South Florida Hospital News
Tuesday October 24, 2017
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September 2017 - Volume 14 - Issue 3

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Non-compete Provisions in Physician Employment Contracts

Florida’s Position on Non-Compete Clauses

In Florida, non-compete agreements and other restrictive covenants are permitted by Florida’s non-compete statute, Fla. Stat. § 542.335, so long as the restriction is supported by a legitimate business interest. Otherwise, an agreement may be found to be void and unenforceable by a court.
 
The statute provides that noncompetition agreements must be in writing and signed in order to be enforceable. Also, when an employee challenges the validity of a non-compete clause, the employer must show the existence of one or more legitimate business interests justifying the noncompete provision.
 
Courts look at both the duration and geographical restrictions of the non-compete agreement. In general, the shorter a non-compete agreement lasts and the limitation of the geographical parameters, the easier it will be to enforce. If the court finds the non-compete to be overbroad, the court may still enforce a less restrictive version, in essence redrafting the provision to fit what it believes to be reasonably necessary to protect an employer’s legitimate business interest.
 
From the Employer’s Perspective
In most instances, the Employer’s goal in demanding a non-compete provision is to impose limitations on where an employee can work after he/she leaves the employer in order to protect confidential information and business relationships with patients and referral sources. These are legitimate concerns for an Employer.
 
In determining whether a particular non-compete provision will be enforceable, one of the first factors that businesses must keep in mind is that the burden of proof is on the employer who negotiated and prepared the non-compete agreement, not the employee who signed it. Employers must be able to prove that the agreement is reasonable and necessary to protect its business interests. Once that is established, the burden shifts to the employee to prove that the agreement is overbroad or not otherwise reasonably necessary to protect a legitimate business interest.
 
From the Employee/Physician Perspective
For the Employee, it is hard to imagine why it would ever be desirable to be subjected to a non-compete provision. The potential disruption in the life of the employee/physician caused by a non-compete provision can be burdensome and take a heavy toll (e.g. having to re-locate your practice outside the restricted area, possibly the need to sell your home and uproot your family, requiring children to change schools and spouse to change jobs). Generally, Employees try to avoid having to enter into a non-compete provision, if possible.
 
Under Florida law, the impact of a non-compete clause on an employee’s future livelihood has no bearing upon the enforceability of the clause. In other words, even if a non-compete clause prevents an employee from earning at his or her potential, that alone is not grounds for arguing that the non-compete clause should not be enforced.
 
Special Rule for Physicians
There is a specific statutory provision (Florida Statute 542.335(1)(g)(4)) that deals with non-compete clauses in the context of medical care. It provides that a non-compete provision may not be enforceable, if the public health, safety or welfare would not be served. For example, if there is a shortage of people in a particular specialty, or in a particular geographic area, then the employer cannot enforce a non-compete, even if all the other requirements are met.
 
Conclusion
Non-compete agreement provisions need to be evaluated on a case-by-case basis. The Employer, justifiably, seeks to protect the legitimate business interests and good-will relationships it has established over time. Conversely, the Employee, also justifiably, seeks to maintain maximum flexibility and freedom in regard to employment options. When considering non-compete provisions, it is prudent to seek legal advice from an attorney well versed in this subject area either before imposing restrictions, as an employer or accepting a new position, as an employee, so that you have an understanding of your rights and obligations.

Cort Neimark, Esq., Partner at Lubell Rosen, can be reached at (954) 880-9500 or cneimark@lubellrosen.com.

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