Open the cover of virtually any trade publication, scroll through VIN, or join a veterinary Facebook group and it won’t take long to find articles, posts, and ensuing arguments around non-compete agreements. While we don’t have “the” answer—we don’t believe a single answer fits every situation—we’ve turned to two experienced veterinary professionals to hear their unique perspectives on non-compete agreements in today’s market.
Mel Striyle, DVM — Practice owner and medical team coach
Your practice is your baby—I get it. I built my practice with blood, sweat, tears, and many sleepless nights filled with endless worry. Like me, you’re the one who has been willing to put in the extra work, and sacrifice time with family and friends. You do what others are unwilling to do and you can finally step back and see the fruits of your labor. In fact, you’ve grown enough that you need to hire an additional doctor (or two). Congratulations!
I remember the days when I’d post an ad for an associate veterinarian and receive five or six resumes from highly qualified vets within days. This gave me the luxury of truly choosing—or attempting to truly choose—the best fit for my hospital. Right now, however, this isn’t the case. Instead, owners are posting ads in multiple locations, hiring recruiters, and asking everyone they know to help them find someone with a pulse and a DVM degree who is looking for a job.
After months of searching, you finally find an associate who seems to be a good fit, and you prepare an employment contract. It makes sense, especially in today’s employee-driven market, to want to protect absolutely every aspect of your practice. Of course, you expect your new associate to thrive in your practice and become a long-term team member. But, even with the best of intentions on both sides, that sometimes doesn’t happen. You’ve heard horror stories of disgruntled associates opening up a practice “right across the street,” and you want some level of protection.
Are non-compete agreements legal and enforceable?
I remember signing my first contract, complete with a non-compete clause, as a young, eager associate veterinarian. At that time—more than 25 years ago—I had no idea how truly unenforceable that tiny sentence in my contract was. In reality, non-compete agreements are either not legal or not enforceable in most states. Forcing a veterinarian to fulfill a contract obligation, or threatening them with the financial ramifications of a non-compete agreement, only further soils the relationship. And, the damage a disgruntled vet can do to your current practice culture and client experience is, in most instances, far worse than any “damage” they can do by leaving—even if they join the hospital down the street or open their own place nearby.
Instead of a non-compete…
A healthy practice culture is your best offense against an associate or support staff member leaving. Growing and vehemently protecting your practice culture helps ensure your valued team members want to stay. However, even with a great culture, it sometimes doesn’t work out for one reason or another. So, what can you do?
You can protect your proprietary information, intellectual property, and client list—and these clauses are enforceable. Hire a good contract attorney to ensure your contract includes proper verbiage that addresses these items. It will be money well spent.
Devin Corban, BPM — Former veterinary hospital administrator and operational coach
As someone who has led within the corporate and private veterinary industry, and now works as an operational coach for Blue Heron Consulting, I am often faced with questions surrounding non-compete agreements, especially when helping new veterinarians. Contracts can be daunting, considering everything you want to include, and the things you may not know to include. After all, this is your baby that you have worked hard to build, and you are now letting someone in on a close and personal level.
The fact of the matter is that non-compete agreements, regardless of how you write them, offer little to no protection. In fact, they are essentially illegal in California, North Dakota, the District of Columbia, and Oklahoma, with more states following suit regularly. The remaining states that have not yet outlawed non-compete agreements make it nearly impossible to enforce them. However, despite the lack of protection non-competes provide, they are included in many contracts.
Why do employers want non-compete agreements?
When I am creating a new contract, or advising someone in the process, I ask the question, “What is your goal with the non-compete?”
Typically, the answer is something along the lines of, “I worked hard to build what I have and learn what I now know. It is to ensure an associate doesn’t learn all my secrets, run off, and use them against me!”
Non-compete agreements merely provide the feeling of being safe. If someone truly wants to leave, they can and will—and you likely have no actual protection. The only “protection” a non-compete may provide is as a deterrent for someone who may not have the legal knowledge you now do. However, if they really want to leave, it will be only a matter of time before they figure it out.
Knowing that non-competes are not enforceable, if business protection is your goal, is there a better way? My answer to that question is: Yes, foster a good work environment!
You won’t have to worry about someone leaving if they never want to leave. This may sound cliché, but it is true. People leave a job because they are unhappy with their current situation. The one caveat is someone who leaves for family reasons, and if this is truly the case, they are typically leaving the area entirely, in which case there is no concern about competition.
The legal question still remains about how to protect yourself should something happen, and an associate leaves. While a non-compete may be hard to enforce, your intellectual property can be much easier to protect. After all, that is what is really at stake here. If you are like most other owners in this position, you already have competition. What makes you unique and successful is what you know and how you use it.
With the proper verbiage from good legal counsel, you can write a non-disclosure agreement (NDA) into your contract. NDAs are widely accepted and far more enforceable. If the contract is breached, any repercussions you have built in will be far more enforceable, and yield a much higher chance of serving your purpose.
Inspire Veterinary Partners is pioneering a new way to foster healthy practice culture. With our employee-owned equity model, you have a voice in creating a fulfilling, rewarding work-place where team members at all levels want to build their career. Contact us to learn more about how to keep your associates happy, so there is no need to think about non-compete agreements.