Nurse Becoming Ep.099 - Non-Compete Clauses - What You Need to Know
2:32PM Apr 5, +0000
Speakers:
Amanda Guarniere
Keywords:
non compete clause
contract
states
nurse practitioners
radius
leaving
hear
non compete
employer
practice
termination
terms
red flag
termination clause
specialty
terminated
mile radius
employee handbook
fair
advice
Hello, hello, welcome back to the Nurse Becoming podcast. It's your host, Amanda Guarniere. Thanks so much for joining me today for this discussion about non compete clauses. I definitely hear a lot of, I don't want to say angst, I want to say confusion, concern, trepidation, from specifically nurse practitioners and new NPs, when it comes to non compete clauses, there is some advice that circulates, that may not be the best advice out there. So what I'm going to do today is really break down for you what a non compete clause is, as well as really what you should be considering in terms of deciding what is fair and - and what is okay to proceed with, with - with a non compete clause. So let's dive right into it. You know, I have to give you my disclaimer, I'm not an attorney, right. This is an educational information episode geared towards nurse practitioners. Because you as NPs are going to most commonly are more commonly going to be seeing non compete clauses in your contracts compared to nurses. This isn't as common, I'm not saying that it doesn't happen, but it's not as common among RNs as it is among advanced practice providers. So before we go into breaking down what a non compete clause is, I do want to remind you about what your employment agreement might look like. And I want to remind you that not all employers utilize multi page legal contracts for employment. Some organizations, especially hospitals, tend to utilize the employee agreement letter, which might be a single page with your salary and your job duties, and all the other benefits might be defined by an employee handbook or other supplemental document, okay? And in most states, if you're signing an employment agreement, you're likely under what's called at will employment, meaning that you can leave your job at any time without legal ramification. And conversely, you can be terminated or laid off at any time without cause. Now, when contracts are used. And just to be clear, neither of these is right or wrong. I've worked in multiple positions over my career, and I would say it's probably been split half and half between working for organizations that utilized an employment letter plus their employee handbook, versus more private practices that used multi page legal contracts. So it's good to understand the difference. And it's not necessarily a red flag one way or the other. Okay. Now, when contracts are used, they are typically multi page legal documents that outline a variety of terms of employment, including the length of contract, job duties, hours, benefits, term, and termination. Now term and termination means how long the contract is in effect for and under what conditions the contract can be broken or terminated. So for example, the termination clause in a contract may explain that the
employer could terminate the contract based on poor performance, reduction in force or for no reason at all. But all of that should be outlined in the contract, including if you wanted to break the contract. For example, if - if it's a one or two year contract, and you wanted to leave before then if you wanted to leave the job before, then the term and termination clause would outline the circumstances that would need to happen for you to do that, right. So it might be as simple as you need to give 30 or 60 days notice, or in more severe circumstances, there might be some sort of repayment situation that's a red flag, by the way, if they want payment in exchange for you leaving before your contract. I wouldn't recommend getting into that type of agreement. But all this to say that the term and termination outlines how long the contract is and under what circumstances the contract can be broken, okay? Now, occasionally, in addition to the term and termination clause, there might be a non compete clause, which is what we're talking about more today. And a non compete clause is a section that states that the employee i.e. you will not work for a competing organization or start a competing practice within a certain radius, so a certain mile distance for a certain amount of time after leaving the employer, okay? So a non compete clause says that the employee you will not work for a competing organization or start a competing practice within a certain radius for a certain amount of time after leaving the employer, so after termination of the contract. Now, non compete clauses are typically in place to help discourage employees from leaving quickly, or from leaving and taking patients with them. And - and this happens, this is common, it's common enough that these non compete clauses exist. Okay. So if we're going to really dive into non competes, I want to first say that non compete clauses are not inherently bad, okay, you will hear recommendation from other people, other NPs, or mentors never sign a compete clause is what they may say. And, you know, I don't really like to use the term never or always. And so I want to point out that non compete clauses are not inherently bad. Okay, they typically are in place to serve the best interest of the employer, because like we said, It's to prevent kind of lost revenue from people leaving very, very quickly, or loss clientele from people leaving and also taking patients with them. And you know, if you're a reasonable person, you can understand why an employer would be concerned about that. So while they are in place to serve the best interests of the employer, that doesn't mean that you should never sign one. So let's kind of break down what's fair, when it comes to a non compete. I think that in terms of the certain amount of time, because remember, we're talking about radius, and certain amount of time. So if the certain amount of time is two years or less, I think that is a fair amount of time for an otherwise fair non compete clause. And so really, you know, what you want to look into first is the radius and also what they say about the the specialty or the area of practice. So the mile radius should really depend on the location that you're in. And a great example is Washington DC that I heard Monica Carter, talk about this, she teaches about NP compensation, and she's given this example before of Washington, DC, Washington DC is a 10 mile radius, like the actual District of Columbia, just 10 miles, right. So if you are practicing in DC, and you signed a non compete clause that says, you know, whatever the other terms and the radius is more than 10 miles, you'd have to actually be licensed in other states in order to practice whenever you leave that position. And that's not fair, that really creates an incredible burden on you to approve your license uproot your - your life potentially, to find another position. Or another example, if you're in more of a rural area, if the radius that is provided means that you'd have to move in order to find any other place to practice, that is really not fair to you as the employee. So those would be terms that I would recommend trying to negotiate. The other thing that non compete clauses may or may not state is the type of practice setting. So let's say you're, you know, you get a job in a fairly narrow specialty, let's use long term care, for example.
So the non compete clause might say that you cannot work at another long term care facility within an X mile radius for X amount of years. And it's up to you to decide, okay, if I see myself leaving this job, am I comfortable with the fact that I'm either going to have to go outside of this radius, or stay within the radius and look for a job in a different area of practice? And that's really up for you to decide, and based on your competency and your NP specialty, okay? Because let's say you are in a really narrow focus, like, let's say you're a women's health nurse practitioner, and you don't have any other certifications. And the non compete clause says that you you can't practice within that specialty. Well, that really eliminates a lot of opportunities for you and can be potentially over restrictive. Okay, so you want to take all these things into account, some red flags to look out for in non compete clauses, like I just mentioned, if the non compete states that you cannot practice in the specialty that you are certified in, that has the potential to be overly restrictive, depending on the radius, okay? Another thing that I really want to point out that I didn't think about much until we went through COVID is that this is a red flag if the non compete stet says that it applies if there's a termination of the contract for any reason. If it says that I highly encourage you to try to get that had amended, because that would mean that they could enforce it if they terminated your contract. So for example, if they fired you, if they laid you off because of staffing, okay? I think about how many nurse practitioners were laid off during the pandemic. Spoiler, it was a lot because there was such a drop in non essential surgeries, non essential care, plenty of people pushed out routine health maintenance, because you know it for so long, we just weren't going anywhere, right before vaccines, we were, you know, really being ultra conservative with the care that we were getting. And that resulted in a lot of practices, saying, well, we we don't have as many patients as we had before. So we need to lay off some staff and a lot of those staff were nurse practitioners. So I think about a scenario like that. And if those NPs were under a non compete clause that said, all these things were in place, if there was termination, for any reason, how fair is that? You know, it's not the NPs responsibility or issue that staffing didn't support their position? So why should there be any restriction on where they can go and work next, right, that just doesn't make sense to me. So I really encourage you to look for the - the kind of definition of termination that this non compete clause applies for. You know, it makes sense that if you are going to leave, if you are quitting, or you know, you're resigning for any reason, you know, it is fair that there could be some restrictions on where you're going because of that risk of you taking patients with you, right? But on the flip side, if they're, you know, terminating you or laying you off, those restrictions really shouldn't be enforced, in my opinion. Now, there are some states where non compete clauses are generally not enforceable for certain professions. And, you know, again, the disclaimer that I'm not an attorney, so you certainly want to check with someone who has official legal training. But the research that I did, basically have a list of, of where non compete clauses are enforceable and where they're not. And some of them have some, I don't want to say wishy washy terms, but like, for example, there are some states where it says that they're not enforceable for physicians, but I don't know if maybe that extends to providers as well. But from the research that I that I did, these are the states where
non compete clauses are generally not enforceable for certain professions, likely, including nurse practitioners. So those states are Alabama, California, Colorado, Maryland, Montana, North Dakota, Oklahoma, and Oregon. And like I said, there are other states where physicians are exempt from non compete clause enforcement. So, you know, you would want to kind of look into that and clarify that a little bit more, you know, regard- depending on the state, where you are working in, be sure to do your own research, speak with your own legal counsel, should you need that type of advice, because, as always, this is for educational purposes, I don't provide medical, legal or tax advice. I'm not qualified to do that. So I hope that this has been helpful. This is kind of a short and sweet episode. But I really think that this is all you really need to know to be properly prepared to understand a non compete clause and to kind of have the foundations on which to start a negotiation if that's, if that's what's next. Because if you see terms that you don't like, in terms of a non compete in your contract, that doesn't mean that you need to run away. That just means that you need to open up a conversation and and try to get things changed that you don't think are fair to you. So I would love to hear, do you have any non compete nightmare stories? Do you have any non compete words of wisdom? If you have any either questions about non competes or any advice or stories you'd like me to share with the rest of the community I welcome and would love to hear from you. So you can get in touch with me on Instagram. You can tag me @TheResumeRX or you can message me directly or you can always feel free to drop an email if that's more your thing. Stat@theresumerx.com. Again, thanks for listening, and you'll hear from me again next week. Have a good one.