Validity of Non-compete

[PTandrew]

Hi all,

I am looking at the enforceability of a non-compete agreement I signed as an independent contractor physical therapist in Arizona. I work as an independent contractor for a company that contracts PT services in to country clubs for their members. I have found that their business model actually had me violating federal law in some cases and want to get out of the contract to distance myself from the situation but would like the ability to continue seeing clients in the clubs as they were the basis of my business model moving forward. The contract specifically states that the "Therapist agrees not to solicit clients of the Agency within the state" for one year after termination of agreement. It additionally states that I cannot provide PT services to country clubs or sport specific clubs within 5 miles of all locations I provided services for behalf of the agency.

Thanks in advance.

 

[quincy]

Hi all,

I am looking at the enforceability of a non-compete agreement I signed as an independent contractor physical therapist in Arizona. I work as an independent contractor for a company that contracts PT services in to country clubs for their members. I have found that their business model actually had me violating federal law in some cases and want to get out of the contract to distance myself from the situation but would like the ability to continue seeing clients in the clubs as they were the basis of my business model moving forward. The contract specifically states that the "Therapist agrees not to solicit clients of the Agency within the state" for one year after termination of agreement. It additionally states that I cannot provide PT services to country clubs or sport specific clubs within 5 miles of all locations I provided services for behalf of the agency.

Thanks in advance.

Noncompete agreements are enforceable in Arizona if they are used to protect legitimate business interests and are not overly broad in time or geographic distance, preventing an employee from finding work elsewhere.

You would need to have your employment contract and the noncompete agreement reviewed in their entirety by an attorney in your area for an analysis and legal opinion.

From this distance and based strictly on what you have written here, I would say the one year period of time within which you are held to the agreement is unreasonable as would be a restriction on your working in the state, but soliciting your current employer's clients or working within the 5 mile restricted areas could be considered reasonable and enforceable.

Arizona courts are known to "blue pencil" or cross out those parts of a noncompete that are found overly restrictive while enforcing those parts of the noncompete that are not overly restrictive.

Because noncompete agreements are judged on a case-by-case basis - and as said earlier - you should seek out a personal review.

 

[PTandrew]

What about the exemptions for public policy addressing a patient's right to choose the medical provider of choice? I have seen this argument brought up numerous times as reasons that a non compete is unenforceable.

 

[quincy]

What about the exemptions for public policy addressing a patient's right to choose the medical provider of choice? I have seen this argument brought up numerous times as reasons that a non compete is unenforceable.

The medical profession as a whole discourages (or at least does not encourage) the use of noncompete agreements.

 

[adjusterjack]

What about the exemptions for public policy addressing a patient's right to choose the medical provider of choice?

A physical therapist in a country club is nothing anywhere close to being a "medical" provider.

 

[quincy]

A physical therapist in a country club is nothing anywhere close to being a "medical" provider.

It is not the location of care but the type of care. Physical therapists can make use of pools, saunas and hot tubs when treating patients.

Here is a link to "The Use, Abuse, and Enforceability of Non-Compete and No-Poach Agreements," written by Professor Evan Starr for the Economic Innovation Group (EIG), which is an informative look at noncompetes in this country.
https://eig.org/wp-content/uploads/2019/02/Non-Competes-Brief.pdf

 

[PTandrew]

A physical therapist in a country club is nothing anywhere close to being a "medical" provider.

Providing medical services makes me a medical provider. That I do so in a country club for members is irrelevant.

 

[quincy]

Providing medical services makes me a medical provider. That I do so in a country club for members is irrelevant.

Continuity of patient care can be important. If you are the only physical therapist working with some of the patient-clients, a court might be reluctant to enforce the noncompete.

I know of a couple of states (Massachusetts is one) that will not enforce noncompetes against physicians but court treatment of physical therapists is apt to differ.

The recommendation is again to consult with an attorney in your area. You might want to ask this attorney how best to report your suspicion that your current employer is violating federal law.

Good luck.