Millions of physicians have careers and lives that are limited by noncompete clauses, a type of contract covenant that may also be called a “restrictive covenant” or “non-interference” clause. With federal rule changes coming, what impact will these actions have on otolaryngologists in the future?
As tenants of medical office spaces, physicians often create special leasing issues. Medical tenants use hazardous materials, generate biomedical waste, demand confidentiality of patient records and require compliance with occupational safety standards—all unique aspects of the medical profession. Yet, often, physicians will sign “form” medical office lease agreements provided by the landlord without the benefit of legal counsel. Typically, the landlord provides a standard fill-in-the-blank lease form with the tenant’s name and the general business terms (including the term of lease, rental rate and commencement date). Tenants may gloss over the legal boilerplate provisions included in the lease agreement, assuming that these terms are standard to all leases and are not subject to negotiation.
A physician who was recently offered a lucrative position with an otolaryngology practice in his community asked me to review his current employment agreement to determine if it contained any prohibitions against accepting the job. His previous employment contract contained a noncompetition clause that, justifiably, caused him and his prospective employer some concern. As it turned out, in his case, and in many others, the noncompetition clause was not as restrictive as it appeared at first glance. The provision was penetrable and my client joined the new practice with a clear conscience that he was not in violation of his previous contract.