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 contract ends. Standard restrictive covenants would be like a non-solicitation agreement, a non-compete, non-disparagement, and confidentiality clause.
What is 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 a Dentist?
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 With Regards to Dentist 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.
Other Blogs of Interest
- Is a 2 Year Non Compete Too Long for a Dentist?
- Is a W2 or 1099 Better for a Dentist?
- Dental Associate Non Compete vs Non Solicit
In a Dental Practice, is 10 Miles a Reasonable Non Compete for a Dentist?
Is 10 miles a reasonable non-compete for a dentist? If you are an employee and have an employment contract, that contract will likely include restrictive covenants. Restrictive covenants are things the dentist can’t do either during or after the contract is terminated. Common restrictive covenants include a non-disparagement clause, a non-solicitation agreement, confidentiality provisions, and a non-compete, which is usually the most important to most dentists. A non-compete says a dentist can’t work within their specialty for a certain period, within a geographic radius of wherever they’re working.
Non-Compete in Contract Agreement for Dental Practice
Let’s kind of break that down. The non-compete will list the dentist can’t practice as a dentist, or maybe they’re subspecialists in their subspecialty for a period. A typical period is going to be somewhere between one to two years. Ideally, it would be lower, meaning it should be no more than a year on the low end. If you see a non-compete that’s three or five years, one, it’s probably unenforceable, and two, it’s completely unreasonable. You should not accept that. No more than one to two years for the temporary restriction of any non-compete.
Regarding geographic restriction, this depends. Most non-competes will be somewhere between 5 to 15 miles from your primary practice location. The setting is important. A smaller radius will make sense if you’re in an urban environment and a big city. If you’re in a rural community, you may not have any other opportunities within 25 miles. Let’s take Phoenix, for example, where I live. Maricopa County is huge, but if it was 15 miles in the middle of Phoenix, it could knock out hundreds of opportunities. Whereas if you’re in rural Idaho, 15 miles could be that location and nothing else.
Geographic Restrictions in Non-Compete Agreements
The setting is important, especially with the current trend of all these corporate-owned practices gobbling up the dentist-owned practices. If you are in a city, you need to ensure that the non-compete doesn’t state, let’s say it’s a 10-mile geographic restriction, that it applies to your practice location or locations. Maybe if you’re at one or two of them and not every site, the practice owns.
Some corporate-owned practices own 10 to 15 locations in a city, say, it’s 10 miles from every location they own. When the dentist only worked in one location. And that’s not fair, not reasonable. Is that enforceable? I don’t know. You may have to litigate or go through arbitration to find out the answer to that. But that’s not something you want to accept in an employment contract. That kind of non-compete could essentially force you to move from a community.
For some people, that’s huge. If you’re from a town, kids go to school there, have family nearby, and have deep ties to a community. Some people cannot move when the contract ends. If they have a very demanding non-compete, it will be tough for that dentist to work for however long the non-compete is. So, if it’s 10 miles from one location, I would consider that a reasonable non-compete. If it’s 10 miles from 10 locations, that certainly is not.
The Secret to Contract Negotiation for New Employment
How to negotiate a non-compete? Well, simple. You just have to say, I would like a one-year non-compete and the geographic restriction only to be attached to the two locations where I generate most of my charges. That is if you’re working in multiple locations. If the employer is willing to change it, many of them will say, oh, well, I’m sorry, we can’t change it. Which is not true.
They can certainly change it; they don’t want to. But there is going to be a point where the dental associate will have to decide, alright, well, can I accept this, or should I move on to a different job opportunity? It’s going to depend upon your specific scenario. Still, non-competes can be a deal-breaker when we’re negotiating with an employer. To be honest, some of these corporate-owned practices will say it’s a take it or leave it offer. Now, you can find opportunities that couldn’t meet your needs. I find smaller dentist-owned practices are much more flexible as far as the non-compete goes versus the corporate-owned practices.
So, you may have better luck negotiating in that type of environment, but ultimately, it will depend on whether it’s important to you. Some people they’ll move to a community for a job. They have no plans to stay and say, alright, after this job ends, I’m moving on somewhere else. And in that scenario, you could focus your negotiation on different things. There must be a list of what’s important to you when negotiating a contract, right? And so, if the non-compete is the most important thing, you must focus on that. If the non-compete doesn’t matter to you, it’s not even worth bringing up. Anyway, that’s a bit of a primary on what’s a reasonable non-compete for a dentist.
Is a Non-Compete Enforceable Against a Dentist? | Dentist Non Competition Enforceability
Is a non-compete enforceable against a dentist? First, there are a handful of states in the United States where non-competes are completely unenforceable. However, you could count them on the one hand. It is very likely if you’re reading this blog, the state that you’re in does acknowledge reasonable and enforceable non-competes. So, I’m going to talk about the states where they are enforceable and what they would consider, whether it’s reasonable or enforceable. In your 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. And a non-compete stops you from working in your specialty for a period within a specific geographic area.
Does the Law Favor the Practice Over Dentists?
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. Suppose you have some multi-specialty practice, and you can do different things. Then, you’re only doing one of those things for the employer. I would make certain 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 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 dentist last between one and two years. If it’s longer, I think it would likely be unenforceable. 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.
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 say, 10 miles of every location of the employer. 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 certain how many locations the non compete attaches to. It’s only the locations you’re working at and then no more than two locations. Suppose it was just 10 to 15 miles from your primary practice location. That would be reasonable and enforceable as well. 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 practice within the geographically limited area. What can happen?
How to Enforce a Non-Compete Under an Employment Agreement?
Well, they can sue you. Suppose your contract has an arbitration clause. Then, 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, and two, the damages associated with you establishing a practice within that area. So, I would not suggest signing an 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 unenforceable. Unless you’re in the state where they are, I will not sign anything just saying, well, I’ll sign it, but I expect they can’t enforce it down the road.
So, yes, non-competes are very likely enforceable against a dentist if 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. They just absolutely cannot move, or there’s family there. For whatever reason, having a very demanding 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.
Red Flags in a Dentist Employment Contract
Dental associate contract agreements red flags. There are dozens of red flags in a dentist’s contract agreements. However, there are a handful necessary to take a solid look at, and we’ll go over those. The first thing would be no without-cause termination. In any dental associate employment contract agreement, there’s going to be a section called term, which means how long the contract is. And then termination, how people can terminate the dental contract.
Contracts can be terminated in several ways. The term could end, and it’s not renewed. Parties could terminate it by mutual agreement. Or for-cause. If one of the parties breaches the contract but doesn’t fix the breach, the other party generally has the option to terminate the contract immediately. And then the last and most important way is without-cause termination. This means that either party can terminate the agreement at any time with a certain amount of notice. Usually, it takes somewhere between 30 to 90 days. I find this especially important for dental associates for whatever reason. Without the ability to terminate the contract agreements at any time, let’s say the dental associate has two-year contract agreements, and they cannot terminate without-cause. Unless the other party breaches the contract, you’re essentially stuck there for two years.
Employment Red Flags: Net Collections and Long Notice Period
There are plenty of scenarios where if a dentist associate is on net-collections, volume, and compensation, the owner will generally overestimate what the associate will make. And so, they can get into a job if they’re not paid a daily rate or a salary, it’s more of just eat what you kill and get a percentage of whatever is collected, and the volume isn’t there, and you’re not making nearly as much as you expected.
You still would have to play out the rest of those two years. And that is a situation no one wants to be in. So, the first thing ensures there’s no-cause termination at any time. Sometimes, the employer will try to say, you can’t give notice in the first year, or you can’t give notice in the first six months, or whatever. No, anytime, if you start, you provide notice. You do your, whatever the notice period is, move on. Absolutely necessary. Two, compensation. If you are a dentist and they’re paying you on either net-collections, encounters, or some volume metric, and you are not 100% certain that the volume is there for you, you need to be very careful about taking that job.
Dental Associate/Contractor Compensation
A daily rate or base salary, especially in the first year or two, insulates the dental associate from getting completely screwed by an employer unwilling to make an income guarantee and bring in a dentist. But in that circumstance, only pay them based upon a volume metric. Like in the example I just gave, if a dentist starts and their compensation is based purely on production and the production is entirely out of their hands, they’re not doing the marketing. It is on the employer to drive the business. It’s a problem. What amount draw they receive should also be a consideration.
So, it’s essential to have a guaranteed salary or daily rate for anyone new, maybe just out of training or relatively new. And then once you’re there, and perhaps you’ve been there a year or two, and you see that the volume is there, maybe potentially you can make more under collections model, well then, talk to the owner about switching. But at the very beginning, I find most places that try to lure dental associates in with big numbers. It rarely shakes out that way. Another big red flag is the non-compete, and this is one thing that varies from state to state. Each state has its view on what’s a reasonable non-compete.
Dental Employment Contract and Non-Competes
Non-competes are enforceable. Almost every state, California, New Mexico, and Massachusetts are three of the few states where they’re entirely unenforceable. But for most states, it must be a reasonable length, usually about 12 months. Sometimes they’ll try to do some reasonable geographic restrictions for two years, usually somewhere between 5 to 15 miles. If you have a five-year, 50-mile non-compete, that’s crazy! You don’t want to sign something like that. You want it to be no more than a year, and then no more than, I would prefer 10 miles from your primary practice location.
Many of these big corporate dental offices have multiple locations in the area. They will state it’s 10 miles or whatever the geographic restriction is from every place they own, even if the dental associate didn’t provide care or work in that location. No, you can’t agree with that. It needs to state that it will only apply to the areas where the dentist provided care, and even then, try to limit it to no more than two locations. In big cities, corporate dental conglomerates continue to gobble up some dentist-owned practices.
If someone has 10 locations in a city and is 10 miles from 10 sites, that non-compete will knock you out of your city. So, what’s in the non-compete is certainly important. And then last, I’ll touch on the benefits briefly. The employer should pay for your license, DEA registration, and continuing education if a dental associate is an employee. If you’re moving from out of state, reasonable moving expenses and reimbursement are everyday things an employer should pay for. So, think about that as well.
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