What is a Physician Non-Solicitation Agreement? | Medical Contracts
What is a non-solicitation clause in a physician employment contract? Almost any physician employment contract is in private practice or as a hospital healthcare network employee. There will be restrictive covenants in the contract. 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. What does that mean? Generally, the non-solicitation clause will prohibit a physician from actively soliciting:
- Independent contractors
- Business vendors
- Anyone associated with the employer.
Once the physician leaving would be prohibited from reaching out to them and actively trying to bring them.
Why Is Non-Solicitation Clause Important?
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. This means they couldn’t download a list of all of their patients with their email addresses or phone numbers. Then blast out an email to all 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. Then that physician will establish a relationship with all the patients. Build a patient base, leave, take all the patients, take the employees, and 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 break down the classification of what is soliciting or not. It’s more of just a general you can’t solicit them. This normally wouldn’t prohibit normal marketing, not targeting your specific patient base like billboards or newspaper ads. However, news alerts are not that great effective mark marketing tactics in 2022, electronic communication like:
- Facebook ads
- Google ads
- Announcements on social media.
Normally, those do not fall as solicitations if broadcast broadly and not to a specific population. Ninety-five out of a hundred agreements will not define what that is.
Now, you’ve notified your employer if you are in the office, 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 and 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. Still, they can prevent the physician leaving from actively going after them. 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.
Once again, soliciting would be actively going after somebody. So, sending a text, an email, a phone call, or talking 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 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 a time limit. For instance, it would say anyone 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 were 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 can’t actively divert that person from the old practice and independent contractors. 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.
Considering the Specialty, Is Non-Solicit Fair?
Now, this is also specialty specific. So, consider whether you work in the ED, hospitalists, or ICU. Like any shift-related position, you’re just providing care to what’s in front of you. You will never solicit those patients.
Maybe you have some frequent flyers in the ED, but you’re not going to want them to come with you to a new ED. This targets people with a solid patient base like pediatricians, primary care, cardiology, and 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. Still, 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 are the things physicians should do if their contract doesn’t renew? This situation honestly doesn’t happen that often. We should probably define what is not renewed or the contract terminated. So, most physician contracts will have automatic renewal provisions. For instance, let’s say you sign a contract. It has an initial two-year term. There’s usually some language that states if it’s not terminated, the contract will automatically renew for another year. Then it would continue perpetually 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. This means 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 a notice requirement if either party does not plan to renew the agreement. That should match the amount without-cause termination. It doesn’t make sense if either party must give 60 days’ notice. To terminate the agreement without-cause the notice requirement of not renewing the contract would be less or more than that.
The Process of Not Renewing the Agreement
Hopefully, that makes sense. It should be the same. Let’s 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. Suppose the employer didn’t want the physician to finish the 60 days for whatever reason. Then the physician would still be paid for those 60 days. They 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 want to fight for it. And that type of thing. 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 give the without-cause notice and move on. We also do licensing board defense. When an employee disciplines or the employer files a board complaint, and that person says, I don’t want to leave.
Fighting for Unrenewed Contract Makes No Sense
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, find a new job. That’s it. It’s hard. Sometimes, it’s hard to say why they wouldn’t 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 simply didn’t produce what the employer’s expectations were. Most of the time, the volume issue is not the physician’s fault. It’s a lack of marketing, a lack of referrals. Maybe the staff is poorly trained and 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 because the physician is too slow. He doesn’t want to see the number of expected patients. So hopefully, that was helpful regarding what to do if your contract didn’t renew. Find a new job!
Other Blogs of Interest
Physician Assistant Non-Compete vs. Non-Solicit | Compete vs. Solicitation
What is the difference between a non-solicitation clause and a non-compete in a PA employment agreement? In any employment agreement that a physician assistant signs. There’ll be a section containing restrictive covenants. A restrictive covenant essentially prohibits the PA from doing something either during or after the contract gets terminated.
Normal restrictive covenants include:
- A non-disparagement clause
- Non-solicitation clause
Let’s talk about the non-solicitation clause first. A non-solicitation clause will stop the physician assistant from soliciting:
- Other PAs
Once they leave the employer for a set period, most non-solicitation clauses are between one to two years. And some things to think about in a non-solicitation clause would be the definition of solicitation.
Most of these clauses will not define what is considered a solicitation. In my mind, soliciting would be making active steps or taking actions that would initiate contact with patients, employees, or other providers. For example, if you’re in primary care, you download a patient list of everyone you’ve provided care to. Then immediately after, or even in your last few weeks, to the employer. You blast out an email to all your patients saying, I’m leaving this practice, starting a new one. Please come with me. A non-solicitation clause would prohibit that. Another example would be, let’s say there’s an MA, an RN, or front office staff with whom you like and vibe. You’re starting at a new practice and want that person to come with you.
What Are Considered Soliciting?
Maybe you send them a text saying, ” Hey, as you know, I’m leaving. I’d love for you to work for my new employer or me once I leave the practice. A non-solicitation clause would prohibit that type of activity. So, text messages, voicemails, and direct messages through social media are all provable things if you’ll solicit someone. If there were some litigation, they could get access. It would be clear that you were soliciting people. Now, as far as patients go, you can’t dictate who someone’s healthcare provider is. If you leave the practice and have a patient reach out to you and say, hey, I hear you’re leaving. I’d love for you to continue to be my provider. You can give them the information here because you didn’t initiate or make any solicitation efforts.
The patient came to you first. So, if someone asks you straight up, I heard you’re leaving. Where are you going? It’s not like you must clam up and not say anything. You can give them the information. And then it’s up to the patient if they want to come with you or not.
Regarding non-compete, non-compete would prohibit you from working as a PA for a specific period within a specific area. Normally, most non-competes are somewhere between one to two years. Then would prohibit the PA from working as a PA, maybe for 5 to 15 miles from their primary practice location.
Questions to Ask on Determining the Fairness of a Non-Compete
When determining whether a non-compete is reasonable or fair, does it specifically list the specialty that the PA attends? Let’s say your PA in orthopedics. Does it say you can’t practice as a physician assistant in any specialty? Does it say you can’t practice in orthopedics as PA? You want to limit it as much as possible. If you’re working for a specific clinic, office, hospital, or whatever, you want to ensure that it’s just in the specialty. Allowing you to at least work in something else for however long the non-compete lasts.
Solicit vs. Competing
The length of one to two years is reasonable. One year would be preferable. Anything above that would likely be unenforced. And then lastly, how large is it? This is going to be dependent upon your location. Ten miles in New York City will probably prohibit thousands of opportunities. Whereas 10 miles in rural South Dakota, you may have no other opportunities. So, your geographical location will determine whether 5 miles is fair or 15 miles is fair, or 20 miles is fair. And then the state is also essential. There are a handful of states that prohibit non-competes entirely. But most states in America do consider non-competes enforceable if they’re reasonable.
So, that’s the difference between non-solicitation and non-competition. In non-solicitation, you can’t actively solicit business from past patients, employees, or other providers. A non-compete stops the PA from working in their specialty or any PA activities within a period and specific area.
Physicians Assistant Non-Competition Law
Is a two-year non-compete reasonable for a physician assistant? Suppose you’re a PA and are about to sign an employment agreement or many independent contractor agreements. In that case, it will include restrictive covenants. A restrictive covenant essentially prohibits the PA from doing something either during or after the contract terminates. Normal restrictive covenants would include:
- Non-disparagement clause,
- Non-solicitation clause
We’ll talk about that today. A non-compete prohibits the PA from working within their specialty or as a PA. Within a specific geographic radius for a specific amount of time. Let’s take each of those components, and then we’ll discuss how long a non-compete should be.
It would help if you looked for a couple of things when it specifies what the prohibitions for PA are. It’ll say you cannot practice as a physician assistant at all, or you’re working for an orthopedic practice. It may say you can’t work in orthopedics as a physician assistant. This is important because if you’re married to an area, there’s no way to 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 ends. You could get back into, in this case, orthopedics if you wanted to. So, it would help if you made certain there’s a language exclusive to what you do for that specific employer.
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 in the United States, where non-competes are completely unenforceable. But for those where it is enforceable, the courts will look at the reasonableness of the non-compete. And then the factors that go into that is, what community is it? Ten miles in New York City could be vastly different than 10 miles in rural North Dakota, where you may have zero other opportunities. You need to think about the setting where I am and 10 miles. One place could be vastly different than 10 miles and another. Regarding how long it should last—most non-competes last between one to two years. Almost no non-compete for a provider over two years would be considered reasonable or enforceable.
If you’re a PA and 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 is a handful but mostly based on what is reasonable based on past case law. Most courts that then will litigate these non-compete cases will give their opinion. Opinions regarding 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.
Negotiating the Period of a Non-Compete
You rarely find a non-compete that’s less than one year. I mean, a handful I’ve seen that are six months, nine months, and 12 months is the standard. 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, regarding negotiating a non-compete, you want to do it before signing the contract, and then you need to consider how important it is to you.
Let’s say you’re from a community, have family, and have kids that go to school. 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, have no commitment to a community, and do not care if they must move.
Non-Compete Agreement Lawyer
In that scenario, it’s probably not worth 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, they’ll often give a take it or leave it non-compete, and it’s often better to leave it if it’s not going to work for you. You’ll have a better chance of negotiating a good non-compete with a smaller physician-owned practice. They’re usually more flexible. They can’t use the “well, this policy.” I mean, anyone who says, ” Okay, great, it’s policy. It doesn’t mean you can’t do it; you don’t want to. That is what a reasonable length of time for a non-compete is for a physician assistant.
Phoenix Non-Solicitation Agreement Lawyer
Chelle Law offers non-solicitation agreement dispute resolution for Phoenix, Arizona professionals, businesses, and entrepreneurs. Our firm provides legal services. That includes attorney representation and litigation for employment contract disputes. An employment contract is an agreement that covers the employment relationship of businesses and employees. That is along with day-to-day responsibilities, policy, and professional contacts. It allows the parties to understand the terms of employment clearly. Also, their legal obligations contained in the employment contract are based on Arizona law. Our Phoenix Non-Solicitation Agreement Lawyer approaches contract disputes and AZ law with our client’s rights and expected outcome in mind. The Chelle Law firm will provide attorney representation for contract dispute services and associated practice areas, including:
- Contract Disputes
- Breach of Contract
- Severance Pay Lawyer
- Non Disclosure Agreement Lawyer
- Confidentiality Agreement Lawyer
- Non-Compete Agreement Lawyer
Phoenix Non-Solicitation Agreement Basics
A non-solicitation agreement prohibits an employee from soliciting the employer’s patients, employees, business associates, or referral sources for some time. Unreasonable non-solicitation agreements cause problems for employees after their employment contract gets terminated. The post-employment non-solicitation period has begun. A non-solicitation agreement prevents the employee from soliciting business and hiring employees of the employer for a specific time in a specific area.
Situations that Can Enforce a Non-Solicitation Agreement
For instance, a physician may be prohibited from soliciting former patients or employees of their former practice. That is for one year from the termination of the employment contract. The restrictions contained in non-solicitation agreements must be reasonable. Or a court can find it unenforceable and not legal. Once you contact our law firm, we can assist Phoenix employees. AZ with fighting an unreasonable non-solicitation or negotiating with the employer to settle the rights of the non-solicit clause. Arizona law does allow the enforcement of non-solicitation agreements. However, some situations can enforce the terms of the non-solicitation agreement depending on several factors, including:
- Did the employee benefit from the non-solicitation clause in any way?
- Does the non-solicitation clause violate Arizona public policy?
- Is the non-solicitation agreement narrow in scope, and does it protect the employer’s legitimate business interests
- Whether the new agreement is reasonable in who the employee cannot solicit.
Non-Solicitation Lawyer Assistance
We review employment contracts before execution. Determine whether they meet your needs and protect your ability to continue in your profession should the agreement terminate. Our firm offers a defense of claims that employees violate a non-solicitation agreement in a new or existing employment contract. Many non-solicitation agreements reach far beyond the protection of a business’s legitimate business interests. Legitimate business interests include client/patient lists, practice policy, intellectual property rights, and trade secrets.
A common defense of a non-solicitation agreement violation is that the agreement is unreasonable in terms of duration and scope. Arizona courts take a more lenient approach when enforcing a non-solicitation agreement versus a non-compete agreement. Courts hold this view because a non-solicitation agreement only prevents employees from soliciting patients. Instead of completely prohibiting the employee from working in their profession, independent contractors and employees. Another common argument is that the patient or employee initiated the contact.
Getting a Phoenix Contract Dispute Attorney
Contact us if you would like to set up a consultation with Chelle Law. Learn more about our employment practice areas and the services our Phoenix Non-Solicitation Agreement Lawyer provides.
Physician Contract Questions?
Contract Review, Termination Issues and more!