Noncompete clauses: a contract provision that has exhausted its usefulness?

Area of Science:

• Medical Law
• Radiology Practice Management

Background:

• Noncompete clauses (NCs) are prevalent in physician employment contracts, including those for radiologists.
• NCs restrict radiologists' professional activities during and after employment, with enforceability often depending on reasonableness of duration and geography.

Purpose of the Study:

• To evaluate the continued necessity and enforceability of noncompete clauses for radiologists in light of evolving practice patterns, particularly teleradiology.
• To assess radiologists' perspectives on the impact of teleradiology on the relevance of NCs.

Main Methods:

• An online survey was distributed to 86 University of Maryland radiology alumni to gather data on NC prevalence, terms, and perceived usefulness.
• A legal database search (Westlaw) was conducted to review adjudicated cases involving radiologists' NCs.

Main Results:

• Of the 21 surveyed alumni, 57.1% are subject to NCs with post-termination restrictions of 1-2 years and geographic limits of 7-50+ miles.
• Radiologists expressed divided opinions on NCs' necessity amid teleradiology, with 36.8% finding them more necessary and 26.3% less necessary.
• Court cases show enforcement of NCs with durations of 1-5 years and geographic limits of 15-40 miles.

Conclusions:

• Despite significant changes in radiology practice, NCs remain in widespread use and are upheld by courts.
• The utility of NCs in the current teleradiology era is uncertain, necessitating potential modifications to contracts.
• Employment agreements should explicitly address the implications of teleradiology within noncompete provisions.