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Competition from former employees

Discussion in 'Practice Management' started by admin, Apr 6, 2008.

  1. admin

    admin Administrator Staff Member


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    Many emploment agreements have clauses in them regarding competition in the area after the ending of employment. In many cases courts have held them unreasonable. Reasonable ones have been upheld.
    While specific to the USA, I came across this commentary:

    I really like the "To be geographically reasonable, the agreement may restrict only that area in which the physician developed patient relationships using the practice group's resources." as sensible.

    Full comentary of Central Indiana Podiatry v. Kenneth Krueger

    What say you?
     
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  3. NIKO

    NIKO Member

    The question of geographical reasonability has always been a vexed one. In general courts will seek not to intervene in commercial contractual agreements. The concern is that they will impune the nature of such agreements and therefore the effective nature of business. It is a matter of public policy.

    This is the case mostly in Australia and I would say in most jurisdictions with particular reference to the USA and anticompetitive clauses. However, Courts will more than likely intervene in situations which are too restrictive and onerous. The balance is for the judiciary to reinforce the message that individuals can knowlingly enter into contractually binding agreements v restrictive agreements which are construed as being unfair.

    The legality of contractual terms are often investigated on the basis of specific clauses, then in the context of the overall agreement. The striking out of a specific clause however, will not necessarily strike out the entire agreement. The use of such clauses however, would be part of any agreement of this type and can at times be implied clauses of employment contracts. Other related issues regarding competition can revolve around confidentiality, the use of confidential information from one business in the running of another and so on.


    NIKO
     
  4. Lorraine Munro

    Lorraine Munro Active Member

    Why would you even bother going to court. I believe life is too short. If you are a reasonable practitioner and have been good to YOUR clients they are not going to leave . They WILL be faithful to you. After all there are enough busness for everyone!!! Isn't there?
    Cheers Lorraine
     
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