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.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.