14 Oct Restrictive Covenants- Enforceable or Not?
Question: I have owned my practice for 2 years, brought in an associate about 11 months ago and now my associate has broken our restrictive covenant agreement, what recourse do I have? We live in an area with a sizable amount of Hispanic patients and the associate speaks Spanish. I’m concerned I will lose a good portion of patients.
Answer: Restrictive covenants can not keep a person from earning a living. If they open up a new office or in this case purchase another practice down the road, although it shows their lack of integrity, it will not be enforced in most states for an associate agreement or a partnership/full walk away sale transition. UNLESS…the associate/buying doctor who left is soliciting patients directly or indirectly (ie: through a team member still working in your office telling pts where to find him/her) via letters, reaching out to clients on social media avenues, etc.
I have even seen where a doctor did something similar to your situation then a couple months later hired the hygienist away from the practice. She actively reached out to patients to move them over to the new office. IF you find out that letters have been sent or clients are being solicited via Facebook, get a copy of what was sent so you have something to go after him with. However, your contract does not have a monetary penalty so it will be up to the judge if it goes that far.
Considering you have owned the practice for 2 years, you have a head start! Take a hard look at what you are doing right and what you can improve on. Are there small accommodations you can put in for your patients to make your practice standout?? You mentioned having a patient base that speaks Spanish, do you have team members that speak Spanish? Make certain to promote this. If you have a large Spanish speaking population, consider learning it. Patients will be impressed that you care enough to learn, even if you botch the translations from time to time.
Rules of the game changed, so have a team meeting and game plan how you are going to ramp up. There’s a lot to be learned from this and you can take in the knowledge and grow from it rather than sit back and watch how it plays out.
Competition keeps us on our toes so we don’t become complacent.
Instead of spending time looking in the rear view mirror, keep looking ahead and what you need to do to reach your goals!