More and more NPs facing "restrictive covenants"

A restrictive covenant (also called a non-compete clause) is an agreement by an employee not to compete with the employer, during the course of employment and for a time after the employee leaves. The agreement may be part of an employment contract, or may be presented separately.

Restrictive covenants are never good the the nurse practitioner (or physician or physician assistant). In a restrictive covenant, the employee promises not to practice within some number of miles (2, 5, 10, 15 and 25 are common numbers) for a period of time (1-5 years) after termination of employment. Sometimes, the restriction is "shall not practice as a nurse practitioner" and "sometimes the restriction is more narrow, such as "shall not practice in endocrinology."

It is never in the best interests of a nurse practitioner to give away future opportunities. Frequently, I receive calls from nurse practitioners who have signed a restrictive covenant, and then regret it when a dream job offer comes in. Once signed, it is very difficult to get out of the agreement. Sometimes, part of the agreement is that the nurse practitioner can buy his or her way out of the restrictions, for a very high price (often, a year's salary).

So what to do when presented with a restrictive covenant? First, get out a map and figure out how much medical business is conducted within the restricted radius. Decide whether you are willing to move out of town for your next job. If the restriction will keep you from accepting significant future opportunities, think about how much you want that job. Second, if you want the job and the restriction is severe, negotiate a smaller radius, or a narrowing of the restriction; say, agree not to practice within the specialty, in an office setting. That would keep the nurse practitioner's options open to practice in another specialty, in a hospital or in a nursing facility. And, the employer can feel secure that the nurse practitioner isn't going to take patients away from the practice when the nurse practitioner leaves.

I'm seeing more contracts with restrictive covenants -- for nurse practitioners and physicians -- than ever before. Employers don't have a right to restrict future employment opportunities, but many try and many succeed.

Source: Carolyn Buppert, NP, JD www.buppert.com