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 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 just going to talk about the states where they are enforceable and then kind of what they would look at whether it’s reasonable or enforceable. In your contract, there’s going to be a section called restrictive covenants. And in that section, it’s going to have a non-solicitation clause, a non-disparagement clause, confidentiality provisions, and then a non-compete. And a non-compete simply 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. If you have some kind of a multi-specialty practice and you can do different things, and you’re only doing one of those things for the employer, I would make certain that the specialty restricted is the one that you’re only doing for that employer. That way, you have some other options after the contract ends to do other things. For instance, maybe you’re doing orthodontics for a 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 is over with. 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 somewhere between one to two years, if it’s longer than that, I think it would likely be unenforceable. You always want a shorter non-compete, obviously. If someone is offering you a non-compete that’s three years or five years, that’s completely unacceptable and very likely unenforceable. As far as 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 and, 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 practicing in that city, which I don’t believe would be considered reasonable and would likely be unenforceable. You want to make certain when it comes to how many locations the non-compete attaches to, it’s only the locations that you’re working at and then no more than two locations, ideally. If it was just 10 to 15 miles from your primary practice location, that would be considered 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 a practice within the geographic limited area. What can happen?
How to Enforce a Non Compete Under an Employment Agreement?
Well, they can sue you. If your contract has an arbitration clause, they could go to arbitration over it. They could go to the court and obtain a temporary restraining order or an injunction, which would stop you from working and they could sue you for, one, breaching the contract, and then 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 then just expecting to ignore it. I think that’s a shortsighted way of thinking about contract law and a terrible strategy. I mean, 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 that they can’t enforce it down the road.
So, yes, non-competes are very likely enforceable against a dentist 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 they have kids in school, and they just absolutely 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 Employment Agreements Non Solicit Enforceability
Non-solicitation clauses versus non-compete clauses. What’s the difference? What’s the same? And what is typical in a dental employment agreement? Let’s start with non-solicitation clauses. Non-solicitation clauses are a promise to not 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. 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 practice or to the patients that you had provided services for while you were an employee. Solicitation, sometimes, is defined in the agreement itself. It may say you’re prohibited 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 define those terms for you. And to me, directly soliciting normally means reaching out to enticing and encouraging those employees or patients to come with you. 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 be in violation of a non-solicitation clause. Let’s talk about general advertisement in relation to a non-solicitation clause. Sometimes, this is directly outlined in the employment agreement, and it’s always best that you start there first, look at the clause itself.
But if it just says you cannot solicit, normally, general advertising is not considered a solicitation. So, that’s billboard, social media commercials, 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 patient lists, you’re getting their addresses and you’re sending letters directly to them, or you’re seeking them out directly, things like that, that would be solicitation. What are the consequences of a non-solicitation clause? Sometimes there are liquidated damages. If you’re found in violation, you may have to pay tens of thousands of dollars. And then normally, I would say there is equitable relief. And what that looks like is if the practice feels like you’re in violation of a non-solicitation clause, they can bring it before a judge.
And 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. Now, let’s look at and talk about what is 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 a practice. Also, a non-compete clause is typically for the same period that the non-solicitation clause is for. 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 what state you’re in, and are you in rural or are you in the city?
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