Is this restrictive covenant enforceable?

December 1, 2006

Our employment contract includes a noncompete clause that prevents doctors who quit from practicing within a 25-mile radius of our group for a year. However, the contract doesn't address what happens if we fire someone. If we let a doctor go, can we still enforce the noncompete clause?

Q: Our employment contract includes a noncompete clause that prevents doctors who quit from practicing within a 25-mile radius of our group for a year. However, the contract doesn't address what happens if we fire someone. If we let a doctor go, can we still enforce the noncompete clause?

A: No, because your contract's language doesn't specifically state that the restrictive covenant applies when a doctor is fired. It only addresses what happens if he quits.

If your practice wants to add such a provision to the contracts currently in force, you'd have to write an appropriate agreement that would bind the doctors to submit to the restrictive covenant if they're fired. But since they'd be giving up a right they have now-to stay in town and practice-your group would have to "purchase" this new restriction. That means providing a substantial employment benefit (a bonus or more vacation, for example) for the doctors who are willing to sign the new contract.