Non-compete agreements: When veterinary associates and practice owners clash
Editor's note: Non-compete agreements have become pervasive in veterinary medicine. This month DVM Newsmagazine begins a two-part series focused on trends and problems associated with non-compete covenants. Next month, veterinary legal expert Dr. James F. Wilson talks about the legal issues faced by owners and associate veterinarians as they relate to non-compete agreements.
National Report — When Dr. Christie Cichra graduated from veterinary school in 2006, she had a job lined up.
She was going to work in a Florida-based practice. The owner talked about an equity stake in the practice, but the dream never materialized after she signed a non-compete agreement. In fact, her boss decided not to sell afterall."I was naive," says Cichra, a University of Florida graduate.
Cichra joined the equine practice and began working there with the understanding that she would eventually take over the business, though she and her boss had not yet hammered out a legal agreement, she says. After working there for nearly a year, Cichra was worried that the deal might go south. After she pushed for a contract, the owner finally agreed, she says. But, the document made no mention of a future sale. Cichra worked with a lawyer to make changes to the agreement. She finally signed the contract, which included a non-compete covenant, and that was when it all fell apart.
"Within a few weeks (of signing), he said that he didn't want to sell the practice, and he wanted to give me a pay cut," she says. "So I left. I said, 'I can't do this.'"
And that's when the lawyers jumped in. Her former boss hired an attorney to try to get Cichra to adhere to the non-compete, which, according to the terms, barred her from practicing within a 30-mile radius from the clinic for two years.
The geographic restrictions of a non-compete can be hard to swallow for some associates. What's more, as an equine practitioner, the client pool is smaller.
"A 30-mile radius is pretty big, and there are a lot fewer horses (here) than cats and dogs," she says. "(The impact of the non-compete) is more devastating for an equine practitioner because we travel to farms. We're not just in one building each day."
For Cichra, the biggest concern after leaving her former employer's business was continuing to be able to practice. "If I didn't fight it, I wouldn't have been able to do what I wanted to do," she says.
And while there are two sides to every story, veterinary practice owners are worried about protecting their life-long investments. They entrust associates to enter their practice, take up the mission of the practice, bond with clients and help build the practice that they have nurtured.
Jockeying for clients is part of doing business in every industry, but a client list and its details are proprietary, notes Dr. Ted A. Sprinkle Jr., who is CEO and co-founder of Pet Partners, Inc. "Taking a client list is basically stealing whether you have an agreement or not. You can't be paid for working and think you own something that you don't," he says. "That happens a lot in this profession. Associates forget they were employed and had a salary."