Statistics show that times are changing, and while it used to be true that the majority of chiropractic new graduates hang out a shingle and start their own business, more and more of you are now turning to working in an associate position for at least a short time following graduation. While this can be an attractive route because it affords you the opportunity to earn a living while also gaining real world experience, which can be invaluable to you throughout the duration of your career, such an opportunity often comes at a price. You will soon discover that with that coveted job offer comes an often times very restrictive employment contract that, should you choose to sign it, may put a damper on your future goals, at least for some time. In this article, we will examine the issue of the non-compete, and offer suggestions that you should employ when crossing this hurdle post-graduation.
What is in the Non-Compete? What Does it Mean?
A standard covenant not to compete will typically delineate how far away one must practice from the employer and for what period of time such restrictions are necessary following termination from employment by either party and for any reason. You got it. It doesn’t matter if you quit or get terminated, or if you are there three months or three years. Common formulas include provisions which
limit your ability to practice, as a solo business owner, or as the employee of another chiropractor within distances that commonly range from 10 miles to 20 miles away from the employers place of business, for periods that typically last from one to two years. Be mindful, should your employer own multiple locations, this will likely apply to all of them, which would effectually extend the range of the clause over a much greater distance. Imagine a scenario in which you signed a contract with an employer that owned six offices in your hometown. You would effectively be prevented from working anywhere in the city and probably the outlying suburbs. This is a daunting prospect for one who may have established a life and home somewhere, unless you have the funds in reserve to “last it out.” Keep in mind, however, that various state government and municipalities look upon the covenant not to compete differently. Some of them uphold them almost by standard procedure, while others have passed statutory regulations that limit their enforceability. It may be worth your time and money to investigate how a contract you are supplied will be looked at by local courts when the time comes.
Separate from the covenant not to compete, many contracts also include a non-solicitation clause. This states that should employment be terminated for any reason, you agree that you will not directly contact clients of the employer for a designated period of time. Realize that this means that even though you may be able to practice several miles away, you will still not be allowed to contact your former patients to notify them of your new location.
Why Sign One in the First Place?
The short answer to this question is likely because you will not have a choice should you seek to work for someone else. While on the face of it, this seems like an awfully harsh reality, one must examine the reason that they exist. The startup of a chiropractic practice and the subsequent development of a patient base that will ensure its long term success is both expensive and risky for the employing chiropractor. Chiropractic is highly personal profession…one in which the relationships built between chiropractor and patient matter a great deal, often more than practice location and amenities. As an associate chiropractor you will be given the opportunity to develop such a relationship with patients that were initially attracted to your place of employment by efforts borne by that business. Those patients, often times, came in the door there at a significant cost to the practice. Marketing and promotion are not inexpensive endeavors, and the maintenance of a physical location is even more expensive. A chiropractor/business owner simply cannot gamble on the possibility of losing the lion’s share of his or her patients to a new employee who, in the absence of contractual protections for the employer, stays only a few short months and then absconds with half the patients when they open an office directly across the street from the employer’s. Hence, should you find an offer of employment that does not include such provisions, consider it the exception to the rule.
Before Signing-Take a Personal Inventory
When presented with a job offer that requires such a contract, take a few days to think about what you want your future to look like, and how this contract might impact that. If what you want is to remain and employee long term, if you agree with and embrace the business practices of the employing chiropractor, if you have a personal relationship or rapport with your potential employer that suggests that a mutual beneficial long term relationship is possible, and if the contract also offers you the opportunity to meet your financial goals in a real and achievable way, then you should likely not be concerned with agreeing to such provisions. If any of the above are not true, ask yourselfNon-Compete, Continued from page 1
these questions. How long do I wish to remain an employee here? Will this opportunity provide me the opportunity to gain sound financial footing such that I could weather the storm if my employment were terminated? Am I willing to move or commute long distances to work? How valuable is this opportunity to me right now? How badly to I need this particular job? Would working here be a valuable learning experience that may make limiting future options worthwhile?
Many associate chiropractors accept positions specifically to gain experience, and realize that moving on means moving to a new city or state. Should this be your objective- plan accordingly. Rent your home, don’t buy one. Don’t buy a baby grand piano because you have always wanted one. Keep yourself as mobile as possible.
Negotiate? Can I Do That?
Before you decide to try to negotiate the terms of your contract you need to realize that for a few employers, this will automatically signal the end of your consideration for employment. Some may just say “no” and see if you are willing to sign on anyway, and some might not call you back at all. That said, if done professionally and amicably, you should not shy away from attempts to negotiate your terms, because in the long run working under the onus of an agreement you view to be abusive leads to dissatisfaction and unrest that isn’t good for anyone.
When deciding how far to push negotiations think first about any leverage you may have in the situation. If you were homecoming queen in the same small town as the practice location, and are likely to bring in a considerable number of patients, or to offer significant competition should you start your own practice locally, then you stand a much better chance than if you are moving as an unknown to a new city. If you have skills or certifications that align with the practice’ s business model, such that there are very few people who could meet their needs, this may also give you a bit more negotiating power.
While it will be difficult to negotiate your way out of the inclusion of protections for the employer, you may, in some cases, be able to negotiate the terms of such measures. If the employer engages in one particular practice model, consider asking for specific language to be added which would protect his or her way of practice, and not prevent you from engaging in another type of practice. For example, if you will be working at a practice built around a monthly membership model, consider asking for the covenant not to compete to apply specifically to that model, but to allow you to pursue opportunities in a traditional fee for service establishment. Many people have also been able to effectively bargain for a smaller radius as defined by the contract. If the contract specifies 20 miles, but you know that you will likely not wish to practice within 10 miles of the office, then ask if it can be reduced. Also, ask for specific language that clearly states how such a distance is measured. 10 miles as the crow flies covers much more area than 10 miles drivable distance. If this is not defined, it is ambiguous and you could be exposed to legal costs down the road.
Finally, sometimes it may be worth it to negotiate in terms of the length of time the covenant is enforceable. Perhaps you have a nest egg that will definitely carry you for the period of one year, or you plan on saving to that end while working, but you know that two years will put you under.
Try to negotiate.
Finally, a few chiropractors have been able to successfully demonstrate that they will not attempt to “steal” business from an employer by asking them to eliminate the non-compete clause in exchange for additions to the non-solicitation agreement, by adding language that states that they not only will not solicit the patients of the former employer, but that they “will not accept” them as patients should they decide to move on. By doing this, you keep the option of working for another doctor open, and indeed for opening your own practice a possibility, because the employer knows that you will not be able to “steal” his or her patients for defined period of time after you leave. This is usually easiest to agree upon if the time limit for “accepting” the former employer’s patients is clearly delineated and if a penalty (in dollar amount) is defined within the contract.
Regardless how you proceed, remember that working as an associate can be hugely rewarding in many ways, but do not plow into a situation without careful consideration. Doing so could have a major impact on both your career and your life.