QUESTION

Are non-competes in physician employment agreements truly enforceable?

Each state is different, but in Illinois, physician non-competes are enforceable if they are reasonable, are ancillary to an otherwise valid contract, and are supported by adequate consideration. The reasonableness of the non-compete is subject to a three-prong test. The non-compete must (i) protect a legitimate business interest; (ii) not impose undue hardship on the physician; and (iii) not violate public policy. Under the “legitimate business interest” prong of the test, courts look to the totality of the circumstances in evaluating reasonableness including the temporal and geographic scope of the non-compete, whether the employer has “near permanent” customer (patient) relationships, and whether the employee acquired confidential information during the course of the employment. Further, Illinois courts generally hold that continued employment for two years or more constitutes adequate consideration for a non-compete. If a non-compete meets all of these requirements, courts will enforce them.

ASG Law can advise you with respect to physician-facility or physician-practice group agreements.