Consider these points before enforcing restrictive covenants

Restrictive covenants are a fact of life in most employment agreements. But having one and enforcing it when an associate or partner leaves to set up a competing practice are different propositions. Don’t presume the contract offers you ironclad protection. Before you decide to enforce a restrictive covenant, make sure:

  • Sufficient coverage in the doctor’s specialty already exists in the region.
  • Impact the enforcement might have on your referring doctors. I've seen lash-backs from referring doctors when a practice tries to enforce a covenant against a doctor they like to refer to.
  • You’re prepared to lose substantial time and money in court. Legal decisions on restrictive covenants are subject to a number of interpretations, despite the contract’s provisions.

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About Reed Tinsley, CPA

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Reed Tinsley, CPA