Physician thinking about noncompete agreements and if they should sign them
Physician thinking about noncompete agreements and if they should sign them

Noncompete agreements: What to expect and when to sign

Read articles by Jackie Farley
Jackie Farley

Table of Contents

You’ve dedicated years of your life to education and training to become a medical professional, but as you embark on your career journey, you may encounter a new type of hurdle – a decision. Should you sign noncompete agreements?

This document can significantly impact your career options, so it’s not a decision to be taken lightly. It’s essential to understand what a noncompete entails and how it may affect your future. Before you can weigh the pros and cons of signing one, you need to understand what they really are and what you should expect to find in one.

What is a noncompete agreement?

A noncompete agreement, also known as a covenant not to compete or a restrictive covenant, is a legal contract between you and your employer. The purpose of this contract is to restrict the employee from working for a competing business or starting a competing practice for a specified period and within a defined geographical area after leaving their current job.

The pros
  1. Negotiating Power

Some organizations will incentivize signing a noncompete by offering a more favorable compensation package or additional perks, such as signing bonuses or education reimbursement.

  1. Job security

Noncompete agreements can provide job security by limiting the chances of your employer losing patients or revenue to competitors through your departure.

  1. Protection of Confidential Information

Many noncompetes include clauses that protect sensitive company information, patient lists and trade secrets from being used by departing employees.

  1. Clarity

Signing a noncompete can ultimately reduce the risk of potential disputes with your employer down the line by setting clear boundaries and expectations for both parties.

The Cons
  1. Geographical Limitations

These agreements could limit your job options to a specific geographic area. This may make it more challenging to relocate for professional or personal reasons.

  1. Limited Career Mobility

Arguably the most significant drawback to signing a noncompete is the potential restriction on your ability to seek employment in your field, especially if you work in a specialized or niche area.

  1. Loss of Autonomy

Noncompetes can prevent you from starting your own practice or joining a competing healthcare facility. This may hinder any entrepreneurial aspirations you may have.

  1. Uncertainty

The actual enforceability of noncompetes varies by state and jurisdiction. This could add an unwanted element of uncertainty to your career decisions.

 

What should you expect in a noncompete?

Before you sign on the dotted line it’s critical to review the terms of the noncompete agreement, and consulting with legal counsel is necessary. Here are a few elements you should expect to find:

  1. Duration

The agreement should specify the length of time the restrictions will apply. This can range from months to years, so assess how this time frame aligns with your long-term career goals.

  1. Geographical area

You should expect the agreement to outline a specific geographic area in which you will be restricted from practicing medicine after leaving your current position. Consider how this will work with your desired location.

  1. Scope of practice

Some noncompetes may prohibit you from practicing in a specific medical field, so be sure your career ambitions won’t be limited.

  1. Confidentiality clause

Expect clauses to protect your employer’s confidential information, including patient records, research data and trade secrets.

  1. Remedies for breach

Expect to find a section detailing the consequences for violating the terms of the noncompete agreement. These may include financial penalties, injunctions or other legal actions.

  1. Buyout Provisions

Some agreements offer the option to “buy out” the noncompete clause, allowing you to work in a restricted area after paying a specified amount to your former employer.

 

Making an informed decision

 

Before signing a noncompete agreement, consider taking the following steps:

  1. Review the agreement carefully and thoroughly to make sure you understand its terms, limitations and potential consequences.
  2. Consider consulting with an attorney who specializes in employment or contract law and can provide valuable insights. This may help if you feel the need to negotiate more favorable terms.
  3. Don’t shy away from trying to negotiate any terms that seem overly restrictive or unfavorable.
  4. Give a lot of consideration to how this agreement may affect your long-term career goals, professional aspirations and personal life.
  5. Consider potential job changes and relocations and how the agreement will affect your future career prospects. Will signing this affect your goals?

 

The bottom line is this: Noncompete agreements offer both benefits and drawbacks for physician job candidates. Understanding the key elements of these agreements and making an informed decision is vital to ensuring your career path aligns with your aspirations in the medical field.

Read articles by Jackie Farley

Jackie Farley

Easy to Register >> Control your visibility >> 100% free

Take control of your Job Search

Recommended PracticeLink Magazine Blogs

A physician shaking hands with a recruiter in front of a calendar and clock A physician shaking hands with a recruiter in front of a calendar and clock
PracticeLink MagazineSeptember 21, 2023
How to negotiate a flexible schedule
So often in the healthcare industry, physicians learn to cope with grueling schedules that demand their time and energy. Balancing
magnifying glass looking at trends in physician contracts magnifying glass looking at trends in physician contracts
PracticeLink MagazineOctober 10, 2023
6 emerging trends in physician contracts
The healthcare industry is constantly changing and evolving, especially when it comes to the workforce and hiring providers.  In 2023,