Is a 2 Year Non Compete for a Physician Assistant Reasonable? | PA Non Compete
Is a two-year non-compete reasonable for a physician assistant? If you’re a PA and you’re about to sign either an employment agreement or many independent contractor agreements, it’s going to include what’s called restrictive covenants, and a restrictive covenant essentially prohibits the PA from doing something either during or after the contract terminates. Normal restrictive covenants would include a non-disparagement clause, a non-solicitation clause, and then a non-compete, which is what we’re going to talk about today. A non-compete prohibits the PA from working either within their specialty or as a PA, completely within a specific geographic radius for a specific amount of time. Let’s take each of those components and then we’ll get into a discussion about how long a non-compete should be.
Physician Assistant Non Compete Prohibition
A couple of things you need to look for when it specifies exactly what the PA is prohibited from doing. It’ll either say you cannot practice as a physician assistant at all, or let’s say you’re working for an orthopedic practice. It may say you can’t work in orthopedics as a physician assistant. The reason why this is important is if you’re absolutely tied to an area and there’s absolutely no way that you can move after the contract terminates, then at least you’ll have other opportunities as a PA. Even though you may want to stay in your specialty, at least you would have another opportunity until the non-compete would end, and then you could get back into, in this case, orthopedics, if you wanted to. So, you need to make certain there’s a language that is limited to what you are doing for that specific employer.
Reasonable Non Compete Agreements
Next is the geographic radius. Usually, somewhere between five to 15 miles would be considered reasonable by a court. There are some states, a handful of them in the United States where non-competes are completely unenforceable. But for those where it is enforced, the courts will look at the reasonableness of the non-compete. And then the factors that go into that is, what community is it? 10 miles in New York City could be vastly different than 10 miles in rural North Dakota where you may have zero other opportunities if you’re not working for a practice. You need to think about, alright, what is the setting where I am, and 10 miles, one place could be vastly different than 10 miles and another. Now, as far as how long it should last. Most non-competes last somewhere between one to two years. I would say almost no non-compete for a provider over two years would be considered reasonable or enforceable. Other topics of interest include:
- How Many Locations Should a Physician Assistant Non Compete Apply To?
- Is 10 Miles a Reasonable Non Compete for a Physician Assistant?
If you’re a PA and you have a non-compete, you want to get it as close to one year as possible. Most states do not have statutes or laws that specifically address non-compete. There are a handful, but most of them base kind on what is considered reasonable based on past case law, and most courts that then will litigate these non-compete cases will give their opinion on what they would consider a reasonable amount of time. And most judges find that one year or no more than one year would be considered a reasonable amount of time. It’s rare that you’re going to find a non-compete that’s less than one year. I mean, there are a handful I’ve seen that are six months, nine months, and 12 months is the standard.
Negotiating Non Compete with Employer
What you want to do is if it’s 24 months, try to negotiate that down to 12 months. That would be a reasonable amount of time for a physician assistant. Now, as far as negotiating a non-compete, obviously, you want to do it in advance of signing the contract and then you need to consider how important it is to you. Let’s say you’re from a community, you have family in the community, and you have kids that go to school in the community, there’s just no chance that you can move after the contract ends, the non-compete could be the important thing in a contract to determine whether you want to move forward with it or not. Some people move into a community just for a job, there’s no commitment to a community, and they do not care if they must move.
In that scenario, it’s probably not worth putting any time into negotiating the non-compete. But it could be a deal breaker for some. If you work for a corporate-owned practice, a hospital, or a healthcare network, many times they’ll give a take it or leave it non-compete and it’s many times better just to leave it if it’s not going to work for you. You’ll have a better chance of negotiating a favorable non-compete if it’s with a smaller physician-owned practice, they’re usually more flexible. They can’t use the “well this policy”. I mean, anyone who says that, okay, great, it’s policy. It doesn’t mean you can’t do it; it means you don’t want to. Anyway, that is what a reasonable length of time for a non-compete is for a physician assistant.
Is a 10-mile non-compete restriction is a reasonable amount for a physician assistant? If you’re a PA and you sign an employment contract, there’s going to be a section that includes restrictive covenants. Restrictive covenants essentially stop the PA from doing things either during or after the contract has been terminated. Some normal restrictive covenants would be a non-disparagement clause, a non-solicitation agreement, and then in most states, there’ll be non-compete. And a non-compete essentially prohibits a physician assistant from providing care for a certain amount of time in a specific area. Now, first, there are a handful of states in the United States where non-competes are completely unenforceable. I’m just going to address the states where it is enforceable.
And as I said before, you can count the number of states on one hand that do not enforce non-competes for providers. If you are in a state where non-competes are enforceable, almost every state will look at several factors to determine whether it’s reasonable or not. One is the temporal limitations, so how long it lasts. Most non-competes are going to be somewhere between one to two years. Anything more than two years is likely going to be unenforced or considered unenforceable by a court. Most of the time, if I’m negotiating with an employer or assisting a PA in negotiating their contract, we want to keep it to at least one year, no more than that. And then second, what we’re going to kind of focus on today is the geographic restriction. So, kind of the title of this blog is, is 10 miles a reasonable non-compete?
And I would say, yes, in most states, 10 miles is reasonable. However, several factors need to go into that kind of analysis. First, how many locations does the non-compete apply to? It will state in the non-compete whether it’s the primary practice location, it could be every practice location where the physician assistant has provided care. If it’s like a larger corporate-owned practice, it could be every location that the employer owns in the area. If you’re a PA, you want to focus on narrowing that to just your primary practice location, or at most, the top two locations where you generate most of your charges. Maybe you’re with a hospital system and they own 30 facilities in a city, and you can’t work within five miles of 30 facilities, well, obviously that is an enormous radius compared to one or two locations.
So, first, you want to limit it to just your primary practice locations. Two, you want to limit the look-back period. Let’s say you’ve worked for an employer for five years, and maybe they’ve shown you around to different facilities. You want to limit the non-compete to just where you’ve worked in the last 12 months. It wouldn’t be fair if you worked at a location seven years ago for an employer and for that to continue to count as a location that the non-compete would attach to. And then the last thing would be, as I said before if it’s a corporate-owned practice, you want to make certain that it’s not every facility and then you need the definition of what they consider facilities. Could it be an outpatient clinic? Could it be satellite surgery centers? Is it only specific outpatient clinics in your specialty? There needs to be a definition.
You need to make certain that when they’re saying it applies to a bunch of different locations, there’s definition of the exact type of locations that they are. When I’m talking to a PA about alright, what’s a reasonable non-compete? One year, five to 10 miles would be considered reasonable and likely enforceable. Now, the last thing you have to think about is the setting and where you’re located. 10 miles in New York City is going to knock out thousands of more opportunities than 10 miles in rural Idaho. The kind of geographic restriction can vary, meaning, whether it’s considered reasonable or not based upon: are you in a big city or are you in a rural community where there are no other opportunities you could even go to after the contract terminates? If you are in a bigger city, a smaller amount would be considered reasonable.
Whereas if you’re in a rural community, a larger amount than 10 miles could be considered reasonable as well. This is something that can be negotiated and should be negotiated, obviously in advance of signing the agreement. So, if you’re very concerned about your non-compete, you need to make certain you have a frank discussion with your employer. And for instance, there are many people who you grew up in a community with, you have kids, you have family there, and there’s just no way that you can move after the contract terminates. That could be the most important thing in any kind of negotiation with the new employer. And so, you need to tell the employer, these are the reasons why this non-compete is not going to work for me. And I find most reasonable employers might be open to limiting it in some way.
Now, most corporate-owned practices are going to say, oh, this is a non-negotiable clause, or, oh, we’re not allowed to change it, which is complete crap. They certainly can, they just don’t want to. So, you must take it into consideration, alright, is this somebody I want to work for if they’re not going to make any changes? One concern I always have is when someone says, oh, we can’t make any changes, it’s the policy. Well, it’s your policy. It doesn’t mean it’s illegal. Anyway, hopefully, that was helpful. A little primer on physician assistant non-competes.
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