True story: A doctor received a job offer from a hospital 62 miles away. That seemingly good news quickly evaporated, however, when the hospital's attorney discovered a restriction in the doctor's contract prohibiting him from practicing medicine within 65 miles of his employer.
"The restriction was so ludicrous," said Dennis Hursh, an attorney who was involved in the negotiation, "that we both agreed the former employer would almost certainly lose if they tried to sue."
Nonetheless, the hospital didn't want to take any chances. It withdrew the offer to hire the doctor.
"Contract provisions hold numerous traps for the unwary," said Hursh, who has provided legal services to physicians for more than 30 years and is the author of "The Final Hurdle: A Physician's Guide to Negotiating a Fair Employment Agreement" (www.TheFinalHurdle.com).
Doctors who pay little attention to such details can learn the hard way that a soon-to-be-former employer can enforce restrictions. And that could mean having to build a new patient base.
Hursh suggests the following ways to deal with restrictive covenants while negotiating — and before signing — an employment contract:
1. Keep the distance reasonable. Although geographic restrictions are common, in most cases the agreement should not require the doctor's new office to be more than five miles from the old one. In rural areas, a somewhat larger distance may be reasonable. Also, when practices have multiple offices, the distance rule should apply only to the office where the doctor spends most of his or her working time.
2. Don't agree to restrict the general practice of medicine. It's one thing to agree that patients will have to drive five miles from your old office if they want to continue seeing you. It's quite another to expect you not to see patients in hospitals, nursing homes or ambulatory surgical centers that are within the prohibited area.
3. Don't get locked out of soliciting patients. It's reasonable that you would be prohibited by contract from directly asking patients — whether in the office or by phone or letter — to follow you to the new practice. However, advertisements from your new employer should not be considered direct solicitation.
4. Clarify when restrictions should not apply. If your employer fires you without cause, a restrictive covenant should not go into effect. The same holds true if the employer breaches its agreement with you, "although that can be difficult to negotiate," according to Hursh. One way to deal with that would be to list specific grounds for a breach in the contract.
Avoid a frantic call to your lawyer by paying attention to restrictive covenants on the front end of employment negotiations.