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Practice Protection from Employee through contract

           July 23, 2015
 
Question received and answer drafted by AttorneyErica Youngerman - 

Question:

Dear Erica, 

I am looking to hire my first professional employee but I have built this practice from scratch and don’t want him to be able to work a few months, leave, open next door and take all of my relationships.  How can I prevent him from stealing patients, staff and referral sources?

Thanks!
Dr. B

Answer:
 
The most protective step you could take is requiring the employee sign a properly drafted, protective employment agreement, meaning it would contain certain protective provisions such as a non-compete and non-solicit (generally known as, collectively, restrictive covenants).

A non-compete serves to prevent the employee from performing medical services within a certain distance of your practice for a set amount of time.  This is vital as one of the biggest assets of a practice is its location.  By preventing the employee from working in close proximity to your practice, you are decreasing the likelihood of patients, staff and referral sources following the physician.

While your patients, staff and referral sources could elect to follow the physician anyway, you could prevent the physician from soliciting those persons and entities for a set amount of time by including a non-solicitation provision in the employment agreement.      

There are several other provisions regarding termination that we recommend that you incorporate into your employment agreement, including an outline of insurance responsibility, non-disparagement, confidentiality and what compensation will end or continue after termination, and also on what notice the employee must give if they are leaving, among other provisions... 

If you need assistance drafting an employment agreement or if you have a document in place that you would like reviewed and possibly updated, feel free to contact Jenniferor Erica. Conversely, if you are on the receiving end of an employment agreement, we are happy to assist you with a review of the document to ensure your interests are protected.
 
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