Ignore The Language Of Your Restrictive Covenant At Your Own Risk
Darren M. Green, JD
MD Preferred Legal Services
All's right in the world. That perfect job offer has come in. Euphoria rules
the day. Unfortunately many a physician will let
their guard down at this happy time and ignore the critical issues and
restrictions concerning their rights should it become necessary to
terminate the employment relationship. Even the best laid plans can
turn sour for any number of reasons, and that's the wrong time to
realize for the first time that your employment agreement unreasonably
prohibits you from plying your trade. While non-competition,
non-solicitation and similar restrictive covenants are largely creatures
of state law - and hence the rules governing such covenants tend to
vary from state to state - there are a few general principles to
consider and evaluate regarding non-competition provisions before
signing on the dotted line.
While physician
non-competition restrictions are usually difficult to enforce (and in
some states entirely unenforceable), this does not mean you should
accept whatever language your new employer proposes in your employment
agreement. Defending
claims initiated by former employers is expensive and time-consuming,
as you'll need a good (a/k/a/ expensive) litigator to push back. Bear
in mind that even if you ultimately prevail in dismissing the claim,
it's entirely possible that your new employer will have revoked your
employment offer to avoid undue expense, risk or headache on their end. In such a case, the non-competition provision will have succeeded in
restricting your activities even though it was ultimately either not
enforceable or not applicable to your new position.
So, what to do? First, you
may want to take a stab at removing the provision altogether. Maybe
suggest a non-solicit of patients in lieu of the non-compete, as that's
often the risk of greatest concern to a practice. If you lose this
battle, your focus should shift towards making sure that the provision
is reasonable in terms of geographic scope and timing. A non-compete
which runs for 4 years following termination of employment is, in all
likelihood, far too long.
Shoot for 6 months or maybe a year. If your
practice is located in Chicago, the non-compete should ideally be restricted to
other practices within a specified radius of such practice, but at a
minimum, restricted to Chicago city limits.
Next, you should ensure that any
restrictions are limited to your specific position at the practice. In
other words, a pediatrician should not be restricted in any way from
joining other types of practices. Finally, and possibly most
importantly, the non-compete should become null and void in the event
your employer terminates your employment without "Cause" (which should
be defined, preferably narrowly, in your employment agreement). It
would be rather unfortunate to be out on the street 1 month after
accepting employment due to budgetary constraints at your new practice
with no ability to work in your hometown.
Darren M. Green, J.D. has
over 14 years experience representing a wide range of clients on
employment, corporate, technology, venture capital and other
transactional matters. He is an Adjuct Professor at Northwestern
University School of Law and a member of MD
Preferred Legal Services. Mr. Green received
his BA from the University of Pennsylvania and his J.D. from the U.C.L.A.School of Law.
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Tenancy by the Entirety...Something Every Physician Should Know About
As young,
graduating residents and fellows prepare to move from abject poverty to
relative prosperity with a new employment contract and a respectable salary,
their thoughts often turn to establishing a residence, getting married,
starting a family and buying many of those deferred "things" that they could
not afford as medical students. Before you get started down the road of the
American Dream, stop and get some advice.
I cannot
over stress the importance of sound legal advice for any professional embarking
on a new career. Good advice is available from any number of quarters including
the family attorney and other family members and friends who are older and
wiser. But there are those whose job is dispensing financial advice. They are
called, not surprisingly, Financial Advisors. And, of course, as in other
professions, there are advisors and then there are advisors.
An
excellent source for financial advisors who are "fiduciaries" (Financial
Advisors who work on a fee only basis placing the interests of the client
first) is the National Association of Personal Financial Advisors, NAPFA. All
of their members are experienced fiduciaries. Within the association is a group
of Financial Advisors who display the MD Preferred Financial Advisor Medallion.
They specialize in serving the very special needs of physicians.
Here is an
example of the sort of advice that one might expect from an MD Preferred
Financial Advisor.
Let's say
you are graduating from Fellowship and have accepted an opportunity in another
city. You plan to get married and buy a home. You and your spouse select a
suitable residence and find yourself at the closing. As your eyes begin to
glaze over after reams and reams of paper pass in front of you for your review
and signature, the closing office asks, "How will you be structuring the
title?"
You look at
each other and ask, "How do most buyers structure it?" You are already in
trouble. If you have not thoroughly investigated every aspect of the home
purchase process, YOU ARE GOING TO MAKE MISTAKES.
· Does the house fit your current economic situation?
· Is it in the right location?
· Does it fit your financial plan?
· Is it in the right location?
· And how should you structure the title?
Going back
to our example, the title officer replies, "Most couples place it in Joint
Tenancy." Not wanting to appear uninformed, you reply "That will be fine." But
will it really? Prefacing my comments with the statement that I am not an
attorney or a financial advisor and I am probably the last person to turn to for
advice, there is a structure that a high income, high net worth professional
should consider...Tenancy By The Entirety.
Both joint
tenancy and tenancy by the entirety have a right of survivorship. If one joint
tenant dies, the surviving joint tenant automatically owns the entire property.
No probate...no new deed. But Tenancy by the entirety has two unique features
which distinguish it from joint tenancy.
· Only married couples who are living in the property as their primary
residence may own property as tenants by the entirety.
· Property held in tenancy by the entirety is shielded from the creditors of
one spouse.
It is this second feature that makes it attractive to physicians. Let's face
it, a physician is more prone to being sued and to having their personal assets
attacked. A creditor who has a judgment against one (but not both) of the
owners of property that is held in tenancy by the entirety cannot force the
sale of the property to pay the judgment.
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GREECE AND
OIL COULD BE BIG FACTORS IN THE HOUSING MARKET
Harry Salzman, MD Preferred Realtor
The domino
theory is at work again. If Greece is unable to raise money to pay for
government spending, they could go bankrupt. (Hey, hold on, there! You mean
countries actually have to pay for the programs their legislators pass.
Bummer!!! With our luck, that might even happen here). However, Greece's traditional sources for borrowing
are asking if they will ever get their loaned funds back from the Greek
treasury. Germany, in particular, is irate that its
citizens, who typically retire at a much older age than do Greeks, are being
asked to provide pension money for Greek citizens.
If Greece defaults, then German banks will
see their capital evaporate. That, in turn, will make it difficult for them to
lend to other countries like Portugal or Spain to finance their budget deficits.
If these countries also default as a result, then another major credit crisis
will hit us. (Ireland would have been on this list of
endangered countries, but they decided to reduce their unsustainable government
debt by cutting government salaries, furloughing many government employees and
convincing its investors that it will repay the loans. Where do those crazy
Irish get these strange ideas?)
The bottom
line for the U.S. would be that, because of our
global linkages, our banks would also take a hit. This would make it very
difficult to obtain Jumbo loans and second-home financing. So, if you're
thinking of getting a Jumbo loan, or buying a second-home, it would be prudent
to make your move right now.
The other
source for concern is the oil-spill in the Gulf of Mexico. Obviously, the local economies
that will be directly affected by the spill will have a hard time recovering
from the effects of the spill. For the rest of us, the price of oil will rise
measurably - or more oil will have to be imported. Either way, our cost of
living will go up and the recovery from the recession will slow down. Slower
economic growth will mean slower job expansion and a higher U.S. budget deficit.
Oh, for the
days when worrying about Greece and oil just meant making an
appointment to have the car serviced.
Harry
Salzman, Salzman Real Estate Services, Ltd, 538 Garden of the Gods Road, Colorado SpringsCO80907, Toll Free: 800-677-MOVE(6683) or
719-598-3200
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Size Does Matter
If You Want To Live To Be A Hundred
www.RoundsOnLine.org
Ok, here's the hot scoop from the National Academy of Sciences. The
Ashkenazi Jewish community, which is known for its disproportionately
large number of centenarians, appears to be blessed with longer
telomeres and with a mutant enzyme that keeps their telomeres longer...for
longer...much longer. Scientists seem to think that longer telomeres may
be one of the reasons that these folks live so long.
I've always suspected that size really does matter but I never
thought to put a tape measure to my Telomeres. Actually, I'd never
heard of telomeres. It simply hadn't come up in date night small talk.
So, I went to my trusty computer and Googled telomeres and discovered
that they are actually relatively short sections of DNA at the end of
our chromosomes. A BBC science writer compared them to the plastic tips
of a shoe lace that keep the laces from unraveling. Leave it to the
Brits to come up with an imaginative analogy.
It would appear that each time a cell divides, its telomeres get
shorter...I can think of several politically incorrect analogies
myself...but the point of these ramblings is that the hyper active enzyme
that the Ashkenazi Jews seem to be blessed with repairs the telomeres
and prevents them from shrinking. The magic enzyme is called
Telomerase. And telomeres that don't shrink seem to retard the aging
process.
The pharmaceutical companies are probably already shifting into
overdrive to find a drug that stimulates the enzyme in those of us with
life styles that tend to discourage longevity. So keep an eye on your
spam files. Before long they will be replacing the Viagra promises with
a little blue pill promising longer Telomeres. Of course there will
probably be warnings of possible side effects...hair loss, tooth loss,
drooping eyelids, erratic driving, memory loss and a bankrupt social
security system. But those are small prices to pay for the promise of
living long enough to see universal healthcare and a Republican
president.
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Physician Assisted Suicide Gets Green Light from Montana Supreme Court
Now there are three states in the US where doctors can participate in
a terminally ill patient's decision to end their suffering by ending
their life. Montana joined Oregon and Washington in allowing their
doctors to prescribe lethal drugs to terminally ill patients who want to
end their life.
The vote was 5 -2, finding that there is "nothing in Montana Supreme
Court precedent or Montana statutes indicating that physician aid in
dying is against public policy." Justice W. William Leaphart writing
for the majority added, "The 'against public policy' exception to
consent has been interpreted by this court as applicable to violent
breaches of the public peace. Physician aid in dying does not satisfy
that definition. We also find nothing in the plain language of Montana
statutes indicating that physician aid in dying is against public
policy."
The case involved a retired Billings truck driver and his doctors who
hesitated to grant their patient's request that they provide him with
lethal medications that he could administer to himself to end his life.
And the fact that it would be the patient that self administered the
drugs was not lost on the justices. A physicians 'indirect aid' was
considered not to be contrary to public policy.
Even among the majority, the reading of the law was not consistent.
In fact, this was actually a very narrow ruling in that the justices
were taking the position that legislators have not crafted clearly
worded legislation that doctor assisted suicide is against public
policy. The justices were very clear that there was no 'vindication of
constitutional interests' in their ruling.
So, it would seem that, until the legislature steps up to the plate,
passes a law against doctor assisted suicide, that law is challenged,
moves up the judicial ladder and ultimately ends up before the same
justices, physicians have at least an amber light to assist their
patients as they seek not just quality of life but quality of death.
But State Solicitor Anthony Johnstone indicated that he plans to push
the legislature for clarification. "The Montana Supreme Court
recognized that physician-assisted suicide is a policy question for the
people of Montana and their Legislature. As we have argued, that is
where the resolution of this important issue belongs." Stay tuned.
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This and That from Here and There
Don't get
sick during July. A recent study by a pair of researchers with too much time on
their hands reviewed 62 million death certificates and concluded that medical
errors in teaching hospitals rose by roughly 10% each year during July. The
study as reported in the Journal of General Internal Medicine concluded that
the "July Effect" was probably a result of newly graduated medical residents
taking on more autonomy and writing scripts without direct over sight.
Every year
your author contributes to the Susan B. Coleman walk to cure breast cancer. I
even can be seen wearing a pink shirt from time to time. The contribution was
made in the hope that at some indefinite point in the future some progress will
be made in controlling this terrible affliction. It would appear that my
expectations were far too pessimistic. Researchers at Cleveland Clinic have
developed a vaccine that targets the proteins that are only present in breast
tumors but not in healthy breast tissue. They hope to begin human clinical
trials within the year. In lab results on mice the vaccine was 100% effective!
When was
the last time you read an article about the H1N1 swine flu? You may be
surprised to learn that the World Health Organization has left the alert level
at 6 (the highest possible alert level) and considers that the swine flu is
still a pandemic. They plan to re-visit their view in mid-July.
Here is a
novel new game that America's youth seems to have
embraced..."Sack Tapping." In this game victims are slapped or punched in the
groin. It is unclear how one determines who has won this game or how one keeps
score. But, doctors are reporting cases of blunt force trauma to the testicles
where the organ has twisted up to 360 degrees. Anyone for a nice game of lawn
croquet?
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 Interested
in reading more articles like the ones found in the Advisor? Visit the
rapidly growing Rounds Online.
A blog maintained by the MD Preferred team.
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