1. Prevent the use of trade secrets or other confidential information, or
2. Protect its “customer” or referral relationships.

Bradden Backer, JD, from DeWitt LLP concluded, “The unique nature of emergency medicine creates a strong argument for challenging the enforceability of post-employment limitations on such practitioners’ ability to compete. Unlike many physicians, emergency medicine specialists usually do not have extended or repeated business relationships with patients. They also seldom secure patients through referral sources. Nor do patients customarily seek out a particular emergency room physician when faced with a medical emergency. Accordingly, a former employer may well have difficulty justifying the need to bar a departing emergency physician or similarly focused health care provider from working nearby or assisting former patients.”

Despite these characteristics of the practice of emergency medicine that challenge the enforceability of restrictive covenants, if non-compete clauses exist, they certainly still apply significant pressure on the contracted physician. Even if the risk of a successfully enforced non-compete is low, the risk of having to endure such arduous legal procedures and steep financial ramifications may sway any emergency physician away from continuing to practice in their hometown. In our experience, the mere presence of non-compete clauses in agreements with the previous contract holder put all parties—the hospital, our group, and the individual physician—at risk of litigation.

Given the potential repercussions to the individual physician and the lack of damages to the employer, both ACEP and the American Academy of Emergency Medicine (AAEM) oppose the use of restrictive covenants in employment agreements. ACEP outlines this clearly in its policy on Emergency Physician Rights and Responsibilities, stating, “Emergency physicians have the right to be free from restrictive covenants that restrict their ability to practice medicine, for a period of time or in a geographic area, upon termination of employment or a contract. Such restrictions are not in the public interest.” AAEM includes this in its Policy on Ethical Business Practices in Emergency Medicine by stating, “No member shall engage another emergency physician in a contract that includes restrictive covenants, due process waivers, or a non-reciprocal right of termination without cause.”

The Advocacy-Based Approach

Ongoing advocacy is needed at the state and federal level to ensure that legislators understand the full scope of consequences for restrictive covenants, especially for hospital-based physicians, such as emergency physicians. What’s more, the atypical character of physician-patient relationships in the emergency department context warrants a particularly critical assessment by courts when considering limiting the post-employment competition of such practitioners.