To Compete or Not to Compete?

1221952_to_sign_a_contract_3As a business and healthcare litigation firm focused exclusively on advising and representing health care providers, we work virtually every day with contracts that involve non-compete agreements and other forms of restrictive covenants.  Almost all physician employment, for example, will involve a physician employment agreement that contains a restrictive covenant.  Typically, a restrictive covenant will apply to prohibit certain competitive activities both during the employment and for some agreed period following employment, often one to three years.  The details of such agreements can vary dramatically and, contrary to the impressions of many medical practice owners and employed physicians, there are not “standard” provisions for duration, geographic scope, etc.  Further, Georgia and South Carolina case law and relevant statutory provisions are subject to interpretation, about which reasonable minds can often differ.

As a healthcare law firm, we are exposed to agreements on the transactional end, when the parties get married (i.e., when they sign the contract), and when they divorce (i.e., when the employment ends).  If a non-compete issue is raised at the end of the relationship, the implications for employer and employee can be severe and, in unfortunate cases, devolve into litigation.  For a highly compensated physician, whose ability to ply his/her trade following many years of education and training is suddenly impaired by the signed contract, whether to proceed with certain employment opportunities (that might violate a non-compete agreement) can make for a highly stressful decision-making process.  Some factors that physicians may consider follow.

Should you determine if the non-compete agreement is enforceable?

While it is certainly helpful to have informed legal analysis of such a contract’s legal enforceability, the answer to the enforceability question may not be the most critical detail in many situations.  Other, more practical, considerations may actually trump in importance proper legal analysis of the contract.  In most (if not all) litigation situations, hard and fast answers about the enforceability of a non-compete agreement are hard to come by.  What may seem to be a clear “yes” or “no” type of legal answer to a question posed in hypothetical, pre-suit circumstances, will often blur and take on less certainty when skilled lawyers dig in and refine the legal issues raised by specific facts.  (In our practice, it is certainly rare that any non-compete agreement is not arguably imperfect in some way and subject to a legal challenge. Likewise, it is rare that an employee can count on having a lay up in his/her argument that a non-compete is unenforceable.)   The point is, there will always be two sides of the “enforceability” argument and an unknown outcome about how a given judge facing particular presentations by opposing counsel on the record evidence presented, will view the non-compete and decide the outcome.

Focus on practical considerations.

So, while the legal assessment of the non-compete agreement’s enforceability should be considered, far more important (in most cases) from the employee’s stand point are practical considerations.  For example:

  • If the employer files suit with a motion for a temporary restraining order and a hearing is scheduled, can the employee tolerate the considerable legal expense immediately in the case to defend the case?
  • If litigation occurs, will it adversely impact the employee’s employability?
  • If the employer threatens or files suit, will the employee’s new employer be supportive or intolerant of the chaos that can attend a lawsuit?
  • If the employer files suit, how will the employee handle the stress of the litigation?
  • Are there other career opportunities that present a better option for the employee without the risks associated with an alleged violation of the non-compete agreement?

It is important to review these types of issues with your lawyer in deciding whether to proceed with employment that arguably might violate a non-compete agreement.

 

Georgia and South Carolina Physician Non-Compete Lawyers

 In our Georgia and South Carolina based law firm, we represent many physicians and medical practices regarding employment issues, including restrictive covenants. If you have questions about this post, contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may learn more about our law firm by visiting www.hamillittle.com

 

 

**Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.