Courtesy of Jayme R. Matchinski, Esq
There are many different types of non-compete agreements, and the following is a sample that contains restrictive covenants for distance, geographic area, and length of time upon termination of the employment agreement:
Sleep Lab acknowledges that Medical Services related to sleep disorders and sleep studies to be rendered pursuant to this Employment Agreement are of a special character that has unique value to Sleep Lab, the loss of which cannot be adequately compensated by damages in an action at law. In view of the unique value to Sleep Lab of sleep study related services provided by Employee, or any Sleep Lab physician that is Board Certified or Board Eligible in Sleep Medicine, and for which Sleep Lab has contracted hereunder, and because of the Confidential Information to be obtained by or disclosed to Employee and to Sleep Lab, and as a material inducement to Sleep Lab to enter into this Agreement and to pay Employee for Medical Services under the compensation set forth in this Agreement, and other valuable consideration, Employee and Sleep Lab covenant and agree that during the term of this Agreement and for a period of one (1) year after Employee and Sleep Lab’s relationship ceases for any reason to be engaged by Sleep Lab or upon the expiration or termination of this Agreement for any reason, Sleep Lab shall cause Employee and any Sleep Lab physician Board Certified or Board Eligible in Sleep Medicine during the term of this Agreement to limit their provision of sleep study related Medical Services, as defined herein, in Illinois, to the following geographic area: ____________________. Furthermore, Sleep Lab and Employee or any Sleep Lab physician Board Certified or Board Eligible in Sleep Medicine shall not, directly or indirectly, provide sleep study related Medical Services in states outside Illinois within ______ miles of any city in any other state where Employee has provided sleep study related Medical Services to Sleep Lab, whether acting as Sleep Lab, individual owners, as an Independent Contractor, or as a partner, part of a joint venture, or as an officer, director, stockholder, agent, or employee for any person, firm, partnership, hospital, or any other entity, enter into, participate in or with, or engage in or provide sleep study related Medical Services to any entity other than Sleep Lab. The period of time during which Employee or Clinic is prohibited from engaging in certain business practices pursuant hereto shall be automatically extended by any length of time during which Employee and/or Sleep Lab is in breach of or violates any provision of this Section.
In the event that, and notwithstanding the foregoing, any of the provisions of this Section shall be held to be invalid or unenforceable, the remaining provisions shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included. In the event that any provision hereof relating to time period and/or areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, the time period and/or areas of restriction shall be deemed to be rendered to such amounts that thereafter shall be the reasonable time period and/or areas which such court deems reasonable and enforceable.
It is understood by and between the Parties hereto that these Restrictive Covenants are essential elements of this Agreement and are necessary to protect Sleep Lab’s legitimate business interests. Such covenants by the Sleep Lab shall be construed as agreements independent of any other provision in this Agreement. The existence of any claim or cause of action of the Sleep Lab, whether predicated on this Agreement, or otherwise, shall not constitute a defense to the enforcement by Sleep Lab of such covenants. Furthermore, the Parties agree that in the event of expiration or termination of this Agreement with Sleep Lab and a subsequent breach of the Restrictive Covenants herein, the damages and the method of payment described herein are fair and reasonable under the circumstances.
Sleep Lab and Employee agree that the limitations set forth in this Section are reasonable and necessary for the protection of the goodwill and business interests of Sleep Lab. Sleep Lab further recognizes that such competition, solicitation of patients and/or employees of Sleep Lab, and/or use of proprietary information and products, is presumed to cause irreparable injury and may be specifically enjoined by injunction. Sleep Lab further agrees that in the event that any of the Restrictive Covenants are violated by the Employee, Sleep Lab shall have a right to an injunction, whether by temporary or permanent restraining order, preliminary or permanent injunction, or otherwise, in order to restrain any further violation of such provisions. Such right to an injunction shall be in addition to, and not in limitation of, any other rights and remedies Sleep Lab may have against the Employee.
Notwithstanding any provision of this Agreement to the contrary, all of the terms of this Section shall survive the expiration or termination of this Agreement by either Party for any reason.
Jayme R. Matchinski, Esq, a partner with the law firm of Clark Hill PLC (www.clarkhill.com) in Chicago, concentrates on healthcare law and has counseled sleep disorder centers, physicians, and healthcare providers nationally. Send questions for the author to [email protected].