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Non Compete clause

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14 years 6 days ago #20105 by doctorhope
FPTX--you will prevail!

Sorry if the following message is cryptic and hurried. It's midnight and I have clinic tomorrow but I saw your plight and feel the need to answer this right away because this is a very serious and unfortunately common issue.

After residency I worked at a high-end high power private practice in a BIG, COMPETITIVE CITY. Two of my colleagues, both young, left the practice to start their own--because they were unhappy with how terribly run our practice was. Both were guys, one with an MBA from a top Ivy league business school, and another with a family of lawyers. I really admired their entreprenuer spirit, and thought that they would do great.

Not so. A few weeks into the practice, they were hit with some legal paper saying that the prior employers had brought on a for breaking non-compete clause. In fact, the judge allowed a temporary measure that immediately shut down the practice in its entirety. They were able to overturn that and resumed practice, but the employers persisted and my friends were sued for breaking the contract regarding non-compete clause and non-solicitation clause, for taking medical records, for soliciting patients. My friends had to counter sue, and defend themselves. The total cost in lawyer's fee was well above $100,000. They are still in practice, but have to pay this terrible misfortunate and is still not breaking even as we speak. Obviously this is not to be taken as exact legal advice, but it serves to point out some concepts that are universal.

The biggest lessons they told me are the following.

1) Before you leave, figure out an exit strategy with your lawyer. This is the single most important advice they gave me.

2) Do not sign any legal documents without consultation with a lawyer.

3) Even if non-compete cluase is un-enforcible--ie you ultimately win--you may spend lots of money defending it.

4) How you handle the situation depends on where you go afterwards. If you are going to another hospital's sponsored program, the first hospital may be less likely to mess with another hospital. But if you go on your own, they know that they can mess with you.

I don't mean to scare you. Once again, instead of learning about the sphengoid-pyletine nerve out of a skull in medical school, we should have also learned how to read and negotiate a contract--but didn't.

Everyone is right. Each one of us has to be our own advocate--that's our job. I no longer see it as an evil thing, and I don't bemoan how people don't advocate for me, etc etc etc. This is actually a liberating realization. When my employer is advocating for him/herself, I stand right up there to advocate for my interest, and I am the usually the least senior of all people. I see guys advocate for themselves all the time!

I read that the CEO of Virgin Atlantic said that the best piece of advice he's ever gotten was "don't be afraid to make a fool of yourself, and if someone mess with you, sue the bastards."

You're right. Our most economically valubale asset is our relationship with our patient. The non-compete clause puts a damper on things. On the other hand, looking at the employer's perspective, he/she has put in hundreds and thousands of dollars, and years of referral base to built this practice that allowed you to come in to work, and it would be a real economic disadvantage for them if you were to take away the patients. I can see why this clause was created. It's like an employer of Berger World leaves after she learns the trade secrets/customer demographics, and then opens up Berger Land right across the street--after Berger World has invested initial capital, manpower, and business risks to successfully open its business.

So my point is EVERYONE has to advocate for themselves, and the best way to do this wisely is with a lawyer's help. And, you want a lawyer who is versed in health care, contract negotiation law.

Best of luck to you--continue to write and we'll support you with our collective knowledge.

Oh, the other thing to figure out in the exit strategy is how you are going to handle the tail portion of your malpractice if you have claims-made policy. But that's a whole different story.

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14 years 5 days ago #20106 by txfp
thanks ya'll. yes, I'm in Texas!
The precident in Texas seems like it can go either way. There are 4 requirements that need to be met for it to be valid, and mine has 3. It did not have a buy-out clause in there already. Wiggle Room.

The healthcare attorney I have been talking to thinks I may have a chance if I start while I'm still employed there. I really don't want to deal with the situation doctorhope wrote about. Way too stressfull for my full plate.

My practice had a spiritual moment yesterday while in an interview for an article being written about women and medicine (we are 4 women in practice). The physician-hood model of medicine etc. After telling this young female writer (no bags under her eyes BTW!) all the things we do to stay in medicine, pay bills, stay current, try not to get sued, stay married, make it to daycare on time, feed your family a somewhat balanced meal everyday, run a business, and maybe try to exercise if we still have energy, I think she got it!. We all got our batteries charged after that, and feel like if we stick together, things may turn out better. Get out of being an employee, and actually go up to bat with this big hospital and win! Our sisterhood got a pat on the back, right when we really needed it. It was nice.

I did form my PA yesterday (super easy online form, $200)!!Felt sooo good.
I plan to start getting credentialed in parallel to my current tax ID, etc (sneaky) and then when I break away, have a seamless transition in that aspect. I think us women are good at that forward planning strategies.

Stay tuned, I'll keep ya'll posted.
TXFP

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