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Noncompete agreements and physicians: Are they on the rise?

The number of doctors starting up private practices is on the decline. Instead of working on their own, physicians are taking jobs with hospitals. Executives with the hospital often require these medical professionals to sign a noncompete agreement as part of their contract for employment. This has led to an increase in the number of physicians that are bound by noncompete agreements.

Are noncompete agreements legal in New York? The New York State Attorney General notes noncompete agreements are generally legal and enforceable in the state if the following four elements are met:

  • Necessary. The noncompete agreement is necessary to protect the employer's interests.
  • Fair. The agreement must not result in an undue hardship on the physician.
  • No harm. It is also important that the terms of the agreement do not result in harm to the public.
  • Reasonable. The noncompete must also be set to last for a reasonable period of time and span a reasonable geographic scope.

A failure to support any one of these elements can result in the defeat of the noncompete agreement.

Are challenges to noncompete agreements successful? Although noncompete agreements are often legal, a physician could successfully challenge a poorly structured agreement that fails to meet the elements listed above. One example involves a challenge in an area where the professional's specialty is poorly represented. This could find success under the "no harm" element noted above as a successful noncompete would result in a lack of medical coverage in the affected area.

Physicians that are considering a challenge are wise to seek legal counsel. An attorney experienced in the legal issues faced by physicians can review your case and discuss the pros and cons of a challenge.

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