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Breaching a non-compete clause has consequences
Much more is at stake than enforceability; your career is at risk


DVM360 MAGAZINE


How deep are your pockets?

Fair or not, there is some truth to the axiom that civil litigation frequently is won by the party with the most money to spend on it. If you are independently wealthy, it is probably economically feasible to violate a non-competition agreement and plan to prevail. On the other hand, if your ex-employer has more financial dry powder than you do, watch out when his lawyers start loading their muskets.

Employment-contract litigation is not covered by the standard AVMA PLIT insurance. Such litigation usually is paid for, out of pocket, by each side. And the costs mount by the hour — for every memo, telephone call, meeting, e-mail, letter, pre-trial motion, bit of library or internet research, interview and deposition your case demands.

Remember how you make sure that you do a full set of X-rays and blood work on every potentially serious case "just to be thorough and meet the professional standard of care?" Lawyers do the same. They do, and charge for, everything they deem necessary in the legal matter they are handling. It can get pretty expensive: Is your bank account litigation-ready?

Planning to take another job?

Let's say you don't feel that morally obligated to comply with the non-compete you signed "because my boss forced it down my throat." Therefore, you figure it is pretty much OK to just move down the street and work at a competitor's practice. The competitor may not particularly care that you violated your prior non-compete, but remember that the new boss may not be your last boss.

When you decide to move to the next job in town or even to one in another state, is it inconceivable that the owner of that "dream practice" you have been looking for your whole professional life might call the boss you burned and ask him whether you complied with your non-compete?

Personally, I simply ask interviewee veterinarians whether they have ever acted in violation of employment contracts they have signed. They can lie, of course. But if I find out they have done so either before or after they are hired, that fact impacts whether I hire them (I won't) and whether I keep them on any longer than contractually necessary (I don't).

Does it seem unfair to ask? It is dumb not to ask. Employers should always consider whether they are subject to litigation themselves for knowingly encouraging and abetting the violation of another's contract.

The perfect partnership

Finally, what happens when you have early-on violated that non-compete and years later you are considered for partnership at some super-lucrative animal hospital?

I recommend to my large-practice clients that they strongly consider if trustworthiness is important to them in deciding whether to take on someone as a partner.

Inevitably the answer is yes.

If that is the case, I encourage the existing partners to make telephone or letter inquiries to all of the candidate's former employers regarding any contractual violations, both those pursued through litigation and those which were waived.

I also urge that partnership and shareholder agreements contain a "material misstatement" clause permitting the orderly expulsion of a partner or shareholder who previously violated an employment agreement and failed to disclose it to the partnership.

Dr. Allen is president of the Associates in Veterinary Law P.C., which provides legal and consulting services to veterinarians. Call (607) 754-1510 or visit


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Source: DVM360 MAGAZINE,
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