Philadelphia Medicine Summer 2019 - 22

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In some states where non-competes are lawful against physicians,
they may be subject to more stringent requirements as compared to
non-competes generally. This is the case in Tennessee15 which allows
non-competes for physicians, but places limits on their duration
(2-years post-employment) and on the restricted geographic area
(county of practice or ten mile maximum from the physician's primary
practice location). In 2016, Connecticut16 enacted a law allowing
physician non-competes, but only if the physician was terminated
by the employer for cause or if the non-compete was entered into
in conjunction with or in anticipation of partnership or ownership,
and further limiting such non-competes to one-year duration and
fifteen mile maximum from the physician's primary practice site.
Texas17 allows physician non-competes, but physicians there must
be allowed to buy-out the covenant at a reasonable price, have access
to a list of patients seen within one year of contract termination and
be permitted to continue treating specific patients for acute illness.

Understanding a Non-Compete
While the landscape seems to be shifting, the continuing validity
of non-competes in most states means they are still a key issue in
physician contract negotiations. As a result, physicians in "valid" states
need to protect themselves and fully understand the impact of the
non-compete included in their contract. This is the case whether the
physician just received a contract for a first position after residency/
fellowship, a new lateral position, renewal of a multi-year contract
or an annual academic appointment letter.
Regardless of the circumstances, the first task is always the same;
that is, to analyze each aspect of a non-compete to enable the physician
to plan and strategize about how to grapple with it. This requires
close examination of the nature of the restricted activity, duration
of the restriction and extent of restricted area.
Language describing a non-compete should be clear and precise
so that an objective determination can be made about where the
physician could work without violating non-compete restrictions.
This is particularly important when thinking about changing jobs
and stepping carefully from one position to the next which can be
considerably more difficult with a vague or imprecise non-compete.
Non-competes that are ambiguous can cause other problems.
One is the potential loss of future employment opportunities because
prospective employers (who often ask to see non-compete language)
may shy away from making an offer so as not to risk provoking a
competitor.18 Another is the potential for personal liability resulting
from a physican's contractual obligation (typically included in most
employment contracts) to pay costs, expenses and legal fees incurred
by the new employer arising from the non-compete.

22 Philadelphia Medicine : Summer 2019

Once the potential impact of a non-compete has been ascertained,
consideration should be given to cogent changes that could be made
and how to go about negotiating them. Changes to be proposed to
non-competes will vary, but the mileage restriction is one which is
often the subject of discussion. In most instances, physicians prefer
that the mileage restriction be reduced. While employers can be
reticent to reduce mileage, curtailing the impact of a non-compete
may be possible by limiting locations to which the mileage radius
applies.19 Ultimately, the revisions requested will depend on the
nature and extent of the non-compete and a physician's personal
and professional circumstances.

Summary
The legal landscape appears to be trending toward more restrictions on non-competes including those applicable to physicians. Yet,
because non-competes remain valid in most states, physicians should
closely review and analyze their non-compete, and consult with an
attorney to ensure they fully understand the potential impact and
attendant risks. *
Karen Davidson, Esq., is a veteran healthcare attorney in Bala
Cynwyd, PA with over 25 years
of experience. Ms. Davidson can
be reached at 610-940-4041,
or karend@kdavdisonlaw.com.

15
Tenn. Code Ann. §63-1-148. The law was originally enacted in 2007 and
amended several times since then. Note if there is no geographic limitation,
the physician could be restricted from practicing at any facility in which the
employer provided services during the physician's employment.
16
Conn. Gen. Stat. §20-14p(b)(2).
17
Tex. Bus. & Com. Code Ann. §15.50.
18
Such challenges could take the form of an allegation of tortious contract
interference.
19
Some examples of limitations the author has seen include limiting the mileage restriction to a physician's principle hospital/office location, locations where
a physician spends more than 20% of professional time, and exclude locations
where coverage is provided on an ad hoc or infrequent basis.

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