Litigation over medical non-compete agreements raises concerns

On Behalf of Dunlap Fiore, LLC |

Finding a good doctor can be both a challenge and a blessing, as Baton Rouge residents may know. A rising trend of litigation between medical professionals has some wondering whether certain common contract provisions should be upheld as valid instruments of employment law or struck down as a violation of patients’ rights to visit the doctor of their choice.

Especially in urban areas, employment litigation over non-compete agreements finds doctors facing off against other doctors in turf wars over patient service areas. In one case, for example, a urologist has filed suit against a former partner to enforce terms of an agreement that prohibits the doctor from practicing at any hospital within six miles of the original practice for three years.

Another case finds an obstetrician headed into litigation with her former employer after the parties failed to reach a mutually acceptable agreement through negotiation. The litigating practice owners maintain that non-compete agreements and enforcement of the agreements are necessary to ensure the stability of area medical practices.

Proponents of enforcing non-compete agreements in the medical profession claim that the risk of losing even a fraction of established patient relationships jeopardizes the continued existence of even the smallest of practices. On the other hand, opponents say that non-compete agreements not only inhibit patients’ choices but interfere with the opportunity for medical professionals to make a living.

While both sides of the debate raise valid points, their concerns may be somewhat overstated. As a general rule, courts will attempt to strike a fair balance in the enforcement of non-compete agreements based upon the reasonableness of restrictions in time, scope and geographic area. A non-compete agreement that fails the test of reasonableness may be invalidated in its entirety, so employers considering the use of non-competes will want to consider seeking professional consultation to ensure reasonable construction.

Source: Crain’s Chicago Business, “Non-compete clauses pit doctor against doctor,” Claire Bushey, Oct. 4, 2012