3 Things for Healthcare Professionals to Consider Before Signing a Non-Compete Agreement
Doctors are no longer the only healthcare professionals required to sign non-compete agreements. Many health systems and other healthcare-related companies are requiring that non-compete agreements be signed by all providers, including all advanced practice registered nurses (nurse practitioners, clinical nurse specialists, nurse anesthetists, and nurse midwives) (“APRNs”) and physician assistants (“PAs”).
Before accepting a new position, you should ask whether you will be required to sign a non-compete agreement. Wisconsin law protects employees from non-compete agreements that impose unreasonable restraints on their ability to work for other employers either during current employment or after termination or resignation. However, even if you personally think the agreement is unreasonable, it may still be reasonable under the law. Thus, it is important to review the agreement before accepting a new position in order to make an informed decision about whether to take the position where signing such agreement will likely impact your future practice should you change employers.
1) What Can a Non-Compete Agreement Restrict?
A non-compete agreement can restrict the geographical area where you can work, your solicitation of patients (patients contact) of the employer, and your ability to share or use the employer’s confidential information over a period of time. Such an agreement can restrict your ability to moonlight or otherwise perform similar work for another employer while you are currently employed. However, it typically places restraints on employees upon the combination of the ending of their employment and search for new employment.
It is important to know whether the agreement restricts you working in a specific specialty or working as an APRN or PA in general.
It is also important to know whether the restrictions apply during and/or after your employment so you do not breach your agreement or end up struggling financially. For example, if you depend on income from working per diem on weekends and you are restricted by the non-compete from picking up extra shifts at another hospital, then you may have to reconsider signing the agreement and taking this new job offer.
2) Can the Non-Compete Agreement Restrict My Practice for an Indefinite Time Period?
No. In Wisconsin, a non-compete agreement must contain a time period. Typically, a time limit of 2 years or less is considered reasonable. Depending on the geographical restriction, this means that you could be restricted from practicing near that former employer for an extended period of time, causing you to travel further for work or even requiring you to move.
However, a restriction placed during your current employment, preventing you to perform similar work for other employers, is effective during the entire course of your employment.
3) Can the Non-Compete Agreement Restrict Me from Taking Another Position in Wisconsin?
Probably not. It is likely that the geographical restriction will be a mileage radius from the location where you work. For doctors in Wisconsin, radii of up to 50 miles have been considered valid geographical restrictions. Thus, if you work at multiple locations for the employer, such a geographical restriction could cause some concern.
A geographical restriction could cause you to have to travel further for your new job, work a different type of job (like Registered Nurse), or move for a period of time after resignation or termination.
If your employer or potential employer is requiring that you to sign a non-compete agreement, give us a call. We will be happy to review the agreement with you. It is important to know the implications of signing such an agreement for the future of your practice. Contact us at (414) 240-1185.