Restrictive Clauses Can Create Disputes for Medical Practice Groups

One of the challenges facing physicians who have joined a group practice – and facing the group itself is the area of “restrictive covenants.” There are primarily two covenants our experienced attorneys at Lubin Austermuehle typically deal with: non-compete agreements and non-solicitation agreements, though we’ve also had vast experience handling non-disclosure agreements.

Restrictive covenants have been around for decades, but insistence on their appearance in medical practice agreements has increased along with a more competitive environment in the business world and the desire for protection of patient turf. Whether covenants signed by a previous partner in a medical practice are enforceable, seems to be of some question. One thing, should not be in question, however, is the need for an experienced litigation attorney to help you navigate the complexities of restrictive covenants for maximum protection. May we humbly suggest the services of our firm, Lubin Austermuehle, with innumerable litigation successes under our belt, especially when it comes to non-compete and non-solicitation agreements.

This important agreement restricts your ability as an employee -- particularly if you’re left the practice -- to compete with the medical group practice for the same business. This generally covers a specified time period like one year, but you have to read these agreements with a lens magnified by the wide-open eyes of our eagle-eyed lawyers at LA.

There’s a flip side here regarding non-compete agreements because individuals also have a right to work where they want and to make a living as a productive earner in society. So, as noted, the jury (and judge) are sometimes out when it comes to enforcing decisions. To help with a decision, state courts usually consider four factors:

1. The nature of business being solicited and whether there’s a legitimate conflict of interest.
2. Where the competitive business is located and the proximity to the business issuing the complaint.
3. The length of the restricted covenant.
4. The exact nature of the business covered by the restrictive clause.

If you’ve left a medical group practice and try to entice some of the practice’s clients to use you, you could be in direct violation of the non-solicitation agreement you signed. The purpose of that agreement, of course, is protecting the business interests of the employer. As to the law’s legitimacy and enforceability, we’ve learned at Lubin Austermuehle that you can push back against these covenants. In fact, the AMA Code of Ethics is against restrictive covenants as stated in the AMA Code of Ethics, Opinion 9.02:

“Covenants-not-to-compete restrict competition, disrupt continuity of care, and potentially deprive the public of medical services. The Council on Ethical and Judicial Affairs discourages any agreement which restricts the right of a physician to practice medicine for a specified period of time or in a specified area upon termination of an employment, partnership, or corporate agreement. Restrictive covenants are unethical if they are excessive in geographic scope or duration in the circumstances presented, or if they fail to make reasonable accommodation of patients’ choice of physician.”

The AMA also believes that a physician who leaves a group should notify his or her patients as soon as possible after leaving the group.

One thing is clear, much is muddled and up to interpretation, which is why you need the expertise, counsel and litigation skills of the Lubin Austermuehle legal team. Talk to us. Whether you’re a departing physician, or you represent the interests of a medical practice, we should have a frank AND FREE discussion regarding your individual situation and needs. Contact us now to talk and see if our belief in results and relationships results in a good fit for you.