Conspiracy theory: Excluding competition from nearby veterinary clinics - DVM
  • SEARCH:
News Center
DVM Featuring Information from:

ADVERTISEMENT

Conspiracy theory: Excluding competition from nearby veterinary clinics
There are real-world effects if a handful of clinics from the same geographic area foster an anticompetitive environment.


DVM360 MAGAZINE


Let's consider what might unfold in Blackacre if a young veterinarian who's new in town agrees to one of these coincidentally similar contracts. Assume, for example, that Dr. Jones signs up to work at Blackacre Valley Animal Hospital.

First, when the initial year of work draws to a close, Blackacre Valley has little incentive to be realistic in offering a raise. Jones' bargaining position is effectively neutralized by the reality that he would have to move in order to take a job at another practice; no other Blackacre clinics fall outside his noncompete distance.

Second, Jones can of course challenge the noncompete, but in doing so he will incur large legal expenses, which would not likely be covered under his AVMA insurance.

Third, even if Jones has a winning case, he almost certainly would not be welcome to work at any of the other practices in town—not as long as he is embroiled in noncompete litigation. No other practice in Blackacre would want to commit a potential tort (a civilly actionable wrong) by cooperating with a doctor already allegedly acting in breach.

Finally, and most importantly, the effect on Jones' career is that he has been effectively foreclosed from staying in the Blackacre area. After taking one job, he is pretty much out of luck finding another. So in addition to having an extraordinarily poor bargaining position for trying to obtain a raise, he also has been placed in a position where he has to either leave town or open his own practice far from the main population center of Blackacre.

Conspiracy? Collusion? Maybe just a random coincidence?

Regardless, the real-world effect of this handful of employment agreements is establishment of an anticompetitive environment in Blackacre. The similarity of the contract terms might be simply happenstance; surely assembling real proof to the contrary would be very difficult. But provable or not, conspiracy to exclude competition is illegal and, most would agree, immoral.

On a final note, while constructing and contemplating the anticompetitive nature of our hypothetical, I couldn't help but be reminded of this anecdote my father told a hundred times if he told it once: My dad, Dr. Robert Allen, graduated from Cornell in 1939—after the stock market crash, but before the economic renaissance of World War II. As we know, much about the regulation of the practice of veterinary medicine was a lot less formal in that era. Many state board exams were really more of an "interview" than an evaluation of the candidate's scientific knowledge or clinical ability. And a veterinary job—like every other job—was damn hard to come by. So Dr. Allen headed to one of New York's neighboring states after finally being offered a position working with large animals. Of course, he had to get a license before he could start work. After a long trip, he sat down to answer questions from a group of local practitioners who served on the state board.

"So, who you going to be working for up here, Bob?" the first examiner asked.

"Dr. So-and-so," replied my dad.

"Oh, he's a good man and needs the help," he replied.

"But eventually, you plan to head back home to Binghamton where your family is from, right, Bob?" another board member asked.

Dad assured the group that he planned to marry his college sweetheart and settle in their hometown, 45 minutes south of Cornell.

"Well, you seem qualified to practice in this state, Dr. Allen," the first examiner said. "You can start work for Doc right away and we will send your license right up to him."

The license came and my dad left—as he promised.

Dr. Christopher Allen is president of Associates in Veterinary Law PC, which provides legal and consulting services to veterinarians. Call (607) 754-1510 or e-mail
.


ADVERTISEMENT

Source: DVM360 MAGAZINE,
Click here