Fort Lauderdale competition lawyer Jonathan Pollard recently weighed in on physician non-competes in a Modern Healthcare article.
A reputable source in healthcare business news, Modern Healthcare reaches 70,000 readers weekly. The article explored the recent increase in physician non-compete disputes.
According to a 2016 U.S. Department of the Treasury report, nearly 40 percent of American workers have signed a non-compete agreement upon employment. In 2013, the Wall Street Journal reported that the amount of non-compete litigation in U.S. courts has risen 61 percent since 2002. With a growing amount of litigation over non-compete agreements, physician non-compete disputes have become commonplace in jurisdictions where such agreements are legal.
The article presents the case of Rhode Island gerontologist Dr. Shahzad Khurshid. Dr. Khurshid signed a non-compete agreement upon his employment with Medicine and Long Term Care Associates, a healthcare provider that offers medical services to retirement centers. Under the contract, Khurshid agreed not to solicit the practice’s employees or patients for two years following the end of his employment.
However, several former clients decided to leave the practice along with Khurshid, who continued to work with the retirement center’s patients after his employment ended.
When practice sued in state court, the court sided with Khurshid. The court ruled that the public interest in protecting patient choice outweighed the benefits of the non-compete agreement.
The article included Pollard’s comments, which reiterate that non-compete disputes have significantly increased in the last 15 years. Pollard described market dynamics in the healthcare sector that have led to an increase in non-compete litigation within that industry in particular:
“You have these big systems going around gobbling up smaller practices, and these larger systems are several things. No. 1, they’re very well capitalized. Two, they’re lawyered up. Three, they’re going to protect their interests by any means necessary.”
Because non-compete laws vary by state, some states may exempt specific professions. In fact, physician non-compete agreements are the most common exemption because such restrictions interfere with a patient’s right to choose his or her preferred physician.
For example, Rhode Island and Connecticut have recently enacted statutes that restrict non-compete language in physician contracts. As of July 16, 2016, any restriction on an individual’s right to practice medicine is unenforceable in the state of Rhode Island. Physician non-compete agreements are also void in New Mexico, where doctors can compete in the same area as their former practice as long as they do not solicit patients. Other states, like California, ban non-compete agreements altogether because as illegal restraints on trade.
However, the vast majority of states allow physician non-compete agreements in some form or another. Florida, for example, is among the states that allow physician non-competes. As an aggressively pro non-compete jurisdiction, Florida courts routinely enforce non-compete agreements against physicians through issuing preliminary injunctions. State courts regularly enforce physician non-competes, banning doctors from practicing in certain cities or even regions.
To go a step further, Florida courts have adopted their own meaning of solicitation in the non-compete context. In a physician non-compete case, they would define solicitation as the physician having any contact with a patient, regardless of who initiated that contact.
The upshot: Non-compete law varies dramatically from state to state. And laws governing physician non-compete agreements are no exception. Any physician faced with a non-compete dispute or potential non-compete dispute should seek competent counsel who have significant experience in this arena.
Jonathan Pollard is the principal of Pollard PLLC, a Fort Lauderdale litigation boutique focused on competition law. The firm has extensive experience litigating non-compete and trade secret cases and has won appeals in state and federal appellate courts. They routinely represent clients throughout the state of Florida and beyond. For more information, call 954-332-2380.