Are dental associates independent contractors? In short, it depends upon what kind of agreement they sign. Any dental associate will be either an employee where you’ll sign an employment agreement. Or you’ll be an independent contractor where you’ll sign an independent contractor agreement. Let’s talk about the differences between the two. Well, first, if you sign an employment agreement, you will receive a W2. Taxes will be taken out, it’ll usually be provided benefits such as health, vision, dental, life, retirement, and disability. They’ll pay for your dental license, DEA registration, usually some amount for continuing education, and you’ll get paid time off. There are certainly benefits as far as ancillary benefits if you’re an employee versus an independent contractor. As an independent contractor, the dental associate will not be given any of those things.
So, they’ll have to pay for nearly all the benefits themselves. They’ll have to pay for their license, their own DEA. Professional liability insurance is one thing that many practices will pay for, even if it’s an independent contractor agreement. However, if it’s a claims-made policy, which it normally is, the dental associate would be on the hook for tail insurance. The benefit of an independent contractor agreement, or at least theoretically, is that it should be easy in and out. Meaning that either party can get out of the agreement quickly. I don’t find that’s usually the case. Most practices still include the negatives of an employment contract in an independent contractor agreement and don’t offer any benefits.
Can a Dental Assistant be an Independent Contractor
Dental assistants can work as independent contractors, allowing them greater flexibility and control over their professional lives. As an independent contractor, a dental assistant can set their own pay rate, choose the contracts they wish to accept, and manage their own work schedule. However, it is important to note that independent contractors are responsible for their own taxes, insurance, and other business-related expenses. Additionally, they may not receive the same benefits and protections as employees, such as health insurance, paid time off, or retirement contributions. Dental assistants considering this work arrangement should carefully weigh the advantages and disadvantages to determine if becoming an independent contractor aligns with their career goals and personal preferences.
Factors That Affect Dental Associate Employment Agreement When Contracts Are Completed
One of the main points I discuss with the dental associate about their contract. What are the things that will affect you after the contract finishes? Those would be: do you have to repay anything? Like signing bonus, relocation assistance, or any licensing fees. And if you leave within a certain period, do you have to pay those back? Second, who pays for tail insurance? As I said before, if it’s a claims-made policy, you need to purchase tail insurance, then who’s responsible for that? And then, more importantly, the restrictive covenants. Those will be the non-compete and the non-solicit.
A non-compete is, you can’t for a period, usually a year or two, work as a dental associate within a specific geographic region. Usually 5 to 10 miles from the practice location that you worked at, or maybe multiple practices. The independent contractor agreement, ideally, wouldn’t have any of those things in it, but I find that they usually do.
What Is the Benefit of a Dental Independent Contractor Agreement?
What is the benefit of an independent contractor agreement? Well, it depends upon the compensation. A dental associate would have to do the math. Alright, if they’re offering me an employment agreement, and the compensation is this. In contrast, if they’re offering me an independent contractor agreement, my compensation is this?
The reason why they’re different is if the employer doesn’t have to pay any of the benefits. Which usually could add up to thousands of dollars a year. Theoretically, the dental associates should make more under an independent contractor agreement. Suppose you receive the same compensation but are offered one versus the other. It doesn’t make sense to go the independent contractor route. You’re going to have the same restrictive covenants, you’re going to have the same compensation.
But then you’ll have to pay for all the expenses of being a dental associate. Now, you could form an LLC and then expense those as business expenses. But still, it’ll likely be more expensive for you to get your health, vision, dental, life coverage, etc. than if you went through a group plan with an employer. Now, most dental associates, honestly, don’t have the option. I mean, most practices aren’t going to say, “Okay, you can be an employee or independent contractor. I don’t care. It’s up to you.” Most of the time, you’re just going to figure out what they are offering. And then what are my alternatives elsewhere? If I were a dental associate, the employees’ route would probably make the most sense, at least at first.
Volume-Dependent Independent Contractor Agreements
A lot of the independent contractor agreements are kind of volume-dependent. Maybe you’ll get a daily rate, but perhaps it’ll be based on your collections, your encounters. And when you enter into a practice, they make it sound great, but the volume indeed cannot. I don’t want to say usually, but many times it’s not what they told you during the interview process. If you’re being paid purely on productivity and the volume’s not there, it’s a problem.
And if you decide, alright, this isn’t working out, and you leave. Well, you still have all those negative things I mentioned. The restrictive covenants, paying back the bonuses, the tail insurance, etc. So, is one better than another? It depends on the situation, but as a dental associate, you need to think, well, which one best suits me? And if it’s the same terms for both, it doesn’t make sense to be an independent contractor. The main reason why employers do this is so they can avoid paying employment tax. I mean, they’re not going to say that, but that’s at least I find why most of them do it.
Other Blogs of Interest
- Are Dentists Usually Self Employed?
- How Long Are Most Dental Associate Contracts?
- What Should be in a Dental Associate Termination Letter?
Dentist Independent Contractor vs. Employee
What are the differences between employees versus being independent contractors as a dentist? First, if you’re an employee, this is the most common way of having an employment relationship with the dental practice. In addition, You’ll receive a W2, so they’ll withhold taxes from your compensation. You’ll usually be paid weekly or biweekly at the end of the year when you file your tax returns. You don’t have to worry about paying all the taxes because they’ve already been withheld. The practice will also cover your dental license, DEA registration, and dental malpractice premiums.
They may pay for your tail insurance if you have a claims-made policy. Then they’ll offer health, vision, dental, disability, life, and retirement, they’ll usually pay for your continuing education. And you’ll get paid time off. So, all the great ancillary benefits that come with being an employee, they will get if they signed the agreement.
If You Are an Independent Contractor
Now, if the employer asks. Or maybe they have the option of being an independent contractor. They will not receive W2 at the end of the year. Furthermore, the employer will not withhold taxes from their compensation, and they’ll get 1099 at the end of the year. And then the dental associate will be responsible for paying for all the taxes the employer should have withheld. And they could do that either quarterly or at the end of the year. They will also not receive any of the benefits that I listed before. So, they will not get their license and DEA paid for. They will have none of the health, vision, dental, disability, life, or retirement.
They won’t get paid time off; they’ll have to pay for their CE. They will be responsible for paying for all of that stuff themselves. Now, if you are a smart dental associate and you are going to work as an independent contractor. Moreover, you need to meet with an accountant. You also need to set up an LLC, get an EIN, and set up a bank account. And then you can run all the compensation through that and deduct most of those things as business expenses. For the most part, all the stuff I just listed can then be deducted. Now, what’s the ultimate difference?
What Are the Responsibilities of a Dentist as an Independent Contractor?
If you’re working as an independent contractor and have set up an LLC, you must get all those things yourself. You have to be responsible for finding all those things. So, you must get health, insurance, vision, dental, disability, and life and set up a retirement plan. You’re going to have to do all that yourself. And then you’ll pay for all your DEA, license, and CE, and then you’ll get no paid time off.
For some dental associates, after kind of doing a math equation, they can come out ahead as an independent contractors. Then it just makes sense for them. They have no problem doing all those things. Others just loathe having to worry about those things on their own. They just want to work as an employee and have the employer deal with all that stuff. And then ultimately work normally for dental associates. Just a normal nine to five, and on the weekends, maybe a little after-hours emergency call.
But for the most part, it’s much simpler to work as employees versus independent contractors. In what situations does it make sense to be independent contractors? Well, maybe if you’re just working part-time. If you’re only working for a dental practice for a day or two, a week, or even shorter. It’s up to the dentist when they work and how much they work. In that scenario, it probably makes sense to be an independent contractor.
Employees vs Independent Contractors
If you’re working a nine to five job at the same practice every day, you’re working with the same staff. Besides, they’re paying for all or at least some things, but they want you to be an independent contract worker. They usually do that to avoid paying employment taxes. That’s the reality. You’re not an independent contractor in that situation. You’re probably one of the dental employees.
The IRS lists or at least releases a 20-factor test to determine whether people are employees or independent contractors. I would suggest Googling that. And if you’re concerned, they’re asking me to be an independent contractor, but I’m not entirely sure. Just go through the list and see if it applies to you or not, with how many factors. And then maybe discuss with the employer. “Well, I don’t feel comfortable moving forward as an independent contractor dentist, I’d prefer to be an employee.”
Then you can decide if you want to stay with them or if they’re willing to offer you an agreement. It just depends upon the situation. As I said before, nine times out of 10, a dentist will be an employee, not an independent contractor. But there are certain times when it would just make sense financially to be a dentist independent contractor.
Independent Contractor 1099 Dentist
What is a 1099 dentist? There are two ways you can work for a dental practice. It’s either as an employee, where you’d receive a W2 and taxes are withheld. Or you’d be an independent contract worker, and then you would receive a 1099 at the end of the year. No taxes are withheld from it. You would just receive all the compensation that you agreed to. And then, the dentist would be responsible for paying taxes quarterly or at the end of the year. If the dentist is an independent contractor, what are some of the benefits and disadvantages of that?
The Pros and Cons of Working as an Independent Contractor
The advantages are you can deduct almost all of the business expenses that would go into working as a dentist. So, mileage, car expenses, cell phone, supplies, malpractice insurance, you can depreciate assets, licensure, DEA registration. Normally, a dentist would create an LLC, they’d make a bank account, they’d get an EIN, and would then run everything through that. All the expenses would go through that. All the compensation would go through that. And then you just take draws when you want to use the money for yourself. There are situations where it doesn’t make sense to be an independent contractor.
As an employee, you get all of the ancillary benefits that come with it, like health, vision, dental, disability, life, and retirement. They will pay for your dental license, DEA registration, continuing education, and dental malpractice premium. Maybe if you have a claims-made policy, they’ll also pay for your tail insurance. They’re going to pay for many things and make it relatively easy for the dental associate to opt into those things.
You need those things if you’re an independent contract worker and aren’t an employee anywhere. You are going to be responsible for securing them for yourself. And then some dental associates simply don’t want to do that or are just uninterested in spending all the time creating the LLC and running it as a business and that type of thing.
Different Perspectives on Working as an Independent Contractor
Some people love to have the freedom of being an independent contractor. However, many others find it completely cumbersome and not worth their time. Is one better than another? It would depend upon the situation. Ideally, an independent contractor would likely work part-time or at least at their own pace. This means they could work as much or as little as they want if they worked it out with the dental practice.
As an employee, most dental associates they’re paid a straight base salary, or they would receive a percentage of their net-collections. Daily rates are very common for oral health dental associates as well. And then employers would take all the taxes out of that. And then, as I said before, they would pay for everything necessary to be a dental associate. If you have a complete schedule, and you’re working nine to five, Monday through Friday, you may have a few call responsibilities for emergency after-hour situations. It wouldn’t make much sense to be an independent contract worker in that scenario.
Practice Employee Misclassification
If the employer is asking you to do that, I think it’s most likely that they just don’t want to pay employment tax. And they’re passing that on to the dental associate. So, if you have no control over your schedule, if you have no control over the supplies, the staff, or any of that kind of thing. You’re likely an employee or a quasi-employee. The IRS releases a 20-factor test that kind of goes through, alright, well, if this is part of the employment relationship, you’re probably an employee, or if this is part of it, you’re probably an independent contractor.
If you just Google like a 20-factor IRS test, you can come up, and you could just look and say, alright, well, does this fit what they’re asking me to do? And then, am I an independent contractor in this situation? I mean, the government can, though this would rarely happen. For instance, they could come back and say, look, they were not an independent contractor. They were an employee. And then they could go after back taxes against the employer. I don’t have an opinion on what is better if you choose between one or the other; you rarely would. Usually, the dental practice is going to dictate what type of employment relationship exists. I think it’s situationally dependent.
If you’re thinking of working as an independent contractor, I would implore you to meet with an accountant and set everything up properly. I don’t think a tax attorney is necessary for this. So, just meet with an accountant, tell them what you need to do, set up the LLC, and get everything together so you can ultimately maximize your tax deductions and compensation.
Tax Deductions for Dental Employees Working as an Independent Contractor
What tax deductions can dental associates take when they are independent contractors? Suppose you are an independent contractor or someone presents you with an independent contractor opportunity at the end of the year. In that case, you’ll receive 1099, and the employer will take no taxes out of the compensation. You will not get a W2, and then you will be responsible for paying those taxes quarterly or at the end of the year.
If you are considering being an independent contractor and haven’t before, what are some things you need to consider? And then what are the possible tax advantages of doing that? First, I’m not a tax attorney, I’m an employment contract law attorney. So, I’m going to give you kind of the bare-bones knowledge that I have based on drafting and reviewing independent contractor agreements for the last couple of decades. But I would suggest if you are thinking of beginning as a first-time independent contractor, you should talk to an accountant, I’m not sure a tax law attorney is necessary. And then you would set up an LLC, a bank account, and then run everything through that. But they can kind of walk you through the tax advantages as far as setting that up.
Tax Deductions for a 1099 Independent Contractor
As I said before, if you are a 1099 independent contractor, you would essentially associate yourself with your own little corporation business. So, you’d set up a limited liability company/corporation, and then you would get your own federal tax ID number, you would set up your bank account, and then you’d run all the compensation through that. All the business expenses would go out of that as well. And then you would be able to deduct those things at the end of the year. I’m going to go through a list of things you can deduct briefly, and then we’ll talk about why an independent contractor arrangement might not make the most sense.
First, you can deduct mileage, health insurance premiums, home office deductions, work supplies, travel, car expenses, and cell phones. In this case, be either business or malpractice insurance, and you can depreciate the assets. You can deduct all the things that would go into working as a dental associate in that situation. Now, if you’re just coming into the practice to work a few times a week, they will pay you as an independent contractor. Accordingly, you’re not going to be able to deduct the supplies they give you, or if the practice somehow decides to pay for your annual malpractice premiums, you couldn’t do that either.
How to Negotiate a Dental Associate Contract
How should you negotiate an associate contract? I’ll give some tips and tricks to get a better contract. There’s a difference between negotiating a contract with somebody just out of training versus someone already established in a community. You have more leverage if either a corporate practice or another group is bringing out your practice. Or wants you to join them. And you have an established patient base. Suppose you’re coming out of training. What do you need to do to put yourself in the best position to negotiate a contract?
For most dentists, the most important things are salary. Is it a base salary? A daily rate? Is it a net collection? How do you terminate the contract? Can you get out of it with a certain amount of notice or the benefits? Are they paying for your license, DEA registration, credentialing, or continuing education, and are there signing bonuses and relocation assistance? Will you be paying them back if you leave within a certain time? Probably the two highest priorities are: who’s paying malpractice insurance. And who must be paying for tail insurance after the contract terminates if it’s a claims-made policy.
Also the non-compete. This is some people’s absolute, most important thing in the contract. If they’re tied to a community, kids in school, or family, they absolutely can’t leave. Then you need a reasonable non-compete that’s not going to make you move entirely out of the area.
Know The Average Pay in Practice
Those are the most important things to dental associates. Now, you’re coming on training, you have a position offer, they’re giving you a certain financial amount. How do you know what’s reasonable? Talking to your classmates is the best way to find that information. What offers are they getting? How much are they getting and how are they structured? Where do offers come from? That’s the best and most accurate means of finding out what the going rate is at that time. The compensation is going to vary wildly. Is it a base salary? Is it a daily rate? Or is there some net collection involved? Or is it a hybrid? And could it be half base, half net-collections.
Other Things to Consider Beyond Compensation
Often, dental compensation for a job may look great, but the benefits are inadequate. They’re not paying for your tail insurance, or the non-compete is terrible. So, you can’t just take a salary as the number one factor in determining a good opportunity. But it is undoubtedly vital. Knowing whether a non-compete is fair or not is something you probably must talk to a professional about.
Mostly, anywhere between one to two years and 5 to 15 miles from your primary practice location would be reasonable. If you’re in a non-compete that’s more than two years, or it knocks out like multiple counties. Or maybe they’ve attached the non-compete radius to 10 locations. Say, it’s a corporate practice in a big city having 10 locations. And they’re saying, well, you can’t work within 10 miles of every site we own. That’s not a reasonable non-compete.
The actual negotiation will depend on two things. One, do they give you an offer letter, or do they give you the employment agreement? If they give you an offer letter, they expect those terms will be negotiated in advance. Then incorporated into the employment agreement. And then, they’re going to give you the employment agreement. Sometimes it’s challenging to come to terms with the main parts of an offer letter without seeing the full employment agreement. If I had a perfect scenario, there would be no offer letter. They would give the employment agreement.
Then you’d completely understand what the work entails and the expectations for both parties. You could agree to a salary, the length of term, that there’s a non-compete, that’s the things they’ll pay for. But when you see the specific language in the contract, it could significantly change the way you look at its value.
You Can Negotiate The Contract Even After Signing the Offer Letter
Just because you’ve signed an offer letter doesn’t mean you can’t renegotiate if you provide proper context to the employer. Alright, I was okay with making $110,000 a year and a base salary. Not knowing the non-compete effectively knocks me out of this state. If you want me to sign this dental contract with that non-compete, I need 130,000. There are many ways of going back and forth. Some employers will just say, this is a take-it or leave-it. I would be wary of signing a contract with an organization unwilling to make any changes in the agreement.
It usually means they’re difficult to work with down the road or have a very rigid and unprofessional environment. So, if you find that someone says, take it or leave it, I would leave it and move on. And try to find a better opportunity. I’m just telling you. If they take the mindset that they’re not going to change anything in the contract, like nothing at all. No change at signing bonus, relocation assistance, benefits, anything like that. It is a bad sign moving forward.
Top Tip: Check the Without Cause Termination
One more thing to keep in mind when signing a dental contract or negotiating the terms of an agreement. Every employment contract should have what’s called without-cause termination. Either party should be able to terminate the agreement at any time with a certain amount of notice to the other. Usually, somewhere between 30 to 90 days.
If your contract doesn’t have without-cause termination. It means you must fulfill the entire initial term of the agreement somewhere between one to three years. Normally, it is an enormous red flag. You absolutely should not sign that contract for this reason. Suppose they have excluded without-cause termination, which is standard across all healthcare professions. In that case, it usually means they’ve had a ton of turnover or very dissatisfied dental associates who wanted to leave. So, they’ve removed that ability and made sure they must stay there for three years, two years, etc.
Usually, it’s not in the contract because they’ve had a ton of turnover and it’s normally due to bad management. Either it’s a toxic work environment. Or the compensation is not worth the amount of period or effort you’ve, you’ve had to put into it. It makes sense that there’s always without-cause termination in the employment agreement.
Talk to Dental Associate Contract Lawyers
Don’t feel bad about asking for things. If you’re negotiating the terms of employment, most smart employers expect there will be some back and forth. Ask for a little more salary, a little more bonus, and a little less non-compete radius. Incremental things you can get changed in the agreement can make a big change in the value of an opportunity. So, don’t feel bad.
Now, if they’re offering a hundred and you ask for 300 or some crazy amount. They’ll think you have no idea what’s going on. They’ll probably move on. When you ask for something, it needs to be reasonable. How do you find out what’s reasonable or not? Once again, talk to your classmates, any mentors, or attorneys who understand what they’re doing. Those dealing with these contracts every day. That’s where you need to get in. But if you ask for these ridiculous changes to an agreement, most places will pull the offer and say no. So, that’s how you negotiate an associate contract.
Dental Associate Non-Compete vs Non-Solicit: Solicitation Concerns for Dentists
Non-solicitation clauses versus non-compete clauses for dental associates. What’s the difference? What’s the similarities? And what is typical in a dental employment agreement? Let’s start with non-solicitation clauses. This prohibits soliciting patients, employees, or third-party contractors for a specific period after the contract terminates with your dental practice. What this looks like is they either terminate you, or you terminate your employment with the dental practice, and you leave. A non-solicitation clause states that for a period, typically one to two years, you are prohibited from reaching back out to those employees of the dental practice. Or to the patients to whom you had provided dental services while you were an employee. Solicitation, sometimes, is defined in the dental employment agreement itself. It may say you’re prohibited from directly soliciting or indirectly soliciting.
Associate Dentists Can Have Restrictive Agreements
If you see a language like that, it’s important to see within the employment agreement if it’s defined; if it’s not, it’s customary that you should reach back out to that prospective employer and ask them to define those terms for you. And to me, directly soliciting means typically reaching out to entice and encourage those employees or patients to come with you. Now, if you’re leaving the dental practice and a patient or an employee asks, where are you going? You can tell them. That’s not a solicitation. Solicitation is when you are the one who initiates the contact, you’re reaching out, you’re trying to poach those employees and those patients; that’s when you would violate a non-solicitation clause.
Let’s talk about general advertisements concerning a non-solicitation clause. Sometimes, the employment agreement directly outlines this, and it’s always best to start there first, looking at the clause itself. But if it just says you cannot solicit, normally, general advertising is not considered a solicitation. So, that’s a billboard, social media advocacy, news, and things like that, not a solicitation. You would only be in danger of violating a non-solicitation clause when you reach out directly to those patients and employees. What this looks like is maybe you are sending employees or clients lists. Likewise, you’re getting their addresses and sending letters directly to them, or you’re seeking them out directly, things like that would be a solicitation.
What Are the Consequences of a Non-solicitation Clause?
What are the consequences of a non-solicitation clause? Sometimes there are liquidated damages. You may have to pay tens of thousands of dollars if they find you in violation. And then usually, I would say there is equitable relief. And what that looks like is if the dental practice feels like you violate their non-solicitation clause, they can bring it before a judge. What they would do is they would declare an injunction, or they may sign something like a restraining order simply stating that you cannot solicit those employees/clients. That’s typically what a non-solicitation clause looks like. They’re standard. Now, let’s look at and talk about a non-compete clause. A non-compete clause is like a non-solicitation clause because it’s a promise not to do something; you promise not to compete with a dental practice.
Also, a non-compete clause is typically for the same period as the non-solicitation clause. So anywhere between six months to two years. The non-compete clause is also going to have a restricted area. This could be miles, it could be city blocks, it could be counties, or it could be municipalities. It just kind of depends on your classification, what state you’re in, and are you in rural or are you in the city? If you’re in New York City, I always use this example. You wouldn’t use miles for a restricted area in a non-compete clause. You would likely use city blocks.
Enforcement of Non-Compete and Non-Solicitation
We’ve talked about a non-solicitation clause and a non-compete clause. Again, with the non-compete clause, another similarity is how it’s enforced. So again, there could be a liquidated damage clause. Which would state that if the employer finds you violating the non-compete clause, you could pay tens of thousands of dollars. Also, there’s equitable relief, meaning the dental practice would go before a judge. They would ask for an injunction or a temporary restraining order. Which again is a piece of paper that states you cannot compete in that restricted area. Non-compete clauses can be a little bit more complicated than non-solicitation clauses. And what I mean by that is a non-compete can attach to multiple locations.
It could be your primary place where you provide services. Also, it could be any location where you provide services, or it could be any location that’s owned and operated by the practice. So again, the golden rule is that you always want to refer to your employment agreement to ensure you fully understand what you’re signing. Otherwise, this could have big implications in the future after your employment terminates. Also, another similarity, non-solicitation clauses, and non-compete clauses are typically found in the same part of the contract under the restrictive covenants. Restrictive covenants just mean a promise not to do something. You’re promising not to compete with a dental practice, or you’re promising not to solicit.
Is a Non-Compete Enforceable Against a Dentist?
Is a non-compete enforceable against a dental associate? First, there are a handful of states in the United States where non-competes are completely unenforceable. However, you could count them on one hand. It is very likely if you’re reading this blog, the state you’re in does acknowledge reasonable and enforceable non-competes. So, I’m just going to talk about the states where they are enforceable and what they would consider whether it’s reasonable or enforceable. In your dental contract, there will be a section called restrictive covenants. And that section will have a non-solicitation clause, a non-disparagement clause, confidentiality provisions, and then a non-compete.
What Is Non-compete?
And a non-compete simply stops you from working in your specialty for a period within a specific geographic area. What would be considered reasonable for all those things? First, it will likely list what you can’t do. And for the most part, it will say the practice of dentistry. If you have some kind of a multi-specialty dental practice and you can do different things, and you’re only doing one of those things for the employer, I would make sure that the specialty restricted is the one you’re only doing for that employer. That way, you have other options after the contract ends to do other things.
For instance, maybe you’re doing orthodontics for a dental practice, and you could still do general dentistry. Maybe it’s a year-long non-compete, and you don’t want to move; you could at least do general dentistry for a year and then hop back to do orthodontics after the year ends. That’s a little bit into what is listed as a specialty in the non-compete. As far as how long, most non-competes for a dental associate last somewhere between one to two years. I think it would likely be unenforceable if it’s longer than that. You always want a shorter non-compete. If someone is offering you a non-compete that’s three years or five years, that’s completely unacceptable and very likely unenforceable.
Geographic Restriction of the Non-Compete
Regarding the geographic limitation, that’s kind of for the, I guess the negotiation usually turns to, so as these corporate dental practices continue to gobble up these dentist-owned practices, they continue to multiply. In a city, they may have multiple locations. In a big city, there are dozens of locations. If the non-compete states you can’t work within, let’s just say 10 miles of every location of the employer, and they have 10 locations in your city. It could effectively knock you out of practice in that city, which I don’t believe would be considered reasonable and would likely be unenforceable. You want to make sure when it comes to how many locations the non-compete attaches to. It’s only ideally the locations you’re working at and then no more than two locations.
If it were just 10 to 15 miles from your primary dental practice location, that would also be considered reasonable and enforceable. Let’s say you signed a non-compete, and then you think, alright, they’re not going after me, I’m just going to break it anyway. And then you establish dental practice within the geographically limited area. What can happen? Well, they can sue you. If your contract has an arbitration clause, they could go to arbitration over it. They could go to court and obtain a temporary restraining order or an injunction, which would stop them from working. They could sue you for, one, breaching the contract law, and two, the damages associated with you establishing a practice within that area.
Lawyer’s Advice Regarding Signing an Employment Contract with Non-Compete
So, I would not suggest signing a dental agreement with a non-compete and expecting to ignore it. I think that’s a shortsighted way of thinking about contract law and a terrible strategy. I’m surprised how many dentists I speak to say, ” Oh, I spoke to a colleague, and they say non-competes are totally unenforceable. Unless you’re in the state where they are, I would not sign anything just saying, well, I’ll sign it, but I expect they can’t enforce it down the road.
So, non-competes are very likely enforceable against a dental associate if they’re considered reasonable. And for some people, let’s say they have grown up in a city and want to move back, maybe they’re living there and have kids in school. And they cannot move, or there’s family there, for whatever reason. Having a very onerous non-compete can make a great job potentially terrible if you have to move from the city to practice for whatever the limited period is. That’s something you want to negotiate and take a hard look at. It can be a deal-breaker for some people.
Dental Contract Questions?
Contract Review, Termination Issues and more!