Restrictive Covenants

Abstract

Restrictive covenants, or non-compete clauses, are commonly found in many physician employment agreements and independent contractor agreements. When drafted correctly, restrictive covenants are enforceable in most states. They are meant to protect the practice that hires you from financial loss. The covenant seeks to prevent loss of patients from the practice if you should leave the practice but remain in the practice’s geographic service area. Nevertheless, restrictive covenants should be avoided by employed physicians, if possible, since they can produce considerable hardship, including financial loss. This chapter is intended to give you an overview of restrictive covenants, and strategies if your agreement includes such a provision.

Appendix 11.1: Resources

National Survey on Restrictive Covenants, Fox Rothschild, LLP

http://www.foxrothschild.com/uploadedfiles/practiceareas/securitiesfinancialinstitution /survey_nationalSurveyRestrictiveCovenants.pdf

Healthcare Mergers and Acquisitions: Physician Practices, Richard O. Jacobs

Aptheker, S and Penzer, R. Outside Counsel: Examining restrictive covenants in physicians’ contracts. New York Law Journal. 249:7. March 12, 2013.