Geographic restrictions, often referred to as non-compete clauses or restrictive covenants, are a common feature in physician employment contracts. These provisions restrict where a physician can practice after leaving a position, typically within a specified geographic area and for a defined period. While employers use geographic restrictions to protect their business interests, they can have significant implications for a physician’s career mobility, income, and personal life.

Understanding the impact of these restrictions is essential before signing a contract. This guide explores how geographic restrictions work, their potential effects, and strategies for negotiating terms that balance your career goals with employer concerns.

1. What Are Geographic Restrictions in Physician Contracts?

Geographic restrictions are legal agreements that limit where a physician can work within a specific radius of their current practice for a set period after leaving the employer.

Key Features of Geographic Restrictions:

• Defined Radius: Specifies a geographic area, such as a 10- or 20-mile radius from the practice location.
• Time Limit: Restricts practice within the area for a certain period, often 1–2 years.
• Scope of Practice: Applies to the physician’s specialty or similar medical services.

Purpose: These restrictions are designed to prevent departing physicians from competing with their former employer or taking patients with them.

2. Potential Impacts of Geographic Restrictions

Geographic restrictions can significantly influence various aspects of a physician’s career and personal life.

2.1 Career Mobility

• Restrictive covenants may limit your ability to accept new opportunities in the same area, forcing you to relocate or commute long distances.

2.2 Patient Relationships

• If you’ve built strong patient relationships, a non-compete clause may prevent you from continuing to care for those patients if you leave the practice.

2.3 Financial Stability

• Geographic restrictions can lead to gaps in employment or increased relocation costs, impacting your financial security.

2.4 Personal Life

• Relocating due to geographic restrictions can disrupt family routines, children’s schooling, or a partner’s employment.

2.5 Future Negotiations

• A restrictive covenant in your current contract can affect your ability to negotiate favorable terms in future agreements, especially if employers perceive it as limiting your availability.

3. Questions to Ask About Geographic Restrictions

To fully understand how a geographic restriction might impact you, ask these questions during contract review:

1. What is the radius of the restriction?
   • Is the area reasonable, given the population density and practice opportunities?
2. How long does the restriction last?
   • Does the time limit align with industry norms (typically 1–2 years)?
3. What locations are included?
   • Does the restriction apply to all practice locations or just the primary site?
4. Does the restriction apply to all forms of employment?
   • Can you work in non-clinical roles, telemedicine, or different specialties within the restricted area?
5. Are there exceptions for termination?
   • Does the restriction apply if the contract ends without cause or if you’re terminated?

4. Red Flags to Watch for in Geographic Restrictions

Certain terms in geographic restrictions can be overly broad or unfair, putting you at a disadvantage. Look for these red flags:

4.1 Excessive Radius

• A radius that spans 50 or more miles in urban areas may unnecessarily limit your job options.

4.2 Multiple Locations

• Restrictions that apply to all practice locations, even ones you rarely worked at, can be overly burdensome.

4.3 Prolonged Timeframes

• Time limits exceeding two years are uncommon and may not hold up in court, depending on state laws.

4.4 Lack of Clarity

• Vague language about the scope of the restriction can lead to disputes about its enforceability.

4.5 Applicability to Termination Without Cause

• Restrictions that apply even if you’re terminated without cause may be unreasonable.

5. Negotiating Geographic Restrictions

Geographic restrictions are often negotiable, and addressing them during contract discussions can help ensure the terms are fair and manageable.

5.1 Narrow the Radius

• Request a smaller radius, especially in densely populated areas where practices are closely spaced.

5.2 Limit the Scope

• Negotiate to apply the restriction only to the primary practice location or a specific specialty.

5.3 Reduce the Timeframe

• Advocate for a shorter time limit, such as one year instead of two.

5.4 Include Exceptions

• Request exceptions for non-compete enforcement in cases of termination without cause.

5.5 Define Terms Clearly

• Ensure the contract specifies which types of work (e.g., telemedicine, consulting) are exempt from the restriction.

6. State Laws and Enforceability of Geographic Restrictions

The enforceability of geographic restrictions varies by state, with some jurisdictions placing limits on or outright banning non-compete clauses for physicians.

States with Physician-Specific Restrictions:

• California: Generally prohibits non-compete clauses, making most geographic restrictions unenforceable.
• Massachusetts: Requires geographic restrictions to be reasonable and provide compensation during the restricted period.
• Texas: Mandates that geographic restrictions must allow physicians to access their patients’ medical records to notify them of the relocation.

Key Takeaway:

Consult with a healthcare attorney to understand the laws in your state and how they impact the enforceability of the geographic restrictions in your contract.

7. Strategies for Protecting Yourself

To minimize the impact of geographic restrictions, consider these strategies:

1. Request a Buyout Clause
   • Negotiate for the option to pay a fee to void the restriction if you need to practice within the restricted area.
2. Seek Legal Advice
   • Have a healthcare attorney review the restriction to ensure it is enforceable and fair.
3. Plan Your Career Path
   • If possible, consider how the restriction aligns with your long-term goals before accepting the position.
4. Maintain Flexibility
   • Explore non-clinical roles, telemedicine opportunities, or alternative specialties that may not be subject to the restriction.

Geographic restrictions in physician contracts can have a profound impact on your career mobility, financial stability, and personal life. By thoroughly understanding these clauses, identifying potential red flags, and negotiating favorable terms, you can protect your interests and avoid unnecessary limitations.

Always consult with a healthcare attorney or contract review specialist to evaluate the enforceability of geographic restrictions and advocate for terms that align with your goals. With careful planning and negotiation, you can ensure your physician contract supports your career aspirations without unnecessary constraints.