If you’re considering signing on with a dental practice in the St. Louis area, there’s a good chance you’ll be asked to sign a Restrictive Covenant for dentists – AKA a non-compete agreement – with your employer.
During our decades of working with dentists who are considering entering such an agreement, or trying to get out of one to open their own practice, we’ve learned some key facts that every dentist should understand. Please keep in mind that some of these facts are specific to the St. Louis area, and of course you should consult with an attorney for legal advice.
1) If I go to work for an individual dentist, will I have to sign one?
With very few exceptions, you will be asked to sign an Employment Contract which contains a Restrictive Covenant. All DSO’s will require one.
2) What is the reason for a Restrictive Covenant for dentists?
An employer wants to be sure that an employee does not terminate employment with him or her and set up a practice nearby to attract patients away from their practice.
3) What is a “normal” Restrictive Covenant?
These can vary widely but in the Greater St. Louis area a 10-mile radius and 5 years is common. Outstate and rural practices may want a 15 or 20-mile radius.
4) Can Restrictive Covenants be enforced?
Yes, in most cases they are enforceable if they are “reasonable.”
5) What is a “reasonable” Restrictive Covenant?
That may differ from state-to-state and can vary with the location of a practice. The goal is to keep you from practicing in the area from which your employer draws his dental patients.
6) How is a Restrictive Covenant for dentists enforced?
If you are in violation of the terms of the Restrictive Covenant, your ex-employer can get an injunction blocking you from practicing dentistry.
7) Can you negotiate the provisions of the Restrictive Covenant?
Yes, it is sometimes possible to negotiate the terms – even with some DSOs.
8) What if my employer has multiple offices?
You should only have a Restrictive Covenant with respect to the location where you are primarily practicing dentistry.
9) What if the practice where I am working is sold, does my Restrictive Covenant apply and protect the new owner?
In Illinois, it appears that your Employment Contract is assignable. In Missouri, the situation is unclear. Consult your attorney in that situation.
10) Is there more I should know about Restrictive Covenants?
Yes, call Bill or Kim to discuss your particular questions. For legal questions, consult your attorney.
When you’re deciding whether to purchase your own practice or sign on with an employer, restrictive covenants (non-compete agreements) are a major consideration. Please feel free to give us a call or email us with any questions, and we’ll do our best to help or refer you to a trust attorney.