“Thou shalt not steal”: understanding nonsolicitation covenants

About to start at a new practice? While you have every intention of staying two or three years, which is the standard life of a contract, all good things must come to an end. Perhaps the thorniest issue you will encounter in signing contracts is the “non-compete clause” that may prohibit you, once you leave, from directly competing with that practice for a set period of time and within a set geographic radius.

One provision in non-compete clauses is the prohibition against soliciting patients in your current practice by asking them to follow you to your new one. “Although non-compete clauses are generally illegal in California employment agreements, solicitation of patients can be considered unfair competition or solicitation,” says Steven L. Simas, Esq., founder of Simas and Associates Ltd., a health care law firm in Sacramento and San Luis Obispo, Calif.

Soliciting patients consists of a wide range of activities, notes Mr. Simas. It includes e-mailing or calling patients, using the medical group’s patient lists, or otherwise making contact with patients to notify them of your impending departure or inform them of your new practice. “By doing so,” he says, “you risk getting sued for diversion of property or unfair competition.”

Telling patients you’re leaving, therefore, can be tricky. If you have a relationship with patients, you don’t want to blithely ignore the fact that at their next visit, you’ll be gone—and patients might feel abandoned and disrespected. But, on the other hand, telling them you are leaving naturally leads to this question: “Doc, where are you going?”

“You’re walking a tightrope regarding the balance between informing your patients and ‘solicitation,’ ” says Dennis Hursh, JD, managing partner of Hursh and Hursh PC, a law firm in Middletown, Pa., that focuses on physician-related legal issues. Mr. Hursh is the author of The Final Hurdle: A Physician’s Guide to Negotiating a Fair Employment Agreement.

The way to avoid that awkward situation with patients is to include some verbiage in your contract about how patients will be informed in the event of your departure, Mr. Hursh says.

The best scenario would be a detailed clause in the contract covering whose responsibility it is to notify patients (the physician’s, the medical group’s or both); the exact language of the notification; who is responsible for the costs of notifying patients by mail, if relevant; what is considered “solicitation” of patients; and how much information about your new location will be divulged to patients who inquire.

“It would be ideal if all of these details were specified in the contract, but that’s highly unusual,” notes Mr. Hursh. “What can more easily be negotiated into the contract is the inclusion of language that calls for a notification process that is ‘mutually agreeable’ to the practice and departing physician.”

All of this can seem very discouraging to physicians who wish to retain a relationship with longstanding patients or who find it daunting to strike out on their own without an established patient base. But don’t worry, says Mr. Hursh. There are no restrictions against advertising your new practice.

“In today’s Internet-oriented society, it’s easy to track people down,” he says. “If you have patients who would like you to continue treating them, it won’t be hard for them to find you.”