract may state that if you leave your current job then you cannot practice psychiatry within a 20-mile radius of that employer for the first 2 years after you leave.
Why do they exist? Non-competes exist because employers have discovered that many patients like their doctors. In fact, patients tend to be more attached to their doctor than to the health center or clinic that they go to. Because of this, if patients find out that their doctor is leaving the current practice or hospital to work at another location nearby, the patient may follow the doctor to his or her new location. Health centers and hospitals don’t want to lose patients, so many of them put terms in place, like a non-compete clause, to prevent doctors from leaving the practice, taking patients with them, and becoming their direct competitors.
Why don’t doctors like them? It is rare for a doctor to work at one place for the entirety of their career. They may want to switch jobs for an increase in pay, more work/life balance, a change in family priorities, a job promotion, etc. Non-compete clauses restrict this. If a physician is already settled in a city that they love, non-competes clauses may require them to move to an entirely different location in order to continue to practice their specialty. If a non-compete states they can’t work within a certain radius for a certain length of a time, then a physician may not be able to take a better job in the same city and may be forced to move away or have a long work commute in order to avoid being sued for violating this clause. Many doctors feel as though non-compete clauses keep them stuck in jobs they may not like, getting paid less than they are worth.
What can doctors do to change it? Many doctors have encouraged others to refuse to sign contracts that contain non-compete clauses. They argue that no other profession tends to have this sort of restrictive language in its contracts and believe if physicians collectively refused to sign contracts with these clauses then the clauses would be removed entirely. Other doctors disagree. They feel as though trying to eliminate noncompete clauses altogether is a lost cause and instead encourage doctors to negotiate better terms. They suggest shortening the length of time in the non-competes, lessening the radius, or having the clause eliminated altogether for doctors who have not yet built up their patient practice or who have worked for their employer for a certain length of time.
My point? Be aware that non-competes clauses exist and try to eliminate them out of your future contract. If you cannot remove the non-compete clause, then be sure to negotiate more favorable terms.