Dentist Non Compete Restricted Offices Explained | Restrictive Covenants in Dental Practice
How many locations should a dental non-compete apply to? Before we get into this specific question, let’s back up and talk about what is a non-compete clause. Non-compete clauses are standard in just about any dental employment agreement. Even if you’re with private practice or an extensive corporate practice, there’s typically always a non-compete. Now, they might go by a couple of different names. It might specifically say a non-compete clause. However, it may say restrictive covenant, a promise not to do something. And then, it will list the language a non-compete clause would generally include. And sometimes, they don’t go by any name. They sneak them in there. So, you want to ensure that you read over your employment agreement carefully because this could affect your career after your employment ends with whatever practice you are signing this agreement with.
Can Management Restrict an Employee Dentist?
Can Management Restrict an Employee Dentist?
Let’s talk about what is in a typical non-compete clause. Usually, there are two components to a non-compete clause. One is the period you’re restricted from competing. Now, this can typically be anywhere from six months to two years. It rarely goes over two. And I would say most of the time I see is around two years. Sometimes, I can get negotiated down to one year, but I would typically say the average is anywhere from six months to two years. Now, we have our timeframe. It is how long you’re restricted from competing after your employment agreement is terminated. You might terminate it, the practice might, but your employment has ended. And this is when the non-compete clause would then become valid. Okay, so we’ve got the time for how long. The other component of it is where they restrict you from. Again, this depends on where you are in the country. If you’re in New York, you’re not going to use miles. Typically, New York city’s non-compete clause will stay in city blocks because if you even go one mile, you’re going to knock out most of the city. So, that’s not reasonable. If you’re in a rural area, a tiny town, sometimes the non-compete clause can go anywhere from 10 to 20 miles. And then, if you’re in just a regular city setting, such as Phoenix, the mileage typically goes a little less.
It can be anywhere from 3, 5, or 10. I would say anything over ten would likely be unreasonable. That would be something that you would want to negotiate down. So, we have our timeframe, you must know how long you’re restricted, and then you need to know where you’re restricted from. And this is where we’re talking about the specific questions today. How many locations should that restricted area apply to? It’s easy. If it’s a private practice, and they only have one site you’re restricted from, let’s say three miles from the practice, which we’ll use as an example, that’s great. You know that you cannot practice dentistry within three miles of that location. That’s easy. But likely, they get a little bit more complicated than that. Let’s say it’s a private practice or a small corporation, and they have multiple locations.
Sometimes, the language they’ll use in the non-compete is that you’re restricted to that mileage. So, three miles from any location where you provide practice ABC services. The complicated part is when it uses the word “any location you provide services for.” If you cover a dentist on vacation, so you work a couple of days, maybe a week, at another location for the practice, that three-mile restriction now applies to that second location. So, you want to be careful when reading your employment agreement. If you see anything that says any place you provide services, it should be a red flag for you to think about. So, we talked about the language where they say any location you provide services for.
A green flag will be if you see where they say you’re only restricted by the three-mile restriction from your primary place where you provide services, which is a little clearer.
Suppose you only typically work at one location. In that case, you provide 90% of your services at one location, which is your primary location. Therefore, you’re only restricted to three miles from one location. That’s great. It’s easy to follow, won’t change in the future, and you’ll know if you violate it. Another sort of red flag that you want to be aware of is whether it is a practice with multiple locations or a corporation with many sites. Sometimes, employment agreements will have a language that states you’re restricted from any area that a corporation ABC owns. So, this gets a little tricky. Again, let me restate this. It gets tricky if it says any location from a corporation or practice ABC. You could be restricted, and that three-mile restriction could attach to hundreds of sites you’ve never even been to.
New Practice Restrictions
It isn’t easy because this can knock out a large region. Let’s use Phoenix as an example. It could knock out the whole city if they have multiple locations around the city, even if you’re not providing services for them. You want to make sure you’re reading the contract very carefully. And if the practice is expanding in the future, they could add 5 or 10 locations. And you’ll also have that three-mile radius attached to any of those locations. So, to be more concise, you want to know where you will provide services. That’s very important. Your employment agreement should outline it. Then the non-compete clause should only attach to your primary location. You should advocate for this because if it’s from any place you provide services for, you need to remember that in the future, if you cover for a dentist who’s on vacation, your non-compete clause now attaches to that office that you only worked for for a week.
And it’s going to knock out that area. The other thing is if it says any location the corporation or practice owns. That’s a big red flag, too, because you don’t know if they’re expanding in the future. How many locations? It’s hard to tell. When you sign the agreement, you don’t know what you’re restricted from.
In conclusion, how many locations? In my opinion, it should be only from your primary location where you are providing services, where you have built up a patient base and relationships with your patients. You want to stop yourself from going across the street and those patients going there. Employers will consider it as competing.
Dental Practice Non-Compete Clause
And then two other things you need to consider regarding the non-compete. First, the location listed. As you know, big conglomerates are gobbling up these dentist-owned practices. And so, you could be in a city with eight locations for your employer. You want to ensure that it explicitly says your location or maybe the two locations where you spend most of your time. You don’t want to sign a non-compete stating that it attaches to every employer-owned site, even if you have never worked in those locations. It 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 areas, you want to make sure it states explicitly your location, not all the areas. And then also, if you’re in a specialty, you don’t want to get stuck from being unable to do any 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 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 return to your usual specialty.
Other Blogs of Interest
- Is a 2 Year Non Compete Too Long for a Dentist?
- How Much Time Off Should a Dental Associate Get?
- Does a Dentist Have to Repay a Bonus if they Terminate the Contract?
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 to 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 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.
Dental Associate Non Compete vs. Non Solicit | Solicitation Concerns for Dentists
Non-solicitation clauses versus non-compete clauses for dentists. What’s the difference, the similarity? And what is typical in a dental employment agreement? Let’s start with non-solicitation clauses. Non-solicitation clauses are a promise not to solicit patients, employees, or third-party contractors for a specific period after your employment terminates with your dental practice. What this looks like is you’re either terminated, or you terminate your employment with the practice, and you leave.
Associate Dentists Can Have Restrictive Agreements
A non-solicitation clause states that for a period, typically one to two years, you are prohibited from reaching back out to the practice employees or patients you had provided services for while you were an employee. Solicitation, sometimes, is defined in the contract itself. It may say the employer prohibits you from directly soliciting or indirectly soliciting.
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 explain those terms to you. And to me, directly soliciting means reaching out to entice and encourage those employees or patients to come with you.
What Counts as a Solicitation?
Now, if you’re leaving the 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 that you start there first. Look at the clause itself.
But if it just says you cannot solicit, typically, general advertising is not considered a solicitation. So, that’s a billboard, social media commercials, things like that, not a solicitation. You’d 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’re sending patient lists, getting their addresses, and sending letters directly to them. Or you’re seeking them out directly. That would be a solicitation.
Consequences of Non-Solicitation
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 typically, I would say there is equitable relief. What that looks like is if the practice feels like you violate a 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 patients. That’s typically what a non-solicitation clause looks like. They’re standard.
The Non Compete Clause
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’re promising not to compete with 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. It could be miles, it could be city blocks, it could be counties, or it could be municipalities. It just depends on 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. We’ve talked about a non-solicitation clause and a non-compete clause. Again, with the non-compete clause, another similarity is how employers enforce it. So again, there could be a liquidated damage clause. It states that if they find you violating the non-compete clause, you could pay tens of thousands of dollars.
Also, there’s equitable relief, meaning the 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 Competes Can Attach to Multiple Areas
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:
- the primary place where you provide services,
- any location where you provide services,
- or any location owned and operated by the practice.
Again, the golden rule is you always want to refer to your employment agreement to ensure you fully understand what you’re signing. It could have enormous implications after your employment terminates.
Also another similarity between non-solicitation and non-compete clauses is that one can typically find them in the same part of the contract under restrictive covenants. Restrictive covenants mean a promise not to do something. You’re promising not to compete with a practice, or you’re promising not to solicit.
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