Republished with permission from Idaho Medical Group Management Association (MGMA). Original article appeared in Idaho MGMA’s May 2018 e-newsletter.
As the healthcare industry grows, and at a time when unemployment is low, it can be very frustrating to find potential employee candidates who are bound by noncompete agreements with current or former employers.
Medical practices shouldn’t be too quick to throw in the towel before rejecting candidates on the basis of having a noncompete agreement. Here are some pointers to help with the hiring process in these situations:
- Many noncompete agreements are unenforceable. Noncompete agreements are subject to state laws. If they are permissible, they typically have to be drafted very carefully, with strict limits on the employee’s restricted activities and the amount of time and geographic area in which they apply. For example, in Idaho, noncompete agreements cannot bind an employee for longer than 18 months unless additional consideration was paid to the employee in exchange for the noncompete. The agreement must also be limited to the area in which the employee had influence while performing duties for the employer.
- Even if the agreement is enforceable, it may be possible to structure an employee’s job responsibilities around the restrictions of the noncompete. It is possible an employee can work for a practice without causing damage to the former employer. Think about what the employee’s job responsibilities will be, and whether it is possible to avoid running afoul of his or her restrictions.
- Job descriptions matter. It is important to document the new employee’s duties to help demonstrate that the job responsibilities do not conflict with the noncompete agreement.
- Employment agreements can mitigate risk. A good employment agreement will document that a practice has instructed and agreed with the new employee not to share confidential information of a former employer and not to engage in activities that are prohibited by a former noncompete agreement.
- Engage legal counsel. A lawyer can help evaluate the employee’s noncompete and navigate the hiring process to mitigate the risk of the practice being involved in a lawsuit with the former employer.
This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author. This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.