Veterinarian Non Solicit vs Non Compete: Veterinary Solicitation vs Competition
What is the difference between a non-solicitation clause versus a non-compete clause in a veterinary associate employment agreement? How are they different and how are they the same? I’m going to start with the non-solicitation clause. They’re normally located in the restrictive covenant section of your employment agreement. Normally, it’s stated under restrictive covenants. A non-solicitation clause is just a promise to not solicit directly and sometimes indirectly clients, employees, and sometimes third-party contractors. Let’s talk about this. Non-solicitation clauses are normally broken down into a couple of different parts. The first part is going to have a restricted period. This is normally while you’re employed and then after your contract terminates. Normally, it’s anywhere from one year to three years, it really should be only one year. But it’s for a period that you cannot like I said, solicit those groups of people.
The second part is going to be, what groups of people can you not solicit? First, it’s going to be clients. And then next is probably going to be employees. And then sometimes we see third-party contractors, and this can be marketing supplies, any type of contract the employer had enforceable at the time. So, we have the time, who you cannot solicit, and then let’s talk about solicitation itself. It’s saying you’re promising that you’re not going to solicit. Most of the time, it says directly or indirectly should really be defined in the contract what that means, Solicit, to me, really means reaching out directly to those groups of people. We can use clients, for example, reaching out directly to them, enticing them, encouraging them to leave, and come with you.
That’s when you’re going to be in violation of a non-solicitation clause. Also, just want to address, general advertising is normally talked about in the clauses. And it’s normally not considered a direct or indirect solicitation. This is when you’re advertising to the masses. It might be billboards or social media commercials. Those are examples of just general advertising. When you start targeting those specific groups of people that we just talked about, like a referral list or information that you’re taking from the company, that may be considered soliciting. So, you want to be careful, read your employment agreement very carefully to know. Other topics of interest include:
So, that’s a non-solicitation. Next, we can move on to a non-compete clause. What is a non-compete? It’s also going to be in the restrictive covenants and a non-compete clause is just a promise to not compete with your former employer. It’s broken down into a couple of different parts too. Let’s first start with a period when you’re restricted from competing. This is going to be during your employment, and then normally anywhere from one to three years. Again, in my opinion, it should be limited to one year that you cannot compete. And then you’re going to look at what’s prohibited. Normally, it would be the same type of services that you were providing with your then employer. That’s what’s restricted. Sometimes it says any practice of veterinary medicine, they can be very broad.
So, you want to make sure that you read it very carefully. And then the last part is going to be what area is restricted. Most non-competes in most states are going to say a mile radius and it will say anywhere from 5 to 10 miles from a certain location. It might be your primary location, it might be any location that you’re providing services for, or any location that the practice currently owns. You want to be careful to know what that radius is, where it is attaching to, one location or multiple locations? It also depends on where you are in the United States. If you’re in New York City, it might not actually be miles. It might be city blocks. But if you’re in a rural area, it might be more miles. And if you’re in a small city, it might be considered in miles.
It just depends, but again, it’s going to have a restricted period. You’re going to know what you’re restricted from doing, and then what area you cannot compete in. Non-compete and non-solicitation are similar in the fact that they’re both considered restrictive covenants, which is a promise not to do something. They normally kick in after your employment has ended and they’re normally for about the same period. This is to help the employer’s interest if they have trained you or you’re giving special services that you’re not going to interfere with them. They’re both normally enforced the same way. The first way is called equitable relief, which just means that your former employer, if they think you’re in violation, can bring an action before a judge and they would sign a temporary restraining order or an injunction saying that you couldn’t solicit those patients or work in that restricted area. And then some contracts also have liquidated damages.
They’re saying if you are in violation of those clauses, you may have to pay the company a specific amount of dollars that they’re anticipating would be considered their losses. A couple more things about non-compete, you do want to be careful and check your state law. Some states do not enforce non-competes. So, you want to double-check that. And some of them, there’s a new trend now, depending on how much you make annually, so if you make below that threshold amount, a non-compete is unenforceable.
Veterinary Practice Agreement Non Compete
Are non-competes are enforceable against veterinarians? Employers include non-compete provisions and agreements to protect their interests once the veterinarian leaves employment. This can affect the veterinarian in two main ways. One, there are time restrictions, and two, there are location restrictions. When an agreement ends, the veterinarian moves on from this practice, the non-compete would impose restrictions on when and how that veterinarian can practice if they remain usually within the area. For instance, a typical non-compete provision will have a restrictive period time, usually between one to three years. Additionally, there’s a location restriction where the veterinarian is typically prohibited from performing services within a certain mileage radius from the practice. This can vary widely depending on what part of the country the veterinarian lives in. For instance, if there’s a very urban area, then the location would typically be smaller in scope, maybe 1, 2, 3, a few miles along those lines.
If you’re talking about a larger rural area, then you’re also going to have a larger mileage radius imposed as part of the non-compete restriction. It’s not unusual to see 10 to 20, to even 30 miles, depending on the location and the nature of the services involved. So, to answer the question, yes, non-competes are generally enforceable against veterinarians. There are some states that do not typically uphold non-compete restrictions, but the majority do. Every state is a little different in how its laws treat non-compete and what is considered reasonable. Non-compete restrictions are the main point of negotiation with any contract.
It’s important to understand the details and how they would apply to a specific veterinarian situation. For instance, going back to the discussion of location, there are so many ways that can be detailed in a non-compete restriction. Is the mileage radius and location area tied to the veterinarian’s primary practice location? Is it tied to all locations that the practice owns or may own in the future, especially if it’s a practice owned by a large corporation that’s buying up smaller clinics? Is it tied to any location where the veterinarian would perform services under?
Even if there is a primary practice location, there are multiple locations across the city. And the veterinarian happens to fill in on a temporary basis, for just a couple of days a year, would that trigger that non-compete restriction where the agreement ends, and therefore a much larger portion of the area be unavailable to the veterinarian to practice upon the termination of the agreement? There are so many different factors to consider, and it’s very important to investigate all the details. We’d be happy to answer any questions that you have and look into any veterinarian situation specifically and provide guidance
State Law Dictates Terms Based on New and Old Case Law
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 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 they’re 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 timeframe, 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.
Consultation with Chelle Law
If you would like more information about employee noncompete agreements, how they operate, the law that covers noncompete, 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.
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