Is a 2-Year Non compete Too Long for Veterinarians | Veterinary Practice

You will have signed an employment contract agreement if you are an employee. And in that employment contract agreement, it’s going to contain restrictive covenants. And restrictive covenants are things you can’t do either during or after the contract is terminated. Typical restrictive covenants in a veterinary practice employment contract include:

• A non-disparagement clause.
• A non-solicitation agreement.
• Confidentiality provisions.
• A noncompete.

A noncompete essentially prohibits the vet from operating for a period within a specific geographic radius of their workplace. In the agreement, let’s say you’re a general vet. It’ll say you can’t practice as a general veterinarian for one year within 15 miles of your primary practice location.

What the Veterinarian Employee Noncompete Agreements Says

Let’s talk about some sneaky things the employer tries to do in a non-compete. First, vets can do multiple things. They can do emergency medicine, they could do urgent care, and they could do general vet issues. You want to ensure that the specialty written into the contracts is what you’re doing for that employer. If you’re doing emergency medicine, you don’t want them prohibiting you from being a general vet after the contract terminates. You want as many options as possible when the contract ends, so you don’t have to move. Prohibiting things that you didn’t even do for that employer doesn’t make a lot of sense to me. So, you want to ensure that it doesn’t say you can’t do any veterinary medicine. It needs to be specific to what you were doing for that employer.

For some specialists, say you’re a radiologist, there’s going to be no way around that. But it needs to state what you’re explicitly doing for that employer, nothing more. Regarding time, most non-competes for vets are usually going to be somewhere between one to two years. If you have a noncompete that’s three or five years, that is probably not enforceable and completely unreasonable too. Somewhere between one to two years is the ideal range. One year would be better than two. But it’s not uncommon to see both of those lengths in the contract. So, is two years too long for a noncompete? Ideally, you would want one, but two years, I think, could be considered reasonable in some states.

Geographic Restriction for Veterinary Practice Employment

Let’s discuss geographic restriction. Suppose you’re working in two locations for 5 to 15 miles. That’s a decent range. And these corporate-owned veterinary practices continue to gobble up these veterinarian-owned animal care practices. With that in mind, you must ensure that the geographic restriction only attaches to the places you’re working. Let’s say you’re in a big city and a business-owned vet practice owns ten clinics there. If you have a 10-mile noncompete from 10 clinics, that could knock you out of a city. It’s more reasonable if it were just 10 miles from where you worked. 

It might be annoying to go outside that radius for however long non-compete lasts. However, you’ll at least have other opportunities. If you’re with a huge business-owned practice, you must ensure that the noncompete only applies to your primary practice locations. No more than two. Only one or two at most. Some contracts don’t just do a radius but also counties. You can’t work in this or any contiguous counties. Any counties that touch your county would be unreasonable. Now, it’s going to depend upon the setting. If you’re in an urban environment, 10 miles could knock out hundreds of opportunities.

If you’re in a rural community, there may be no other opportunities within 10 miles of your clinic. Consider that. The larger the city, the more opportunities. The smaller the radius, the more reasonable. Why does it matter? Suppose you grew up in a town, and your kids go to school there. Your family has deep ties to the community. The last thing you’d want is for you to move out. Maybe it’s just impossible. It’s imperative to focus on the geographic limitation and how many places it attaches to in that scenario. And then also, how long it is. 

Negotiation with the Employer about Non-Compete in the Agreement

You’d want to aim for one year rather than two. That way, you have the shortest inconvenience if you must work outside of the restriction for that 1-year span. Now, how do you negotiate employee non-compete agreements? You must ask for what you want. If they come to you and offer two years and 50 miles from your primary practice location, that’s likely unenforceable. Undoubtedly unreasonable. Say you want a one-year non-compete with a 10-mile restriction from the two places I generate most of my charges. Some big corporate-vet practices may say oh, I’m sorry, we can’t change the non-compete. They can change it. They just don’t want to.

You have to decide if they say take it or leave it, what you’ll do. For some people, it’s the most important thing when negotiating contracts. For others, it doesn’t matter at all. Maybe you move to the community for a job, but don’t have any plans of staying there after. Then you want to focus your attention on negotiating more important things, and don’t bother mentioning the non-compete. It depends upon the vet. Where they’re at in life, whether they have ties to the community. To determine how much capital they want to put into negotiating the terms of the non-compete. There are states where non-competes are wholly unenforceable for providers. There’s only a handful of them. 

So, you’re likely in a state where non-competes are enforceable. I get comments like, hey, I talked to a colleague. They said non-competes are completely unenforceable everywhere. For vets, that’s just not true. They are, in most states, if they’re reasonable. Whether something is reasonable or not varies on the viewer. But I would consider never signing a contract agreement, just expecting something not to be enforceable, and always trying to negotiate better terms. 

Other Blogs of Interest

• Veterinary Non-Compete Agreements
• Veterinarian Contract Red Flags

Can You Break a Veterinarian Contract?

Can veterinary associates in animal care practice break their employment agreements? Yes, they can. If employees breach the employment agreement and don’t adhere to the agreement terms, they’d 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, etc. 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 veterinary associates to breach their employment contracts. The best way to break the contract is by doing it exactly as outlined in the agreement. Typically, there is a termination clause. 

Three Practices of Ending Contracts

There are three ways to terminate employment contracts. The first is for both parties to mutually agree to terminate the agreement and go their separate ways. However, this is rare, and we don’t see it happen often. The second way is for-cause termination. This is typically weighted more towards the employer. The employer can terminate the employment agreement without notice if any egregious acts happen. Typically, they are listed on the employment agreements themselves. It might be violating a law, being convicted of a felony, or losing your license to practice animal care. The list goes on. Lastly, the third way to terminate a contract would be for no cause. The employment agreement typically outlines the no-cause termination. You must give the other party 60 to 90 days’ notice. Then the contract is terminated, and you can go your separate ways.

The veterinarian’s employment contract also typically outlines how they’ll give that proper notice. It usually has an address. You’d either mail in a letter or hand-deliver it. In rare instances, you’re even allowed to email. We encourage giving notice in multiple ways, as long as the law allows it. The proper way to save you from liability is to terminate a contract properly. So that both parties can save on resources by avoiding litigation as permitted by law. You also want to know if there are any repercussions. Do you have to pay back any signing bonuses or relocation expenses? Typically, those have a payback provision or a forgiveness period. If you are to break the contract within that time, you must repay those. So, that’s something you want to look at in your veterinary contract. Keep that in mind whenever you decide to terminate the agreement.

Restrictive Covenants

Lastly, most veterinary employment agreements have a provision with restrictive covenants. They include your non-compete clauses and non-solicit clauses to clients and employees in animal care practice. Ensure you’re not within the prohibited area of practice during your restricted time as stated in your agreement. Typically, you’re not allowed to solicit clients. That means associates leaving the job can’t ask clients or entice them to come with the veterinarian to a new job location. The same for employees at your 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. You also need to remember, are there any repercussions to look for? 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.

What is a Non-Compete Agreement? 

The Treasury Department defines a non-compete agreement in the following way: non-compete agreements are contracts between workers and firms that delay employees’ ability to work for competing firms. Employers use these agreements for various reasons. They can protect trade secrets, reduce labor turnover, impose costs on competing firms, and improve employer leverage in future negotiations with workers.

Employers gain a lot of upside value from requiring their employees to sign non-compete forms before they begin working there. This can help them lock down workers who might have jumped from job to job for other opportunities. The practice is so widespread in the animal care industry that it generally works in favor of all participants equally. They are all rushing to secure their veterinary practice workforces, such as a veterinary associate. Non-compete agreements help ensure that at least some of the veterinary practice workforce is locked in place where they are. So there isn’t so much shuffling veterinarians around all the time. Non-competes are many times justified by the employer in return for the professional benefits offered in the practice.

Lawyer Review of a Non-Compete Agreement

Veterinary practice non-compete clauses can be rather complex for the employee and are 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. It makes it less intimidating to think whether the documents you just signed are in your best interest or not. Beyond the non-compete clauses, veterinarians must also determine their malpractice insurance responsibilities if they terminate their contract. What type of professional liability policy did you have?

If you would like more information about employee non-compete agreements, how they operate, and the law that covers non-competes. And what you should do if a company gives you an offer to sign, get in touch with us today! We’ll be more than happy to discuss the content of clauses of the agreements of veterinary practice. Also its average job wage, a different approach to negotiating the veterinarian’s contracts clauses, and other resources.