UNDERSTANDING NON-SOLICITATION CLAUSES IN EMPLOYMENT CONTRACTS
During the ODA’s upcoming Annual Session, I will be presenting a course along with Dr. Mark Alexandrunas regarding issues that dental practice owners and dentist-employees are frequently confronted with during their relationship with each other. We hope to share ideas in order to head off potential conflict between employer dentists and their employee dentists. We will present the course, “Dental Compliance: What You Need to Know as an Owner, Associate or DSO-Dentist,” on Friday, Oct. 1, at the Columbus Convention Center from 3:30 to 5:30 p.m. as part of the ODA’s 155th Annual Session. The Course Code is F39.
Last month, my column discussed covenants not to compete within employment contracts and corresponding issues that both the employer dentist and the employee dentist may want to consider.
Closely associated with – but separate from – non-compete clauses are clauses that prohibit solicitation of patients and employees. Sometimes these non-solicitation clauses deal with employee and patient solicitation separately but sometimes they deal with both issues in one clause. Either way, the basic concept is that upon the end of the employment relationship, the departing employee dentist will not solicit the dental practice’s patients for treatment and will not solicit the practice’s employees to come to work for the departing dentist at his or her new office.
There are several issues to consider when reviewing these clauses. The prohibition on soliciting employees and patients may not necessarily be tied to the restricted area of the non-compete clause. So the departing dentist may be prohibited from soliciting the former employer’s patients even though the departing dentist’s new practice is outside the restricted area of the non-compete clause.
Additionally, while these clauses have traditionally utilized language that prohibits the solicitation of employees and patients, recently I have seen contractual language that goes even further. For example, I have seen contracts that would prohibit the departing dentist from hiring the former employer’s staff members. Similarly, I have seen contracts that would prohibit the departing dentist from treating the former employer’s patients. These clauses go beyond just restricting solicitation of employees and patients. These prohibitions would apply even if the employee sought out the departing dentist for employment or the patient sought out the departing dentist for treatment.
Generally, courts in Ohio will enforce these provisions if they are reasonable. Determining what is reasonable can be tricky sometimes. Courts will give significant weight to an employer’s legitimate interest in protecting his or her business. Courts will also consider the burden placed on the employee dentist’s ability to earn a living and the potential impact on patients and their ability to get care from the provider of their choice.
These contractual provisions are important to each party to the contract. The employer dentist desires to protect his or her business since he or she has invested time, resources and effort into developing the practice’s employees and patient base. The employer does not want to have those assets misappropriated when an employee dentist departs employment. On the other hand, the employee dentist must take into consideration what post-employment restrictions he or she is comfortable with because those restrictions could impact on his or her ability to earn a living in the future.
