Can I prevent a former medical partner from competing against me?

Texas businesses take great care to prevent former partners, colleagues, employees and others who are intimately involved in their operation from going to an established but similar business, starting their own business and competing against them. The non-compete act is in place to protect them from this very thing from happening. This can be particularly important for physicians.

Building a practice takes time and many do so with other physicians sharing the cost and benefit. If there is a decision to part ways, the established practice could be worried that the departing physician will open a competing practice.

Physician non-competes fall under the law for competition and trade practices. However, there are key differences that must be known when trying to enforce a non-compete clause with fellow physicians. In these cases, it is useful to have professional guidance from the perspective of the established practice and the one that is opening a new practice and might be in direct competition with it.

Requirements for physician non-competes are different

In general, non-compete agreements can only be enforced if they are part of an agreement that is otherwise enforceable. There must be reasonable limits as to how long it lasts, the geography and what activities can be undertaken. Texas strives to have competition. It does not want to create an environment where there are monopolies or businesses feel they are entitled to a customer base that should otherwise be available to everyone.

The business that has the agreement and tries to enforce it to prevent competition needs to prove how failing to enforce it would do it harm. It must also show that enforcement will not place an unreasonable burden on another’s rights to operate their business and earn a living. A specialized skill may have an easier time of showing the need to avoid unnecessary competition.

Enforcing a physician non-compete is more complicated. Physicians trying to enforce a non-compete agreement must let the other physician execute a buyout to free themselves of the stipulations. It must be at a price that is deemed “reasonable.” If these criteria are not met, then it cannot be enforced.

There cannot be a contractual requirement preventing them from receiving a list of the patients they treated in the prior year before departing the previous practice. They can also receive the medical records once they are authorized to receive them. The agreement allows for the physician to continue caring for people who have an acute illness. The courts will determine the reasonableness of the buyout price.

Addressing medical practice non-compete agreements may require legal help

Despite it being a people-centric job where people’s lives may be at stake, a medical practice is a business just like any other. As with other businesses, people who work together sometimes have a falling out or just want to part ways and start a new practice. This can be problematic for the existing practice and they could try to enforce a non-compete agreement.

As this information shows, these agreements are complex and all parties need to understand the value of professional assistance. Contacting legal professionals who specifically understand business contracts and health care law can be helpful to reach an acceptable resolution.