Orthotown May 2019 - 46

"Certain
obligations can
last for more
years than it took
to become an
orthodontist-and
be financially just
as painful."
orthodontist who ends up in a lawsuit with his employer because he
didn't consult an attorney when they originally signed the contract;
orthodontists are well-educated people with the means and opportunity
to seek counsel, who can create a level playing field before they sign
a contract, and a court will treat them as such.
While negotiating the contract, the goal is to keep the atmosphere
friendly, not contentious. Whether attorneys become involved may
depend on how much leverage the employee has: If the employee
is a recent graduate, it may be wise to have an attorney review
the contract and then have the employee go back to the employer
to renegotiate any problematic areas identified by the attorney.
The attorney can also help keep her client on a reasonable track:
Nitpicking over every provision can be as frustrating to the other
party as a slew of broken braces and bent wires.
A new orthodontist will have less negotiating power and may not be
able to change too much, except for something strongly unreasonable or
unenforceable. If the orthodontist has experience or brings something
of extra value into the practice, her negotiations power is stronger
and it becomes more appropriate for the two attorneys to converse.
Note that just because the associate cannot change a provision,
it doesn't mean it's acceptable to ignore it: An orthodontist could
be held to all of the provisions in an employment contract he signs.
The three most important parts of an associate employment
contract-each with its own set of obligations-are the restrictive
covenant, termination and compensation. Some obligations
will be based on state law, so negotiation space is narrow; other
obligations, based on customary business practices, will have a
wider berth for discussion.

MAY 2019 // orthotown.com

Restrictive covenant/noncompetition
The restrictive covenant actually consists of three agreements:
Noncompetition.
Nonsolicitation.
Nondisclosure of trade secrets.
This article discusses the restrictive covenant only in terms of
noncompetition. That agreement limits an employee's subsequent
job to outside a particular geographic area for a predetermined
amount of time.
Let's say a patient asked you, at the first appointment, if you
could do braces on only the top (or bottom) teeth. Without any
diagnostic information, the answer would have to be, "It depends."
To give an educated response, you'd need an oral exam, radiographic
information and a health and dental history. The answer as to
whether a noncompetition agreement would be enforceable also
"depends" on certain factors.
Each state has its own laws regarding noncompetition agreements, and those laws can include the language restrictive covenant,
covenant or noncompetition agreement. For example, in California,
noncompetition agreements are not valid unless they apply to the sale
of a practice or the dissolution of a partnership.1 According to the
Texas Business and Commercial Code, the covenant not to compete
must provide, in part, for a buyout of the covenant by the physician
at a reasonable price.2 In New Jersey, the court will determine the
enforceability of a restrictive covenant by evaluating three factors:
the extent to which the covenant protects a legitimate interest of
the employer; whether it imposes undue hardship on the employee;
and if its enforcement will be injurious to the public. (The employer
needs to protect its relationship with patients and its investment
in the practice. To determine hardship, the court will look at the
reason the employee left the practice,3 and the likelihood of the
employee finding work outside of the geographically restricted area.
The covenant will be injurious to the public if its enforcement results
in a shortage of specialists within the restricted area.4)
Not only is it recommended that associates find out how their
state court addresses noncompetition agreements, but they also should
consider if the practice has satellite offices. Will the agreement apply
to all of the practice's locations, or only where the associate works?
Another potential negotiation point is how long the associate has
to be employed at the practice for the noncompetition agreement
to be effective. Thirty days? A year?
*
*
*

Termination
As Dr. Lloyd and I spoke, another dentist at our table told
us her story: At a previous job, her contract obligated her to give
60 days' notice if she were leaving. Like most people, after being
hired she put the contract in a drawer and forgot about it. When

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Orthotown May 2019

Table of Contents for the Digital Edition of Orthotown May 2019