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Total Health Law Primer: The Key to an Enforceable Non-Compete Agreement

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Video Transcript

Caitlin: Hi, I'm Caitlin Lentz. This Total Health Law video primer explains a key ingredient to an enforceable non-compete agreement for a medical practice.

Courts typically decide the outcome of non-compete disputes based on consideration of many factors as required by state law. Generally speaking, non-compete agreements are considered restraints on trade that are disfavored under the law, unless the non-compete is narrowly tailored to a legitimate business need.

Ultimately, in a non-compete case, a court is called upon to make a determination of what is reasonable. If contractual restrictions on a person's ability to work are overly broad and, therefore, unreasonable, under the party circumstances, a court may not enforce the restrictions.

So, the key to designing an enforceable non-compete agreement is this, make your non-compete agreement narrow, not broad. Often, employers mistakenly feel more protected by broader non-compete terms, where narrow terms would adequately protect against the potential competition and be more enforceable.

So, make your non-compete terms narrow and ask your healthcare lawyer to carefully limit the scope and duration of the non-compete to what is truly needed.

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