Even as you negotiate a new dental associate contract, you may have aspirations that will take you elsewhere. Perhaps you want to open your own practice. Or maybe this associateship seems like a great way to spend a few years learning, but you think it may not be your “forever” practice.
That’s where the non-solicitation clause lurking in your contract becomes important.
A non-solicitation clause is designed to prevent the employee from actively soliciting employees, customers, suppliers or patients of an employer away from the employer. Often, a single provision of the employment agreement will cover non-solicitation of both employees AND patients.
The employees and patients of a practice are valuable assets of the business, and an employer wants to protect the practice’s assets, The employer will especially wish to stop an employee from using the relationships he or she has developed through the employment to misappropriate some of those assets.
With respect to employees, the employer has invested time and money in training the employees — they presumably have insider knowledge of the practice, know how the practice operates, and know the individual patients. The departure of this asset would be disruptive to the practice. The employer believes that an attempt at “poaching” of its employees by the departing employee-dentist (who was likely introduced to these employees and learned of their talents only by virtue of the dentists’ employment) would be an unfair attempt to take away a practice asset.
With respect to patients, the employer’s motivation is the same — to protect the practice’s assets. That the practice’s patients are an asset of the practice is apparent when you consider that the valuation of a practice is based in large part on the number of active patients.
Why you should care about non-solicitation clauses
An employee-dentist who intends to open a practice, or to purchase an existing practice, may wish to hire particular employees of his or her current employer who are known to be trustworthy and competent.
Likewise, the departing employee dentist may hope that publicizing his/her new practice will entice some patients to follow him/her to the new practice.
The non-solicitation provision may prevent the departing dentist from bringing along either these dental team members or these patients — even if the new practice is beyond the geographic reach of the non-compete clause or restrictive covenant.
Things to consider about non-solicitation clauses
A non-solicitation is different than a restrictive covenant. Non-solicitation provisions in an employment agreement are separate from, and in addition to, any restrictive covenant in the agreement. The former employee may be in compliance with the restrictive covenant and yet still violate the provisions concerning non-solicitation.
The restriction may be broader than just “solicitation”; restriction on hiring. Non-solicitation provisions must be read carefully to determine what is prohibited; such provisions may prohibit more than just “solicitation.'
For example, some prohibitions on soliciting employees (of the employer’s practice) not only prohibit soliciting these employees for hire, but expressly prohibit the hiring of such employees, whether or not the former dentist-employee initiated the contact.
Note also whether the agreement prohibits the hiring of former employees. It would seem that the longer that the former employees have been separated from the practice, the less interest that the practice should have in the departing dentist hiring the former practice employee.
Sometimes the restriction may be broader than just “solicitation”; restriction on accepting former employer’s patient. With respect to patients, understand whether the agreement just prohibits “solicitation” of the practices’ patients, or whether it seeks to prohibit the servicing of those patients even if they themselves seek out the departing dentist.
Tenure of employment may be a consideration in enforceability. As with a restrictive covenant, it would seem that if the employee is employed for only a brief time (whether due to either party’s dissatisfaction with the arrangement), a significant post-employment restriction (such as a non-solicitation) might be unfairly burdensome when weighed against limited damage to the practice of the former employee’s competition.
See more details and sample non-solicitation clauses in chapter 4 of Dental Employment Agreements: The Devil’s In the Details.
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