Folks come to see me fairly regularly when they are either thinking about leaving employment, or soon after they have been let go from a job. These times are often fraught with anxiety and uncertainty as the person goes from the stability of having a regular job to trying to figure out what comes next.
Many of the people that I counsel have valuable skills that can be readily transferrable to a new employer. Others come to me with thoughts of starting their own business and using the skills they have developed over time to produce a better product or provide a better service.
This is the essence of the American dream. Each of us is supposed to have an opportunity to strike out on our own and fulfill our promise. But these days, more than ever, I have to tell the people who come to me to pump the brakes for a moment.
That is because increasingly people in the workforce are restrained by non-compete and non-solicitation “agreements” that severely constrain their abilities to move on in their careers.
Non-competes have increasingly found their way into employment relationships as employers try to limit an employee’s ability to take knowledge and relationships nurtured on the job and transfer them to a new employer.
When someone comes to see me about the ending of an employment relationship, my first question is always whether or not there is a non-compete provision. Often the client is unsure. Lots of times the non-compete is one of multiple documents signed when the employment relationship starts. It is rare that a new employee pays attention to the document because at that time the employee is thinking about the great new job, not about the potential ending of the relationship.
Generally, I think that enforcement of non-competes is bad policy. As an example, I read a news item last week about a patient in Iowa who needed to see a doctor who had provided cancer treatment to him a few years earlier. When he contacted the clinic, he was told that the doctor no longer worked there. When he asked for forwarding information, the clinic would not provide it.
The patient was not able to track the doctor down.
It turned out that the doctor had ended his employment with the clinic and he was subject to a non-compete which prohibited him from working within 35 miles of the clinic. The clinic had good reasons to have a non-compete. It did not want to lose its clients to the doctor’s new practice.
On the flip side however, it is bad policy to limit a patient’s access to a doctor that has treated him previously. Some states limit the applicability of non-competes in these situations because the public interest demands free access to qualified medical personnel. But every state is different.
According to the news article, nearly forty five percent of practitioners are now subject to non-compete agreements.
Patient advocates have argued that these types of agreements should not be enforced by the courts because they compromise the public health. That makes good sense. That is why in 2016 Connecticut passed a law limiting the scope of physician-related non-compete agreements to no more than one year in duration, and 15 miles in geographic location.