Nurse Practitioner Non-Compete (Is it ENFORCEABLE?)
Is a non-compete enforceable against a nurse practitioner? This depends on several factors, but first, let’s start with what is a non-compete. A non-compete clause is normally located in your restrictive covenants within your employment agreement. The NP non-compete clause is just going to state that for a period, normally anywhere from one to three years, you’re restricted from working in a certain area. And normally, it’s within miles, and depending on your state law, it might be a little bit different how that restricted area is calculated. But for that period, you’re restricted from working in that area so that you’re not competing with your former employer. Non-compete clauses can get really complicated and they’re unique to each situation.
Sometimes it is difficult to know if it’s enforceable. I also think there are a lot of misconceptions out there that if the non-compete clause is stated a certain way that it’s unenforceable and you can get out of it, it’s difficult, I would say, to get out of a non-compete clause that you have signed. Now, if we’re talking about the beginning when you’re negotiating, it’s much easier to negotiate your non-compete clause, but if you are currently employed, you are giving the notice to terminate your employment, and you want out of your non-compete clause, or you want to know if it’s enforceable, this gets a little complicated and I would always advise everyone to meet with an attorney and have the attorney review your documents just so that you make sure because you can have serious consequences.
If your non-compete clause is enforceable and you violate it, there are really two types of legal remedies. The first one, it’s normally listed in your employment contract, this is the most common way. It’s under equitable relief. What this means is that if you violate your non-compete clause, your former employer can take you to a court and normally court for equitable relief. A judge would look at the contract and if it’s enforceable, they would sign something which is like a restraining order or an injunction saying that you cannot work in that area, and you may have to pay for those legal fees. I also have seen contracts where there are liquidated damages. And what that means is, if you violate the non-compete clause, your employer can ask you to reimburse them for tens of thousands of dollars. Other topics of interest include:
- How Many Locations Should Nurse Practitioner Non Compete Apply To?
- Nurse Practitioner Non Compete vs Non Solicit
It’s serious, so you want to make sure if you’re going to violate it, you really need to know if it actually is enforceable, and furthermore, even if it isn’t enforceable, I would highly recommend advising an attorney because you did sign that employment agreement and therefore, your employer may try to fight this with you. And that can be expensive in legal fees. So, you always want to be careful. Now, going back to, is a non-compete enforceable? If you are in a state which has a law, it is becoming more common. There are about three of them that do not allow contracts or do not allow your employer to enforce a non-compete clause. So, if you’re in one of those states, that’s great. It’s not enforceable.
You should always check your state law though, just to make sure. Now, there is a new trend that I’m seeing some laws going into effect that a non-compete clause is unenforceable if you make below a certain amount of money annually, so you want to check your law there and you want to see how much you’re making. Is it more than that threshold? If it is more, it may include bonuses, so you want to be careful, then the non-compete is enforceable. So, state law is going to be the first place you should look. If your state law does allow for non-compete clauses, most of them stay enforceable, if they’re reasonable. Reasonable is extremely vague, and it’s hard to give clients an exact number of miles or an exact number of years, but normally there is some discretion there.
You want to be careful. If it’s over three years, in my opinion, then it’s probably unreasonable for the period. And then also, if it’s wiping out huge areas of a state or even an entire state, something like that, that would likely be unreasonable, but again, you really want to be careful. Most of the time they are enforceable. And so, you want to be careful, you want to protect yourself and you want to make sure you’re doing your research and your due diligence to know if it’s something that you should be concerned about. Now, you can also ask your employer to be let out of your non-compete clause. You are at their mercy there if they’re going to waive that for you. If they ever state that they do, it should really be in writing and signed by both parties. Sometimes I’ve also seen you can buy out of your non-compete clause.
Your employer will say, we will waive this agreement if you pay us a certain amount of money. It’s normally high, but that’s something that you could negotiate. There are some ways around it. But if you signed it and it would be considered reasonable in the court’s eyes, and in your state law, then yes, it would be enforceable. So, you always want to be careful when you’re terminating your employment contract to make sure that you know if you’re going to be violating that non-compete clause.
Non Compete Vs. No Solicitation in Health Care After Employment Has Ended
What are the differences between a non-solicitation clause and a non-compete clause in a nurse practitioner employment agreement? To start, both the non-solicitation and non-compete clauses are typically located in a similar spot in your employment agreement. And it’s normally under the restrictive covenants. Restrictive covenants just mean it’s a promise not to do something. So, you’re promising not to solicit either patients or employees after you leave. And then a non-compete clause is you’re just promising not to compete with your employer whom you have terminated your agreement with. Let’s start with the non-solicitation clause. The non-solicitation clause has about three parts. The first part is how long you are restricted. Normally, a non-solicitation clause is going to be a one-year restriction.
That’s what we mostly see within our practice. You’re going to be restricted for one year from soliciting or reaching out, enticing, or trying to poach former patients or former employees. And what does this mean? It means you can’t reach out to them directly. Now, if you are leaving, you can absolutely let your patients know that you’re leaving, you can let employees know that you’re leaving if they ask you where you’re going. You don’t have to withhold that. You can absolutely let them know. You just get in trouble with these clauses, and you would be violating it if you’re reaching directly out to those patients like sending letters to them stating, this is where you’re going, and if they want your services, they can come with you. That would be in violation of a non-solicitation clause.
Another part of the non-solicitation is who is restricted. As we said, patients, former patients, sometimes it’ll say if they’ve been a patient within the last year prior to your termination, something like that. And then employees. You want to be careful with the employees because sometimes I have seen in non-solicitation clauses, you want to read them carefully, sometimes you’re prohibited from hiring former employees. Now, that’s tricky. That means if you’re opening your own practice, you’re restricted from hiring them. That’s even like even if you don’t reach out to them. So, you want to make sure you’re reading your employment contract very carefully. Now, general advertising. If you’re advertising to the masses, billboards, and social media commercials, that’s not really considered, in my opinion, soliciting those former patients or employees.
It’s just a general advertisement. You’re letting people know that this is where you are, and these are your services. If you have a mailing list and you’re directly targeting former employees or former patients, then you’re probably going to get in trouble with the non-solicitation clause. The other thing you should be aware of is sometimes in the non-solicitation clauses, it says you cannot solicit directly or indirectly, and they don’t really define what indirectly means. You want to be careful there because that’s a very vague term and that you’re protecting yourself. That’s something clients ask to get defined a lot from your employer. So, that’s the non-solicitation clause. You’re restricted for a period from reaching out, soliciting, or enticing patients to either come with you for your services or employees to become employed by you or with you.
Can a Practice Force a Court to Enforce Against a Nurse?
Now, the non-compete clause is a little different. There are normally two parts to the non-compete clause. One, you’re restricted for a certain period. That’s stated, and again, that’s normally one year, but I have seen it try to go up to three years. In my opinion, anything over one year is unreasonable. So, you’re restricted for a period from providing services within a certain area. And normally, it’s within a radius of miles, sometimes it’s city blocks, depending on your state law. I’ve actually seen counties or parishes, but it just depends. So, for a period, you’re restricted from a certain area for providing your services. In the non-compete clauses, you want to be careful because you want to know what locations that restricted area is attached to. Sometimes it can be multiple locations.
In my opinion, it should always be only your primary location where you yourself are located, your home base. But sometimes, though, they can attach if you provide services at any location. So, if you fill in for someone while they’re sick or on vacation, that non-compete then attaches to it. And then lastly, sometimes I have seen companies that state any location of where they have a practice, then you’re restricted. And you want to be careful there because you’re restricted from areas that you’re not even providing services at. So, again, always read your employment agreement very carefully. Non-solicitation and non-compete clauses are normally enforced the same way.
It’s normally called equitable relief, which just means that your former employer would bring your employment contract before a judge. If they found that these clauses were enforceable, they would sign an injunction or a restraining order, which just means that there would be a court order that you could not work within that area, or you could not solicit those patients or employees.
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