Restrictive practice covenants growing increasingly common

January 25, 2013

Altough they can be a pain, restrictive covenants are becoming the norm in many practices.

Q: I am considering moving to another state to accept a position with an internal medicine group. The proposed contract includes a restrictive covenant that prohibits my practicing medicine within 10 miles of any of the group’s offices should my employment terminate, even if I am fired without cause. Should I refuse to sign the covenant?

A: Although it makes sense to try to minimize restrictive covenants, if you refuse to sign it, you risk having your employment offer rescinded. The purpose of the restrictive covenant is to protect the practice by denying you the ability to compete and take patients and referral sources. Such provisions have become increasingly common. And although you may have read or heard that such provisions are not enforceable, in most states they are as long as they are reasonable in time, duration, and scope.

The author is a tax attorney in Norristown, Pennsylvania, and a Medical Economics editorial consultant. Send your money management questions to medec@advanstar.com. Also engage at www.twitter.com/MedEconomics and www.facebook.com/MedicalEconomics.