Many physicians in a group medical practice at some point in time wonder whether or not they can leave their practice and set up their own competing practice. If a physician decides to leave their practice and create a competing practice, there are certain complications – both legal and ethical – that will undoubtedly come about. Having a team of Philadelphia health care lawyers at your side oftentimes proves to be most helpful in understanding and solving the numerous complications that come about.
Can You Compete Against Your Old Practice?
When a physician leaves their practice and decides to start a competing one, the former practice tends to become unhappy, sometimes to the point where they threaten litigation. Upon termination of employment, a non-competition agreement or clause in a contract is generally not enforceable in court. In some states, such as California, a physician can set up a competing practice despite the fact that they signed an agreement with their old practice that prohibits any kind of competition. There are exceptions to this rule, such as when a non-competition clause is entered into as part of the sale of a practice, partnership agreement or shareholders agreement that prohibits a physician who is leaving from competing in a certain geographical area.
Limits to Competition
Even though a physician will likely be able to compete against their former practice, they can only do so fairly. This means that confidential information and trade secrets of the former practice should not be used to compete. Most often, this type of information comes in the form of patient lists or referral sources. The law will likely prohibit a doctor from using data from their former practice, but only if the data is a trade secret and the doctor misuses the data. Due to the current state of HIPPA restrictions, patient lists are assumed to be trade secrets.
However, what determines the misuse of patient lists or referral sources is slightly more complicated. For example, some states require a departing physician to let his or her patients know that they will be departing the practice. For the most part, physicians cannot just abandon their patients without giving them some sort of notice as to when they are leaving. In the case of litigation, a court will look at whether the departing doctor solicited the group’s patients or referral sources, as opposed to simply announcing their departure publicly and to their patients. Once a physician goes further than mere announcement, the dangers of a court finding that a physician misused the data are heightened.
Philadelphia Health Care Attorneys at Sidney L. Gold & Associates Help Physicians Create Their Own Competitive Practice
If you or a physician you know is thinking about leaving their current practice and forming a competing practice, Philadelphia health care lawyers at Sidney L. Gold & Associates help physicians understand the legal and ethical complexities surrounding such a decision. Our team will guide you through the departure of your current practice and the creation of your new one, so that you do not have worry about legal repercussions.
Our offices are conveniently located in Philadelphia so that we can serve physicians and medical professionals throughout Pennsylvania, New Jersey, and New York. Call us at 215-569-1999 or contact us online to have your case reviewed with one of our qualified Philadelphia lawyers for doctors.