Can a broken promise negate a noncompete?

January 18, 2008

My employer reneged on his promise to offer me a partnership after three years as an associate. Instead, he offered me a productivity bonus, and I accepted it. For the next four years I stayed with the practice, and now I want to find a new job. Am I still bound by the original noncompete agreement I signed when I joined the practice? It says I can't work in the area for two years after I leave.

My employer reneged on his promise to offer me a partnership after three years as an associate. Instead, he offered me a productivity bonus, and I accepted it. For the next four years I stayed with the practice, and now I want to find a new job. Am I still bound by the original noncompete agreement I signed when I joined the practice? It says I can't work in the area for two years after I leave.

Perhaps. It depends on the answers to these three questions:

(1) Putting the partnership promise aside, was the original noncompete agreement reasonable? If you can show it wasn't-in terms of the time or geographical restrictions placed on you-a court or arbitrator may rule that you're not bound by it. In that case, you win; the partnership/bonus matter is irrelevant.

(3) Did your employer breach the original contract when he failed to offer you the partnership? If you can show that he did, you can argue that he shouldn't be allowed to benefit from the agreement's other provisions, like the noncompete. However, most contracts state that an offer of partnership is at the employer's "sole discretion." In other words, he has the right not to make the offer without a breach of contract. Moreover, you may have undermined your breach-of-contract case by accepting the situation-and the productivity bonus-for the past four years.

In this issue, the answers to our readers' questions were provided by: Barry B. Cepelewicz, MD, JD, Meiselman, Denlea, Packman, Carton & Eberz, White Plains, NY; William H. Maruca, Esq., http://www.foxrothschild.com, Pittsburgh; Kathryn Moghadas, CHBC, Associated Healthcare Advisors & TopCat, Fern Park, FL.

Send your practice management questions to: PMQA Editor, Medical Economics, 123 Tice Blvd., Woodcliff Lake, NJ 07677-7664, or send an e-mail to mepractice@advanstar.com (please include your regular postal address).

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