Understanding a Dental Non Compete Clause | Dentist Long-Term Agreement Impact
Competition in the dentistry field keeps getting stronger by the day. As a practitioner, you’ve undoubtedly heard about dental non-compete agreements. But have you ever sought to find out what they’re all about and how they affect you?
Thanks to the growth of multi-location, low-cost dental facilities, smaller practices that provide procedures such as teeth whitening may find it challenging to stay profitable. For this reason, your employer may insert a non-compete clause in your employment contract to protect their business from the potential competition and offset the professional benefits offered.
If you’re a dentist about to take on a new job and the employment contract has a non-compete clause, it’s best to work with an experienced dental contract lawyer. This protects your rights once you start the new job and decide to move on afterward.
What Are the Basics of Dental Non-Compete Agreements?
A dental non-compete agreement is a clause in the employment contract that prohibits the restricted party (you) from providing services similar to what the non-restricted party (your employer) provides. Although these clauses are prevalent in employment contracts, they’re also common in contracts to purchase existing dental practices.
A non-compete clause may restrict your actions by actions, clients, or location. For instance, it may prevent you from opening a practice within five miles of your employer or prohibit you from soliciting patients from your employer’s client list.
Non-compete clauses are particularly suited for specialized dental practices. They prevent specialists from joining a dental office and working for only a short time before leaving to open a new office using the skills gained at the initial practice. It also keeps dentists from leaving a dental practice and leaving with all the current office staff and specialists.
Who Does a Dental Non-Compete Clause Benefit?
Dental non-compete clauses typically benefit the dentist who stays in the practice when another dentist leaves. When these agreements get enforced, the remaining dentists benefit in the following ways:
- They won’t lose customers and income if a dentist in their office leaves and opens a facility nearby. That’s particularly true for specialty facilities that may not have many patients to serve within a locality.
- They don’t have to worry about losing their office staff since they can’t get poached by the dentist who decides to leave and open a new facility.
- They’ll know whoever joins their facility does so to work and enhance their skills and job experience rather than potentially stealing their staff and clients.
How Long Do Dental Non-Compete Agreements Last?
Although people consider non-competition clauses in employment contracts as trade restraints, the agreements are enforced based on reason. Thus, the agreements only get enforced for as long as it’s reasonable.
So, working with a dental contract attorney is always a good idea since it helps you determine the specific non-compete laws for your state. Generally, one can consider a non-compete agreement reasonable and enforceable if:
- It isn’t more than what’s required to protect the employer.
- It doesn’t inflict untold hardship on either the employer or dentist.
- The restraint doesn’t affect the public.
Exceptions to Non-Compete Agreements
Dental non-compete agreements are not applicable everywhere. In states such as Ohio, a dental non-compete clause doesn’t apply if a practitioner’s expertise is essential to the general public’s well-being. Nonetheless, it’s still enforceable if it partially protects the employer’s legitimate interests.
A dental contract attorney can help you review a non-compete agreement before appending your signature. This way, you’ll avoid legal problems later on, especially when you decide to open a dental facility. There is also a need to consider potential dental malpractice issues.
Signing a Non-Compete Clause: Things to Consider
When reviewing your employment contract and the non-compete clause therein, you should consider the following:
The Geographical Location Covered
A big city can support more dental practices in a smaller areas than rural towns. If you get employed in a specialty dental clinic, your employer will likely enforce a non-compete clause in a larger area than a general dental facility.
The Agreement’s Time-Frame
It’s best to evaluate how long the agreement will apply and determine its impact on your career progression. For instance, will the agreement bar you from pursuing your dreams if you’ve always wanted to work in your hometown after getting employed in a dental facility operating within the same town?
Circumstances that Negate the Agreement
Will the non-compete clause apply if your employer sells their practice, relocates, or closes the shop? Do such circumstances negate the non-competition clause in your employment contract?
Working for a Competing Dental Facility
When dentists decide to leave a facility, they don’t always open their own practices. Many join forces with a competing dental facility, often within the same locality. For this reason, it’s best to ensure your non-compete agreement addresses such circumstances.
What does the non-compete agreement stipulate if you decide to join a facility that competes directly with your employer rather than opening your own facility? Typically, employers don’t feel too happy when employees leave to join competing dental practices. Ensuring that such scenarios get captured in your employment contract’s non-compete clause helps you avoid legal issues.
Why You Need a Dental Employment Contract Lawyer
Contracts are an obligatory aspect of nearly all legal transactions, including employment. A well-drafted dental employment contract containing the necessary non-compete clauses can help to highlight the responsibilities of all the affected parties and protect their legal rights. Nonetheless, reviewing an employment contract is a painstaking experience, given your limited legal expertise.
It’s a no-brainer that you should only enter a contract after it gets reviewed by a skilled dental contract lawyer. At Chelle Law, we have hands-on experience drafting and reviewing employment contracts in all medical specialties. In particular, dentists getting into employment can benefit from our thorough review of dental non-compete agreements.
We understand just how binding a non-compete agreement is. Thus we’re committed to helping you make an informed decision before signing an employment contract that will affect your career in the long run. Contact us today for assistance in contract reviews or learn more about our services.
Other Blogs of Interest
- Dental Non Compete Mile Radius Explained
- In a Dental Practice, is 10 Miles a Reasonable Non Compete for a Dentist?
- Can You Break a Dentist Contract?
Dental Non Compete Time Limits Explained | Is 2 Years Fair for a Dentist?
Is a two-year non-compete too long for a dentist? First, if you are either a dental associate or maybe you’re a partner, you’re still likely going to have a non-compete. And so, if you sign an employment agreement, there’s going to be a section in there that’s called restrictive covenants. The restrictive covenants essentially prohibit you from either doing things during or after the agreement ends. Standard restrictive covenants would be like a non-solicitation agreement, a non-compete, non-disparagement, and confidentiality clause.
Understanding Non-Compete for a Dentist
As far as non-compete goes, a non-compete will then prohibit the dentist from working within a specific time, within a certain geographic region from the location that they’re practicing in. Let’s just give some examples. Let’s just say your non-compete is for one year and then 15 miles from your primary practice location. For the most part, that would be considered a reasonable non-compete.
Non-compete laws do vary from state to state. It’s one of the only things in employment contracts for dentists that kind of varies from state to state. Some states absolutely prohibit it, meaning it’s illegal to have non-compete for a healthcare provider in that state. There’s only a handful of those. Most states do acknowledge non-compete if they’re reasonable.
Is a 2-Year Non-Compete Too Long for Dentists?
Is a two-year non-compete reasonable? I would say no. Ideally, it would be one year and no more than that. However, there are plenty of places that try to push it to two. In a scenario where they’re offering two or even beyond, you need to push back and say, I don’t want to sign more than a one-year non-compete.
Two Things to Consider Regarding the Non-Compete
And then two other things you need to think about as far as the non-compete. First, the location is listed. As you know, big conglomerates are gobbling up these dentist-owned practices. And so, you could be in a city where there are eight locations for your employer. You want to make sure that it specifically says your location or maybe the two locations where you spend most of your time. You don’t want to sign a non-compete that states that it attaches to every single location owned by the employer, even if you never worked in those locations at all. This is especially true for dentistry.
If you’re in private practice, dentist-owned, and they only have one location, then it’s simple. It’s just going to be that location and nowhere else. But, if you’re in a big city and they own a bunch of locations, you want to make sure it specifically states your location, not all the locations.
And then also, if you’re in a specialty, you don’t want to get stuck from not being able to do any kind of dentistry. You want it to say specifically what you’re doing for that employer. That way if you can do other things for the period, like let’s say you just can’t move because of kids or family reasons, you could have an alternative for a year. That might not be ideal, but you could do that for a year and then come back to your normal specialty. And so, you want to make it specifically not like all practice dentistry, but your specific focus as well.
Advice From a Lawyer: Non-Competes Are Enforceable
Non-competes are just a part of almost any employment contract. I’m not sure why most people think they’re just completely unenforceable. I get that a lot. Well, my colleague said that I could sign it, but it can’t be enforced anyway. That’s just not true. If it’s not in one of the states where it’s prohibited, it likely will be enforced if it’s reasonable. Now, if someone’s giving you a five-year non-compete that knocks you out of an entire state, clearly not going to be enforced, but you may have to litigate or go to arbitration if you’re going to fight that, or the employer is as well.
Can a Dentist Negotiate a Non-Compete?
This is certainly something you can negotiate. Most employers are going to say to you, well, we just can’t, we’re unable to change that, or no, I’m sorry, we can’t do that. There’s a difference between they don’t want to do it and they can’t do it. It would depend upon how much leverage the dentist has. Are you coming into a job opportunity that’s difficult to recruit to, or maybe in an undesirable location or maybe not as desirable for the general population?
You have more leverage if you’re going into a big city and there’s a ton of applicants for a job, and someone else doesn’t care at all about the non-compete. Well, then you have a decision to make whether you’re willing to accept it or not. If you have non-competes that are 50 miles from your location or even will knock out like contiguous counties, that’s something I would try to avoid. You really shouldn’t have more than 10 to 15 miles from your primary location. Or, as I said before, maybe you split your time in those two locations. So, that’s a little primer on non-competes for dentists.
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