Noncompetes and employment law: What should physicians do if asked to sign a noncompete?

Physicians presented with a noncompete agreement should consult an attorney before signing, as state laws vary widely and enforceability can depend on recent statutory changes, court rulings and the specific terms of the contract. Legal counsel can also help physicians who are changing jobs assess existing agreements, negotiate with a new employer to avoid violating geographic or time restrictions, and seek contractual protections such as indemnification if a former employer files suit. Christopher S. Mayer, J.D., an employment law specialist with Frier Levitt, discusses the options available to doctors when seeking a new job.

Medical Economics: Regarding especially physicians who may be young in their careers, or physicians who are considering changing employment, if they sit down at that negotiating table and the hospital or health care system or another group of managing physicians presents to them a noncompete agreement, what should they do?

Christopher S. Mayer, J.D.: This is going to sound very self-serving, but I think they need to consult with an attorney for a variety of reasons. I mean, we just touched upon it, the law in different states is completely different, and a local practitioner, in particular, will know the ins and outs of how they're enforceable in that state, may have appeared in courts recently, where the relevant courts, they can tell you where the judges are on enforcing noncompetes against physicians. You need to get legal advice, for sure, before you sign it. I would say, don't jump into it. Don't be pressured to sign a noncompete before you talk to an attorney. And you may learn that well, maybe it's not enforceable. So sometimes you can tell the employer, well, why are you asking me to do this? It's illegal in the state, or even though they're asking you to sign it, it's illegal in the state, and you don't necessarily need to be worried about it going forward. So those considerations come into play. But also, if you have a noncompete in place already, and you signed it 15 years ago, in particular, the law may have changed. So if you're going to leave an employer to go somewhere else, get legal advice. Again, the law may have changed, or an attorney can negotiate with your new employer.

The new employer can take a look at your existing noncompete and make a decision on how to bring you over that doesn't violate the noncompete. So you can work outside of the restricted area if the employer is large enough, and your attorney may be able to get some protection for you in the contract in terms of being indemnified and protected if you are sued individually by your former employer. So you think you're doing nothing wrong. But that doesn't mean your former employer isn't going to make assumptions that you are violating the noncompete and come after you. And if that's the case, you want to make sure that you're protected by your new employer who wanted you to come over and knew about the noncompete; [you don’t] want them to leave you high and dry in the event of litigation; you want them to protect you.