Is 10 miles a reasonable non-compete geographic restriction? If you are a veterinary associate and you are an employee or have potentially been bought out by these enormous veterinary conglomerates gobbling up all the veterinarian-owned practices lately, you will likely have a non-compete in your contract. A non-compete simply says you cannot work within your specialty for a set period within a certain geographic radius from where you work. Let’s kind of break down the elements of that.
Are Non-Compete Clauses Enforceable?
One, non-competes are enforceable in nearly every state. There are a handful of states where they are completely unenforceable. However, you should go into signing the contract, assuming it’s going to be enforceable.
I find that most providers, for some reason, think that all non-competes are completely unenforceable. Yes, maybe if it’s unreasonable. Still, most states find that a reasonable non-compete would be considered enforceable. You first need to identify whether your state recognizes non-competes for providers or not. Okay, let’s just assume, yes, you’re in a state where it’s enforceable. The non-compete is going to state you cannot practice in your specialty. You want to make sure you’re a specialist and have multiple options specific to the task that you’re doing for that employer. Now, if you’re a general vet and it says you cannot act as a general veterinarian, okay. But maybe if you’re in emergency medicine, urgent care, an animal hospital, or something like that. Keep it specific to what you are doing.
And then it will be for somewhere between one to two years. You want to keep it less. One year would be considered reasonable pretty much anywhere. Sometimes, they’ll try to push it out to two, sometimes three years. I do not think three is a fair amount. So, you would want to keep it down to one year at most. And then finally, what we’re focusing on today is the geographic restriction. So, is 10 miles of reasonable non-compete geographic restriction? I would say, yes, it is. Now, the setting is important. If you’re in an urban environment, 10 miles can knock out hundreds of opportunities. Whereas if you’re in a rural environment, there may be no other place to compete within 10 miles.
Other Blogs of Interests
- Veterinary Non-Compete Clause | Non-Competition for Veterinarians
- How Many Locations Should a Veterinary Non-Compete Apply To?
Is Negotiation Possible for Non-Compete?
Depending upon where you are. If you’re in a bigger city and there are dozens to hundreds of different practices. You may be able to work after the contract terminates. A smaller radius would be considered more reasonable. Now, there will be employers that try to push the limits of the geographic restriction. And they’ll do it in several ways. One, they could try to stretch out the mileage 30 or 50 miles from your practice location. That would not be considered reasonable in most places. Two, if they are a vet clinic with multiple locations within a city, they may say it attaches to every location they own. If you’re not working at those other locations, it is not fair if that is included in your non-compete. You want to remove that and limit it to where you just work.
Now, what if you work at multiple locations? Well, one or two locations, okay, it could attach to both of those. But an employer may try to be sneaky. And it states any place you’ve worked over the last 12 months it attaches to. And maybe they have four or five locations. They might just try to place you at one location one day per year to attach the non-compete to that. You need to make certain that they are not allowed to do that.
And the easiest way to do that is just to state in the contract that if there are any locations that the employer wants you to work at beyond the initial location. There must be a mutual agreement. When is the right time to negotiate a non-compete? Before you sign the contract. You have no leverage after the fact if you sign an agreement and then come back to the employer.
What are the effects of non-compete clauses in the veterinary field?
So, you want to ensure that they understand that the non-compete will not work for you for whatever reason. People who live in a city have kids who go to school, have family in the area, and cannot move after the contract is terminated. This could be the biggest problem with any kind of employment contract. Others just move to a city for a specific job and do not care because they don’t plan on staying there if the job doesn’t work out.
You need to prioritize what’s most important to you, but the non-compete, certainly for a lot of my clients, is the number one thing. And you need to make it clear to the employer. Look, I’m not going to accept this the way it’s written. If you want me to work for you, we’re going to have to come to a compromise, and some will say, okay, and then others will say, no, take it or leave it. And then it’s up to you to decide whether it’s something you want to leave or not. So, is 10 miles a reasonable non-compete for a vet? For the most part, yes, it would be considered reasonable, but you must take into account all the other factors I just talked about.
Can You Break a Veterinarian Contract?
Can veterinarians or veterinary associates in animal care practice break their employment contracts? And the short answer is yes. They can. However, if this means that veterinarians or the employee, in general, are breaching the employment contract and not adhering to the employment contract terms, then they would likely open themselves up to liability, which includes litigation costs and arbitration as set in the employment agreement.
The employer can ask for damages that might include recruitment costs for new veterinarians for the practice, they may ask for administrative fees, credentialing fees, and the list kind of goes on from there because of the resources they spent to find a new employee. So, it’s never a good idea for veterinarians employed in veterinary practice to break employee agreements. We never advise our veterinarians or veterinary associate to breach their employment contracts. The best way to break or terminate the contract is by doing it exactly as outlined in the contract agreement. Typically, there is a clause called a termination clause, and there are normally three ways to terminate a contract agreement.
Mutual Agreement Termination
The first way is that both parties, the employer and employee, mutually agree to terminate the contract and go their separate ways. However, this is rare, and we don’t see it happening often.
For Cause Termination
The second way is for-cause termination. And this is typically weighted more towards the employer. The employer can terminate the veterinary employment contract without notice if any egregious acts happen; typically, they are listed on the veterinary employment agreements themselves. This might be violating a law, being convicted of a felony, and losing your license to practice animal care. And again, the list just goes on from there.
Without Cause Termination
Then the last way to terminate a contract would be for no cause, and a no-cause termination is typically outlined in the employment agreement. You must give the other party 60 to 90 days’ notice, and then the contract is terminated, and you can go your separate ways.
Proper and Effective Notice of Termination
The veterinarian’s employment contract also typically outlines how veterinarians or a veterinary associate will give that proper notice. It normally has an address, and you would either mail in a letter, hand-deliver it, and in some rare instances, you’re allowed to email it. We also encourage our clients to give notice in multiple ways, as long as the law allows for it. The proper way to save the employee from liability is to properly terminate a contract, so both parties can save on resources by avoiding litigation as permitted by the law.
Is There Any Repercussions?
But when you’re deciding to do this or break the veterinary employment agreements, you also want to keep in mind, are there any repercussions? Meaning, do you have to pay back any signing bonuses, or any relocation expenses, so you are near the job site? Typically, those have a payback provision or a forgiveness period. And if you are to break or terminate the veterinary contract within that time, you must repay those. So, that is something you want to look at in your veterinary contract, and keep that in mind whenever you decide to break or terminate the veterinary contract agreements.
And then lastly, most veterinary employment agreements have a provision with restrictive covenants. Restrictive covenants include your non-compete and non-solicit clauses to clients and employees in animal care practice. In the non-compete clauses, you want to ensure that you’re not practicing animal care within the restricted area of practice during your restricted time, as determined by the noncompete clauses in your veterinary employment agreement. Typically, you’re not allowed to solicit clients, which means veterinarians leaving the job can’t ask clients or entice them to come with the veterinarian to a new job location, and the same for employees at your clinic or practice.
In summary, you never want to breach a contract. If you want out of it, you need to terminate it properly and give proper notice to your employer. And then you also need to remember, are there any repercussions to look for? Sort anything you’ll need to pay back, like signing or relocation bonuses, and then look at those restrictive covenants to ensure you’re not violating any of them.
Lawyer Review of a Non-Compete Agreement
Veterinary practice noncompete clauses can be rather complex for the employee and are certainly relevant to your work life moving forward. Some people prefer to take their veterinary practice agreements to a lawyer to have them review said veterinary agreement before they sign on the dotted line. Doing so will likely give the signer some peace of mind, and it will certainly make it less intimidating to try to figure out if the documents that you just signed are in your best interest or not. Beyond the non-compete clauses, veterinarians must also determine their malpractice insurance responsibilities if the veterinarian’s contract is terminated. What type of professional liability policy did you have?
If you would like more information about employee non-compete agreements, how they operate, the law that covers noncompetes, and what you should do if a company gives you an offer and you are asked to sign one, please contact us today! We will be more than happy to discuss the content of clauses of the agreements veterinary practice, average job wage, a different approach in negotiating the veterinarian’s contracts clauses, and other resources.
Veterinary Contract Questions?
Contract Review, Termination Issues and more!