In the past five years I’ve seen an increasing number of physician assistants and nurse practitioners asked—or required—to sign a restrictive covenant, also known as a noncompete clause. These legal documents prohibit a PA or NP from practicing within a certain location radius for a set period of time after leaving a position. The time period can be as short as a few months to as long as a few years.
The theory behind a restrictive covenant is that it protects the practice from losing its greatest assets—its patients—to the exiting PA or NP. The problem is, these clauses harm our patients and the public. Restrictive covenants remove health-care providers from the community. In June 2005, in the matter of Murfreesboro Medical Clinic, P.A., v. David Udom, the Tennessee Supreme Court agreed with the AMA’s long-held position that
noncompete agreements “restrict competition, disrupt continuity of care, and potentially deprive the public of medical services.” Even if the practitioner isn’t removed from the community, continuity of patient care is disrupted and access to medical services may be limited. Colorado, Delaware, California, Massachusetts, and Tennessee are among the states that prohibit restrictive covenants.
Restrictive covenants prevent the clinician from serving as a patient advocate. It’s usually difficult enough to be the whistle-blower when there is a breach of quality patient care, but imagine being unable to leave such controversial work conditions because a restrictive covenant would be enacted, making the whistle-blower ineligible to work elsewhere for a time. On a constitutional level, restrictive covenants deny the provider the right to practice his or her profession.
A number of professional organizations, including the American Academy of Emergency Medicine and the Society of Dermatology Physician Assistants oppose or discourage the use of restrictive covenants. Although practices do need to consider the “business end” of health care, patient care should never suffer as a result.
Every PA and NP needs to decide whether he or she feels it is acceptable to sign a restrictive covenant/noncompete clause. If your own answer is no, you need to learn how to properly convey that to a potential employer.
If you do choose to sign a restrictive covenant, you need to know how to word it to protect yourself and your professional future. For example, if you did sign such a clause, would it still be in effect if the practice is sold? What if the practice is sold to a large health-care system that now has satellite clinics across the entire state—would the covenant now apply to every facility owned by that entity? Would it still be enforced if you lost your job? That doesn’t seem fair!
What if you wanted to practice in another area of medicine at a site within the restricted radius? For example, if you leave your job at a family practice to do preoperative testing at the local operating room, patients are unlikely to leave the practice to follow you. Yet if your restrictive covenant isn’t worded the right way, you may not be able to take that new job.
Agreeing or refusing to sign a restrictive covenant is an important decision. Educate yourself, your employer, and your professional organization on the harm these clauses can do.
Abby Jacobson, MS, PA-C, practices dermatology in Lancaster, Pa. She is the owner of Strategic Medical Consulting, LLC and PAprofession.com.