What is a Physician Non-Solicitation Agreement?

What is a non-solicitation clause in a physician employment contract?  In almost any physician employment contract, be it in private practice or as a hospital healthcare network employee, there are going to be things called restrictive covenants in the contract. Basically, those are things that the physician cannot do after the employment relationship ends. Those would include a non-competition clause, non-solicitation clause, and non-disparagement clause. Those are kind of the normal things that would be in a restrictive covenant part of an employment contract. Today, we’re just going to talk about the non-solicitation part of that. What does that mean? Generally, the non-solicitation clause will prohibit a physician from actively soliciting patients, employees, independent contractors, business vendors, basically anyone associated with the employer. The physician who is leaving would be prohibited from reaching out to them and actively trying to bring them.

Why is this important and what does it prohibit? Let’s start with patients. The non-solicitation clause will simply state that for a time, usually one to two years, the physician can’t actively solicit the patient, meaning they couldn’t, let’s say download a list of all of their patients with the email addresses or phone numbers or whatever, and then blast out an email to all of their patients stating, I’m leaving the practice, I want you to come with me, here’s my new address, get your medical records and move to my practice with me. The non-solicitation clause would prohibit that. The biggest fear of almost any, at least smaller physician-owned practice is to bring in a physician, and then that physician will establish a relationship with all the patients, build a patient base and then leave, take all the patients, take the employees, and then compete against them.

That’s an obvious fear. And so that’s why the non-solicitation clause is in there, to prevent that type of thing. Now, what does this not prevent? Well, I guess you must think about what is soliciting. Is just general marketing soliciting? I would say no. Most non-solicitation clauses don’t get into the breakdown of what is considered soliciting or not. It’s more of just kind of a general you can’t solicit them, but what this normally wouldn’t prohibit would be normal marketing, not targeting your specific patient base like billboards, newspaper ads, although news alerts are not that great effective mark marketing tactics in 2022, electronic communication like Facebook ads, Google ads, announcements on social media, that type of thing. Normally, if it’s broadcast broadly and not to the specific population, those would not be considered solicitations. Other blogs of interest include:

• What is the Difference Between Claims Made and Occurrence Malpractice?
• Who Owns the Medical Record as an Employed Physician?

Ninety-five out of a hundred agreements will not define what that is. Now, if you are in the office, you’ve given notice to your employer, you’re seeing your patients and they say, hey Dr. Smith, I hear you’re leaving. Where are you going? It’s not soliciting if you just say, I’m leaving, I am going here. There’s the information. A non-solicitation clause cannot prevent a patient from coming with a physician to their new practice. You can’t dictate who someone’s healthcare provider is. And if a patient wants to come with a physician who’s leaving, that employer cannot prevent that, but they can prevent the physician who’s leaving from going after them actively. Another part of a non-solicitation clause will be employees. Now, if the employer is savvy, they will say, you cannot hire an employee, not just solicit them.

Physician Non Solicit

Once again, soliciting would be actively going after somebody. So, sending a text or an email or a phone call or talking to them and saying, hey, I’m leaving. I want you to come with me. I want you to be an employee of my new practice. Quit, come with me. The non-solicitation clause could prevent those activities from going after that employee, once again, they couldn’t absolutely prohibit that employee from leaving and going to the new practice unless the language states you cannot hire any employee from this practice. Usually, it would also state time limit. For instance, it would say, anyone who’s been employed by the practice over the last 12 months, you can’t actively solicit them. Or as I said before, if they’re savvy, it will say you cannot hire them.

I just represent physicians on that side. But if I was representing an employer, I would certainly tell them, don’t just say solicit. I would say, put a language that says do not hire. Independent contractors, business vendors, that type of thing. If you want to use the same vendor for similar services, that’s fine. But you just can’t actively divert that person from the old practice and then independent contractors as well. You couldn’t just ask them to leave the old practice and come with you. If they offer a service that both practices can use, then generally, that’s okay. There’s going to be a non-solicit in most agreements. Now, this is also specialty specific. So, if you think about it, obviously, if you work in the ED, hospitalists, ICU, like any kind of shift-related position where you’re just providing care to what’s in front of you, you’re not going to ever solicit those patients.

Maybe you have some frequent flyers in the ED, but certainly, you’re not going to want them to come with you to a new ED. This is targeted towards people with a solid patient base like pediatricians, primary care, cardiology, those types of specialties. Is it fair? Honestly, yes, certainly it’s fair. And as I stated before, an employer’s worst nightmare is that they bring in a new physician, that physician leaves and takes all the patients. So, I think, yes, it is fair, but as I said before, they can’t completely prohibit a patient from coming with you or coming with a physician to wherever they’re moving to if they stay in the area.

Employer Agreement that Is Not Renewed

What a physician should do if their contract is not renewed. This honestly doesn’t happen that often and we should probably define what is either not renewed or the contract is terminated. So, most physician contracts will have automatic renewal provision. For instance, let’s say you sign a contract. It has a two-year initial term. There’s usually some language in there that states, if it’s not terminated, the contract will simply automatically renew for another year and then it would just continue in perpetuity until one of the parties terminates the agreement.

Any contract will also have a termination provision. So, either party can terminate the agreement for cause. Meaning, someone breached the agreement and then either party can terminate it based upon who’s in breach. There’s another provision, and that is without cause termination. Generally, that states that either party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other, generally, that’s 60 or 90 days, I would say, that probably makes up 90% of all without cause termination amounts. There will also be notice requirement if either party does not plan to renew the agreement and that should match the amount of without cause termination. It doesn’t make sense if either party must give 60 days’ notice to terminate the agreement without cause that the notice requirement of, to not renew the contract would either be less or more than that.

Hopefully, that makes sense. It should be the same. Let’s just say you have a 60-day notice of intent not to renew the agreement. Well, it would be the same process of terminating the contract without cause. One party would give written notice if they didn’t want to renew the agreement. And then that would be it, you’d work out the 60 days. If for whatever reason, the employer didn’t want the physician to finish the 60 days, then the physician would still be paid for those 60 days. They just wouldn’t have to work.

I’ve had physicians come and say, they don’t want to renew the agreement. What should I do? And this might be a stupid answer. It’s to find a new job. They’re like, well, I kind of want to fight for it. And that type of thing. Look, if you’re in a job and the employer doesn’t want you there, do not stay there. It makes zero sense. On a personal level, it will be very awkward. The employer will find ways to get out of the agreement, or they’ll just give the without cause notice and move on. We also do licensing board defense when an employee is either disciplined or maybe the employer filed a board complaint. And that person says, well, I don’t want to leave.

I want to stay here, fight whatever they’re doing. The employer will find a way, one way or another to get rid of that employee. And it will only cause more pain for the employee moving forward. So going back to the original topic of what to do if it’s not renewed, you find a new job. That’s it. It’s hard. Sometimes, it’s hard to say, well, why wouldn’t they want to renew the contract? What did I do wrong? It’s probably we’re finding out why. Most of the time, it’s just production. The physician just simply didn’t produce what the employer’s expectations were. Now, most of the time, the volume issue is not the fault of the physician. It’s a lack of marketing, a lack of referrals. Maybe the staff is poorly trained, doesn’t do a good job of providing solid patient care experience.

There are several reasons why someone’s volume won’t hit expectations. But it’s not, or it’s usually not just the physician simply is too slow. Doesn’t want to see the number of patients that are expected. So hopefully that was helpful as far as what to do if your contract isn’t renewed. Find a new job!