Understanding Physician Noncompete Agreements: What Every Healthcare Professional Should Know Before Signing
By St. Johns Law Group
Whether you are accepting your first position after residency, joining an established medical group, purchasing a healthcare practice, or transitioning to a new opportunity, one provision of your employment agreement deserves particularly careful attention: the restrictive covenant, commonly referred to as a noncompete agreement.
Noncompete agreements can significantly affect where you practice, how you transition to a new employer, and your ability to continue serving patients after your employment ends. For healthcare employers, these agreements are equally important because they help protect patient relationships, business goodwill, referral networks, and substantial investments made in recruiting and developing providers.
Understanding how restrictive covenants work—and reviewing them before signing—can help both healthcare professionals and healthcare organizations avoid costly disputes later.
What Is a Physician Noncompete Agreement?
A physician noncompete agreement is a contractual provision that places certain restrictions on a healthcare provider following the end of an employment or ownership relationship.
Depending on the agreement, restrictions may involve:
- Geographic areas where services may be provided
- Length of the restriction
- Medical specialties covered
- Soliciting former patients
- Recruiting employees
- Confidential business information
- Referral sources
- Ownership interests
Although these provisions are common, every agreement should be tailored to the specific healthcare practice and the legitimate business interests it seeks to protect.
Noncompete Agreements Affect More Than Physicians
Restrictive covenants are common across many healthcare professions and organizations.
St. Johns Law Group represents clients in matters involving:
| Healthcare Professionals | Healthcare Businesses |
|---|---|
| Physicians | Medical Practices |
| Dentists | Urgent Care Centers |
| Endodontists | Ambulatory Surgery Centers (ASCs) |
| Orthodontists | Medical Spas |
| Oral & Maxillofacial Surgeons | Imaging Centers |
| Optometrists | Dialysis Centers |
| Ophthalmologists | Home Health Agencies |
| Chiropractors | Behavioral Health Practices |
| Physical Therapists | Physician Groups |
| Occupational Therapists | Dental Practices |
| Psychiatrists | Management Services Organizations (MSOs) |
| Psychologists | Independent Practice Associations (IPAs) |
| Nurse Practitioners | Professional Corporations and Professional Associations |
| Physician Assistants | Specialty Medical Practices |
| Behavioral Health Providers | Veterinary Practices |
Because every healthcare business operates differently, restrictive covenant provisions should reflect the unique needs of the practice, specialty, patient population, and marketplace.
Why Healthcare Employers Use Restrictive Covenants
Healthcare organizations invest significant time and financial resources in building successful practices.
Employers often seek restrictive covenant provisions to help protect:
- Patient relationships
- Practice goodwill
- Referral sources
- Confidential business information
- Recruiting investments
- Marketing efforts
- Training and professional development
- Long-term business stability
When properly drafted, these agreements can help preserve the value of a healthcare business while providing reasonable expectations for both parties.
What Healthcare Professionals Should Review Before Signing
Before signing an employment agreement, healthcare professionals should carefully review the restrictive covenant provisions and ask questions such as:
- How large is the restricted geographic area?
- How long will the restrictions last?
- Which services are covered?
- Are multiple office locations included?
- Does the restriction apply if employment ends without cause?
- Can I continue treating existing patients?
- Does the agreement prohibit recruiting employees?
- What happens if the practice is sold?
- Are there exceptions if I become disabled or retire?
Understanding these provisions before signing often provides the greatest opportunity to negotiate modifications.
Restrictive Covenants Often Appear in Other Agreements
Many healthcare organizations operate under business structures that involve more than traditional employment agreements.
Restrictive covenant language may also appear in:
- Shareholder Agreements
- Buy-Sell Agreements
- Management Services Agreements (MSAs)
- Professional Services Agreements (PSAs)
- Independent Contractor Agreements
- Practice Purchase Agreements
- Partnership Agreements
- Medical Director Agreements
When multiple agreements govern the same business relationship, it is important that the documents work together and do not create conflicting obligations.
Common Sources of Disputes
Restrictive covenant litigation frequently arises when a provider leaves a healthcare organization.
Typical disputes involve:
- Opening a competing practice
- Joining a nearby medical group
- Soliciting former patients
- Recruiting former employees
- Ownership buyouts
- Confidential business information
- Referral relationships
- Enforcement of employment agreements
- Interpretation of restrictive covenant language
Many disputes can be minimized through careful drafting and proactive legal planning before disagreements develop.
Trial Experience Can Make a Difference
Although many restrictive covenant disputes are resolved through negotiation or mediation, some require emergency court intervention.
Healthcare employers may seek temporary injunctions to prevent alleged violations, while healthcare professionals may challenge the scope or enforceability of restrictive covenant provisions.
In 2026, we prevailed in a week-long jury trial of an 8-figure partnership dispute.
Read About: 3 Jury Trials, 3 Months, 3 Wins
Douglas N. Burnett has extensive experience representing businesses and professionals in complex commercial litigation involving contract disputes, injunction proceedings, shareholder conflicts, breach of fiduciary duty claims, and closely held business disputes. That trial experience helps clients evaluate legal risks and develop practical strategies whether a matter settles or proceeds to court.
Preventing Disputes Through Better Agreements
The most effective restrictive covenant agreements are carefully tailored to the parties and their business objectives.
Healthcare employers should periodically review:
- Employment agreements
- Management Services Agreements (MSAs)
- Professional Services Agreements (PSAs)
- Shareholder agreements
- Operating agreements
- Partnership agreements
- Confidentiality policies
- Physician onboarding documents
Likewise, healthcare professionals should have employment agreements reviewed before signing rather than waiting until a dispute arises.
How St. Johns Law Group Helps Healthcare Clients
Our attorneys represent healthcare professionals and healthcare organizations throughout Northeast Florida in matters involving:
- Physician employment agreements
- Restrictive covenant agreements
- Management Services Agreements (MSAs)
- Professional Services Agreements (PSAs)
- Medical practice acquisitions and sales
- Healthcare business litigation
- Commercial real estate and medical office leasing
- Outside General Counsel services
- Corporate governance
- Business succession planning
Because healthcare businesses often face legal issues that extend well beyond employment law, our multidisciplinary team works together to provide coordinated legal solutions tailored to the needs of each client.
Protect Your Career and Your Practice
A restrictive covenant can influence where you work, how you transition between employers, and the future value of a healthcare business. Taking the time to understand these provisions—and seeking experienced legal guidance before signing—can help protect your professional opportunities and reduce the risk of future disputes.
If you are a physician, healthcare professional, medical practice owner, or healthcare employer with questions about a noncompete agreement or restrictive covenant, the attorneys at St. Johns Law Group are ready to help.