Other Limitations in Your Contract
In addition to noncompete and nonsolicitation clauses, restrictive covenants and other parts of the contract can include more limitations that make it hard for physicians to leave their jobs.
Confidentiality clause. This separate clause in the covenant prevents departing doctors from taking "trade secrets" with them. It doesn't cover charts, which belong to the patient, but it does cover lists of patients. It also includes business plans, marketing strategies, and pricing information, but these items usually apply to physicians in management, and not to those just doing clinical work, contract attorneys say.
Buy-out option. Rather than having to give up one's new job, this option allows the departing physician to pay a lump sum to be freed from the restrictive covenant, such as a year's salary or more. However, courts have ruled that the amount must have some relationship to real damages to the employer, and not serve simply as a penalty.[17]
Loser pays attorneys' fees. If your case is litigated, this provision obligates the loser to pay some or all of the attorneys' fees of the winner. Because one side's attorney's fee can easily exceed $10,000 without even going to trial, this provision can be a powerful disincentive against breaking the covenant.
Forfeiture of benefits. This provision, used in North Carolina, forces the physician to forfeit certain post-termination benefits, such as retirement, severance, or salary continuation benefits.[18]
Should You Negotiate Before Leaving?
You should try to renegotiate the terms of your restrictive covenant before you leave, according to Adler, the Illinois attorney. "Ask [your employer] whether the contract could be changed, and even whether they intend to enforce it," she says.
To change the contract, "find out other side's pain points and work out a plan to meet them," she adds. For example, academic medical centers (AMCs) are sometimes only concerned if you were to work for another AMC, she says.
In some cases, however, Adler says it might not be a good idea to let management know you want to leave. In small partnerships, for example, "emotions can run high when you tell them you're leaving," she says.
Eckerle says the key to negotiating before you leave is to present a plan that addresses the organization's main fear: that you would work for a direct competitor or take a lot of patients with you. To answer this concern, you might negotiate a carve-out allowing you to work at the VA, for example, or they might agree to reduce the radius to accommodate the site you want, she says.
But Eckerle acknowledges that most employers simply won't back down. Even if you have a good argument, they don't want to send a message to other employees that they can get out of covenants.
Adler is experiencing an employer's refusal to negotiate in a current case involving a physician who would like to leave a health system in Florida. Adler says the physician would have a good case if she went to court, and she is offering to pay her employer 2 years' worth of wages to set aside the restrictive covenant. But the employer is refusing to budge.
"They seem to want to scare her into absolute compliance," Adler says. Health systems in particular often don't want to negotiate, because "they have lawyers on staff and it doesn't cost them anything to go forward," she says.
Cassidy, for his part, thinks negotiating before you leave is basically futile. "You're stuck with what you signed," he says.
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Any views expressed above are the author's own and do not necessarily reflect the views of WebMD or Medscape.
Cite this: Leigh Page. Can You Break a Noncompete Agreement? - Medscape - Nov 19, 2018.
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