Can I Get Out of a Noncompete Agreement? If So, How?

Carolyn Buppert, MSN, JD

Disclosures

June 07, 2018

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Question

I signed a noncompete agreement as part of my nurse practitioner (NP) employment contract. Now I've been offered my dream job with another practice that is within the geographic area restricted by the contract language. How can I get out of the noncompete agreement?
Response from Expert Carolyn Buppert, MSN, JD
Healthcare attorney

A noncompete agreement (also called a "restrictive covenant") is a promise not to compete with an employer. The language restricts an employee from practicing in the same specialty (or even the same industry) as the employer, within a set number of miles from an employer's business, for a set period of time after the employee leaves the employer's business.

There's only one feasible way to get out of a noncompete agreement: Convince the employer to waive that requirement, in writing. That is not an easy thing to accomplish, but it's the best approach, in my opinion.

There are other approaches, but they aren't feasible. You could take the new job and hope the former employer won't take you to court for breach of contract. There is no way to predict what the employer will do. Your current employer might ask for monetary damages and an injunction to keep you from working for the new employer. You will need to hire an attorney to represent you. If you lose, you will need to pay damages to your former employer. Depending on the contract language, you may be required to pay the employer's attorney's fees as well. And your new employer isn't going to be happy about an injunction. If you have a contract with the new employer and an injunction which keeps you from working, then you will be breaching your contract with your new employer.

Another option is to file a lawsuit against your employer, asking for a court ruling that the restriction is invalid because it doesn't conform with state law and/or is overreaching. In some states, restrictive covenants are not enforceable. In other states, they are enforceable only if "reasonable." A judge would decide whether the noncompete clause is reasonable. You'd need to hire an attorney who is willing to take the case and go to court. Whether you win or lose, you will be out of thousands of dollars for attorney's fees. And either way, you will have soured the relationship with your former employer.

Therefore, the best way to get out of a noncompete agreement is to get the current employer to agree to let you go. Ask for an appointment and present the situation. You might argue that the new job is not in competition with the employer. Or, if the new job is in competition, you might propose some deal between you and the employer which would compensate the employer for any business he or she would lose. If the employer says no, then you must abide by the terms of your contract.

The ultimate take-home message is: When signing a contract, don't agree to restrictions on your future employment. If you agree to restrictions, only agree to small restrictions, so that you still have opportunities to work in your town. For example, if the contract offer says you may not practice within 25 miles of any practice location of the employer, for 2 years after leaving that employ, negotiate that down to agreeing that you won't practice dermatology within 5 miles of one specific address, for 1 year after leaving the employ.

I've advised NPs to walk away from contracts with noncompete restrictions. Some have walked away, and then have gotten jobs where the employer doesn't require a noncompete agreement. Some have signed, against my advice, and now are sorry. One NP who was subject to a restrictive covenant took a job as a registered nurse for the year after leaving her employer, then joined the practice next door. It was a hardship for the NP for that year, but it was better than being sued by the former employer.

Occasionally, an NP will buy his or her way out of a noncompete clause by paying the employer some amount for a release. Sometimes, the NP decides to move out of town, and then the problem goes away.

An employer doesn't have a right to limit your future opportunities, but if you agree to it, then you've promised, and it is probably going to cost you something to get out of it.

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