Veterinary Non Compete Mile Radius Explained: Veterinarian Non Competes

Is 10 miles a reasonable non-compete geographic restriction? If you are a veterinary associate and you are an employee or have potentially been bought out by these enormous veterinary conglomerates gobbling up all the veterinarian-owned practices lately, you are likely going to have non-compete in your contract. A non-compete simply says you cannot work within your specialty for a set period within a certain geographic radius from where you work. Let’s kind of break down the elements of that. One, non-competes are enforceable in nearly every state. There are a handful of states where they are completely unenforceable. However, you should go into signing the contract, assuming it’s going to be enforceable.

I find that most providers, for some reason, think that all non-competes are completely unenforceable, and yes, maybe if it’s unreasonable, but most states find that a reasonable non-compete would be considered enforceable. The first thing you need to identify is whether your state recognizes non-competes for providers or not. Okay, let’s just assume, yes, you’re in a state where it’s enforceable. The non-compete is going to state you cannot practice in your specialty. You want to make sure if you’re specialist and you do have multiple options that are specific to the task that you’re doing for that employer. Now, if you’re a general vet and it says you cannot act as a general veterinarian, okay. But maybe if you’re in emergency medicine or urgent care or an animal hospital or something like that, keep it specific to what you are doing.

And then it will be for somewhere between one to two years. You obviously want to keep it less. One year would be considered reasonable pretty much anywhere. Sometimes, they’ll try to push it out to two, sometimes three years. I do not think three is a reasonable amount. So, you would want to keep it down to one year at most. And then finally, what we’re focusing on today is the geographic restriction. So, is 10 miles of reasonable non-compete geographic restriction? I would say, yes, it is. Now, the setting is important. If you’re in an urban environment, 10 miles can knock out hundreds of opportunities. Whereas if you’re in a rural environment, there may be no other place to compete against within 10 miles.

Depending upon where you are, if you’re in a bigger city and there are dozens to hundreds of different practices, you may be able to work after the contract terminates, then a smaller radius would be considered more reasonable. Now, there will be employers that try to really push the limits of the geographic restriction and they’ll do it in several ways. One, they could just really try to stretch out the mileage 30, 50 miles from your practice location. That would not be considered reasonable in most places. Two, if they are a vet clinic that has multiple locations within a city, they may say it attaches to every location that they own. If you’re not working at those other locations, it is not fair if that is included in your non-compete. You want to get that removed and limit it to the places that you just work.

Non Competition Length

Now, what if you work at multiple locations? Well, one or two locations, okay, it could attach to both of those, but an employer may try to be sneaky, and it states any place you’ve worked over the last 12 months it attaches to, and maybe they have four or five locations. And so, they might just try to place you at one location one day per year to attach the non-compete to that. You need to make certain that they are not allowed to do that. And the easiest way to do that is just to state in the contract that if there are any locations that the employer wants you to work at beyond whatever the initial location was, there must be a mutual agreement. When is the right time to negotiate a non-compete? Obviously, before you sign the contract. You have no leverage after the fact if you sign an agreement and then come back to the employer.

So, you want to make certain that they understand that for whatever reason, the non-compete is not going to work for you. For people that live in a city, they have kids that go to school, they might have family in the area, and they absolutely cannot move after the contract is terminated, this could be the biggest problem with any kind of employment contract. Well, there are others who just move to a city for a specific job and absolutely do not care because they don’t plan on staying there if the job doesn’t work out. You need to prioritize what’s most important to you, but the non-compete, certainly for a lot of my clients, is the number one thing. And you need to make it clear to the employer. Look, I’m not going to accept this the way it’s written. If you want me to work for you, we’re going to have to come to compromise and some will say, okay, and then others will say, no, take it or leave it. And then it’s up to you to decide whether it’s something you want to leave or not. So, is 10 miles a reasonable non-compete for a vet? For the most part, yes, it would be considered reasonable, but you must take into account all the other factors I just talked about.

Compete in New Locations?

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.

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.

Breaking a Contract After Negotiation

Can someone break a veterinary associate contract? The short answer is yes, you can. However, if breaking the employment agreement or employment contract means that you are not adhering to the terms that you signed and agreed to abide by, you could be in breach of the contract. And if you’re in breach, there are some serious consequences that you need to consider. First, sometimes contracts will have liquidated damage clauses stating that if you break this agreement, leave before you complete your term, you do not give proper notice for without cause termination, there may be financial consequences which equate to tens of thousands of dollars. You want to make sure that you read your employment agreement and you understand fully what you’re signing because you can’t just walk away without consequences.

The other thing you want to consider is any of those restrictive covenants. So, that’s your non-compete clause, your non-solicitation of employees. Those all still stand, so even if you break the agreement, you can still be held in violation of the non-compete clause or the non-solicitation clause. So, you want to make sure, again, you read your employment agreement and you understand that those restrictive covenants don’t go away. Even if you breach the agreement, they can come after you for damages, for the breach of the contract, and for a violation of the restrictive covenants. Now, most veterinary employment agreements will have an arbitration clause. That means that you’ll have to sit down with an arbitrator to discuss the damages of this breach. If they don’t have that, then your employer can sue you in court and bring forth any damages. And what’s that going to look like? Well, if they must recruit another veterinarian, the cost of that and onboarding that veterinarian if they’ve lost any business while you are gone, and this can get really serious for someone who’s very specialized and there’s few of you out there that can fill that position.

So, the short answer is yes, you can always break a contract. But what are the consequences of that going to be? You’re probably going to be in breach of the contract and that can either mean arbitration or litigation. You don’t get out of the restrictive covenants; those things stick around. You are going to have to abide by the non-compete and the non-solicitation clauses. Sometimes there’s also confidentiality in there as well. And then, lastly, it’s best just to look at your contract itself. Sometimes, well, most of the time, you should look for it and should not sign a contract that does not have a without cause termination. If there’s a without cause termination, you just give the required notice, which is anywhere between 60 to 90 days, that’s typically an industry standard that you’ll be terminating the agreement. Then at the end of that 60 to 90 days, you walk away.

However, the restrictive covenants are always going to apply, but you’re not opening yourself up to arbitration or litigation costs because you did it properly. The other thing you want to remember if you’re terminating the agreement for without cause, you want to make sure that you give the proper notice so that 60 to 90 days start. There’s normally always a notice clause in your employment agreement contract. However, they’re vastly different. Sometimes you’re able to give your notice in person, via email, however, sometimes they have to be in writing and mailed to headquarters if it’s more of like a corporate setting, but they’re always different. And if you mail them, sometimes the notice starts on the first day and sometimes it starts the third day after you mail it in. Again, you want to read this very carefully, so you make sure that you’re not in breach of your contract.

What Can and Cannot be Included in a Non-Compete Agreement? 

Veterinarians are encouraged to read over all pre-employment forms carefully to know what they agree to. The non-compete forms that they are provided are no exception. They should probably spend extra time with these forms to ensure that they truly agree to the presented information. 

Here are a few things that may be included in a non-compete agreement: 

• Timing Elements – The form may specify the amount of time that a veterinarian is not permitted to go to work for a competitor. Generally speaking, the specified amount of time tends to range between two to five years. During that time, the veterinarian does not necessarily have to continue to work for the same employer, but they are not allowed to work for a competitor. That leaves most in the position of needing to continue to work for the same employer for that time. 
• Geographic Location – Another stipulation that you may see in your non-compete agreement is a geographic restriction on where you may work. The form may indicate that an employee is not permitted to work within a certain mile radius for a competitor. Additionally, it may specify certain states that the employee is not permitted to work for a competitor.
• Type of Employment – Veterinarians have a very specialized job, and companies that hire them want to make sure they don’t lose out on the talent they have acquired. They may include a rider in the non-compete agreement that clarifies that a vet cannot take on other veterinarian jobs while working for the company that they are at right now. If this seems kind of harsh to you, please understand that companies feel that they must do this to protect the asset (the vet) that they have. If that were not the case, people might often jump around from job to job to guarantee prompt service. 

Some elements cross the line and are NOT permitted in a non-compete agreement, including: 

• Limitless Time Restrictions – It is not fair or reasonable to restrict someone from working elsewhere for decades. There have to be reasonable time restrictions included in the non-compete agreement. Generally speaking, these restrictions cannot go beyond five years at most. The longer the time period listed, the more hesitant a potential employee may be to sign the forms anyway. 
• Vague Geographic Boundaries – The boundaries included in a non-compete agreement need to be specific and measurable. It is not reasonable to expect someone to never go to another competitor, no matter where that competition is anywhere in the world. Thus, the boundaries must be set reasonably. 
• Unreasonable Activity Restrictions – Your employer does not get to dictate your life to you forever. You retain many of your freedoms even when you go to work for the strictest of employers. Thus, you should look out for anything in your contract that seems overly burdensome on your freedom to do as you please in terms of your career. 

Lawyer Review of a Non-Compete Practice Agreement

Non-compete agreements can be rather complex, and they are certainly relevant to your work life moving forward. Some people prefer to take their veterinary associate agreements to a lawyer to have them review said agreement before they sign on the dotted line. Doing so will likely give the signer some peace of mind, and it will certainly make it less intimidating to try to figure out if the documents that you just signed are in your best interest or not. Beyond a non-compete a veterinary associate also must determine what their malpractice insurance responsibilities are if the contract is terminated. What type of professional liability policy did you have?

If you would like more information about non-compete agreements, how they operate, and what you should do if you are asked to sign one, please contact us today!