How Many Locations Should a Veterinary Non Compete Apply To?
How many locations should a veterinarian’s non-compete apply to? Let’s first start with what is a non-compete. There are normally two components to a veterinary non-compete clause. It restricts you after your employment has terminated with your current practice, so you were restricted from providing veterinary services, or if you’re specialized in any of those specialty services for a period within a specific restricted area, normally non competes last for one to three years. And then today what we’re discussing is how many locations should that restricted area apply to? Normally, the restricted area can really be anywhere from one mile all the way up to 20. It just really depends on where you live in the United States.
If you’re in a city area, typically it’s going to be less miles. If you’re in a rural area, normally that restricted area is going to be larger. So, we’ve got our time frame, we’ve got our restricted area. And now, we need to know a very important question: how many locations from your practice is that restricted area attached to? If you’re a small practice and they only have one location, that’s easy to figure out. It’s only going to attach to the one location that you’re providing services for. It gets a little bit more complicated when there are multiple locations, multiple clinics or if it’s a corporate veterinary practice, which is very common nowadays.
So, if there are multiple locations owned by this practice, you have to be careful and read your non-compete clause very carefully. Sometimes there’s a language that states that you’re restricted only from your primary location where you give services within 12 months of termination of that agreement, that’s kind of like standard language. It gets a little bit trickier when there’s language in the agreement that states “any location that you provide services at”. Why does this matter if it says any location? Well, if you fill in for a vet who’s on vacation, boom, that non-compete restricted area now attaches. There’s no sort of language in there that says for how long you have to be giving services at that location, it just says any services and you provide it, then boom, that location now has a restricted area around it from competing.
So, this can really get complicated if you move around and you’re here or there, but you do have one primary location. Another sort of scenario that I see a lot with clients, and this pertains more to more of corporate practices. It will say if corporation ABC, let’s just pretend that’s the name of it. The non-compete clause will say that the restricted area attaches to any location owned by corporation ABC. Now, this really gets complicated. When you sign that document, the corporation may have 10 locations. Right off the bat, that’s overly restrictive. But if they buy up 20 or 30 more practices within the United States or the state alone, now you have a huge area that you are restricted from practicing.
Would this be enforceable? Depends on what state you’re in, but it would be unreasonable. And even if it would not be enforceable, you don’t want to get into a situation where you have to litigate that and spend money paying attorneys to fight out the terms of your agreement that you signed. So, to prevent all of this from happening, I always recommend reading your agreement very carefully. When you get to the restrictive covenants, that’s your non-compete clause would be included in there, read it carefully and see what locations the non-compete attached to. It really should only attach to your primary location. You really want to advocate and push for that because if it starts attaching to any place you provide services for, you need to be very careful if you decide to cover for a vet knowing that now you are restricted from that area, from that location. And the other thing you really want to look for is if it’s any practice or any location that the practice owns. You want to be careful there because you don’t even know what the future will hold for that corporation, and how many practices are going to buy up in the future. You could really be limiting yourself, so you want to read your employment agreement carefully and look for a language that’s only restricting your primary location.
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