Physician’s Noncompete Agreements
Employers regularly use noncompete agreements to protect their legitimate business interests. When hiring employees, employers want to restrict employees from approaching customers or working for competing companies within a certain location, for a certain duration of time. Employees routinely argue that they have a right to work and employers are unjustly infringing on their right to work. This is true for physicians.
Physicians are commonly bound by noncompete agreements. In fact, noncompete agreements are more prevalent in this profession because of increased mobility and frequent employment changes. It is often easier for a physician to join an already established practice than to start up one’s own practice. Physician employers often require noncompete agreements or restrictive agreements in employment arrangements. These agreements restrain physicians from building competitive medical practices within a certain geographical region for a certain period of time. Additionally, it is common to see noncompete provisions in partnership agreements and in purchase and sale agreements of medical practices.
Noncompete agreements or restrictive covenants have negative impacts on physicians. Such limitations can require a physician to relocate to practice outside the noncompete agreement’s geographical radius. These limitations and doctor-patient relationships, have led to discussions about physicians having the same freedoms as lawyers from restrictive covenants. Because of the confidential lawyer-client relationship, the Florida Bar disfavors these types of agreements to protect the lawyer-client relationship.
Under Florida Statute §542.335, courts are more forgiving of physicians when deciding to enforce noncompete agreements. Because these agreements tend to disrupt the doctor-patient relationship; Florida courts tend to partially enforce the physician noncompete agreements to help protect the doctor-patient relationship and allow for the patient to receive continuous medical care.
Access to medical care is a significant public interest. Florida’s Third and Fourth District Courts have modified limitations placed on physicians favoring public interest over the employer’s legitimate business interest. In Open Magnetic Imaging Inc. v. Nieves-Garcia, 826 So.2d 415 (Fla. 3d DCA 2002), the Third District held that a noncompete for the entire tri-county area was too great a burden for a physician only working in Miami Dade. While employed, Nieves-Garcia created a database that included names of physicians, types of practices, information regarding their referral patterns, preferences and which insurance they accepted. The Third District determined that this database was a legitimate business interest, and remanded the trial court to modify and narrow the restrictive covenant.
Limitations have also been narrowed against a physician in favor of continuing care of patients. Litwinczuk v. Palm Beach Cardiovascular Clinic, L.C., 939 So.2d 268 (Fla. 4th DCA2006). In Litwinczuk, a doctor stopped working at a medical clinic and opened his own practice four blocks down the street, violating his, noncompete which restricted the doctor from practicing in Palm Beach County. The trial court determined that including all of Palm Beach was unreasonable and reduced the area to the southernmost boundaries of the City of West Palm Beach north to the Martin County line. The Fourth District upheld the trial court’s ruling to limit the geographical area in the noncompete to the “region in which the clinic had a legitimate business interest to protect.” In addition, Florida courts have determined it is not a violation of a noncompete agreement for a physician to advertise or announce their new location, because patients should be allowed to follow their doctors to their new practices. Lotenfoe v. Pahk, 747 So.2d 422, 424 (Fla. 2d DCA 1999); King v. Jessup,698 So.2d 339, 341 (Fla. 5th DCA 1997).
If you are a physician subject to a noncompete agreement or restrictive covenant, or a member of a medical practice seeking to enforce such a provision, please contact the lawyers at Kahn & Resnik, P.L. Our lawyers proudly serve all of Florida and will fully represent your legal needs. Call us now at 954-321-0176 to set up a consultation.
