Introduction to Non-Compete Clauses

Indiana Physician Non-Compete Law is not black and white.  In modern corporate world, more companies require their employees to sign non-compete clauses as a part of their employment contract ,or as a separate agreement. Covenants not-to-compete help employers to restrict outgoing employees from using the knowledge and skill learned while in their organization to compete against them or work for a competitor. The restraints are usually narrowed to a specific time (temporal restriction) and location (geographic restriction). Some clauses go further to restrict the employee from practicing in a specific field. In the case of physicians this would likely be the specialty you practiced while working for the employer (this matters in some cases where the physician is double boarded).

The basic legal issue of non-compete clauses is whether the non-compete clause is reasonable or enforceable under the laws of the State.

How Do Non-Compete Clauses for Physicians Work?

For a physician who is just getting started in the field, the concept of a physician non-compete might sound a little strange. Practice groups and healthcare employers often require physicians to sign covenants not to compete in the event their employment contract is terminated (by either party). This means the physicians may be prohibited from setting up a practice or working for another employer within a geographic region for a period of time (for instance: five miles from the former employer’s facility for a period of two years).

Are Non-Competes for Physicians Enforceable in Indiana?

Knowing the delicate nature of services physicians provide, can these kind of agreements be enforced in Indiana? As of this moment, there is no specific law prohibiting the enforcement of physician non-compete in Indiana. Thus, the court has the discretion to enforce a non-compete clause or void it. The attitude of Indiana courts to physician non-competes is to disfavor it and the employer has the burden to prove that it is reasonable and should be enforced. Each case is usually treated on its own merits. However, the courts will often decide based on the following factors:

• If the clause protects the legitimate business interest of the employer
• If the physician would be able to earn a living should the restriction be enforced
• The reasonableness of the restriction with regard to the time-frame and geographic location and scope
• Public policy; how the enforcement would subsequently affect members of the public (patients) and the practice of medicine

These competing interests would be weighed by the Judge before a determination would be reached as to the clauses enforceability.

Loosening The Hold of Indiana Physician Non-Compete Law

The fear of lawsuits scares many physicians who have signed non-compete clauses from trying to pursue a job within the restricted area. Here are four ways you can get out of your non-compete restraints:

Ask for a Waiver/Renegotiate: Some employees often dread their employers than to ask for a waive of the non-compete or request a renegotiation. Some physicians have gotten out of non-competes this way. Your employer may not even be willing to sue or be aware your non-compete is unenforceable.

Breach of Terms: If your employer has breached any of the terms in your employment contract or non-compete agreement, then you may have a ground to void the covenant.

Unreasonable Terms: Courts generally disfavor physician non-competes. If the terms are absurd, this becomes a very good ground to void the contract. Your physician contract attorney can give you professional advice on this but only he court has the last say.

Public Policy: If the contract affects the rights of patients to receive treatment from you as their physician or restricts you from earning a living at all, the court will likely not enforce the non-compete clause.

It is advisable that before you sign a new employment contract with a potential employer or set up your own practice or even give up just because you have a non-compete, you should get a physician contract attorney to review the contract terms for you. You may actually have nothing to worry about.

If you have questions about Indiana Non-Compete Law contact Chelle Law.