When medical doctors finish their education, they usually have a lot of student debt. In fact, after completing an internship, new medical professionals may have a substantial amount of personal debt related to their cost-of-living expenses.
They are often eager to take a well-paid position at a hospital or an established corporate medical practice because they need a guaranteed amount of income to start repaying what they owe. Reliable income helps them improve their standard of living as they develop their professional credentials.
After a licensed physician has experience in the industry, they may decide that they want to branch out and start their own professional practice. However, they may have signed an employment agreement with a noncompete agreement included.
Do medical professionals in New York have to worry about noncompete agreements preventing them from starting their own medical offices?
New York allows medical noncompetes
Noncompete agreements have become more controversial in recent years. On a federal level, the Federal Trade Commission’s (FTC) issued a non-compete ban that was stayed by a federal court before it went into effect. Some states, like California, have completely prohibited noncompete agreements in all employment contracts. Other states limit their use in certain industries, including the medical sector.
New York does not prohibit the use of noncompete agreements by medical businesses. Physicians and other licensed medical professionals may be subject to restrictions when they want to start their own medical practice or go to work for another hospital nearby. A professional subject to a noncompete agreement could face a lawsuit brought by their former employer if they attempt to start their own medical practice.
That lawsuit could cost them tens of thousands of dollars in legal fees and even more in damages. They may end up forced to close the business they just started. Healthcare professionals seeking to start their own practices need to look carefully at their current employment contracts. In some cases, they may be able to buy out or negotiate a release of the noncompete. Other times, they may need to leave a certain geographic area in order to start an independent practice without putting themselves at risk of litigation.
Understanding the limitations imposed by a noncompete agreement in a medical professional’s employment contract can help that professional evaluate their career options. Those who desire control over their careers may need help protecting themselves from the possibility of litigation and the risk of a failed startup.
