Employment agreements form the backbone of your practice’s relationships with your team. Far from being mere formalities, these documents provide essential clarity and protection for both your practice and your employees.
The Power of Clear Employment Agreements
Well-crafted employment agreements do more than define basic terms—they establish expectations, increase stability, and help avoid future disputes. Whether you’re using an at-will model or term-based contracts, these agreements should clearly outline the relationship between your practice and each team member.
Protecting Your Investment: Non-Compete Agreements
Non-compete agreements serve as vital tools for protecting your practice’s economic investment. They help preserve both personal and corporate goodwill while safeguarding your revenue streams and profitability. These agreements also protect valuable trade secrets, including client lists and pricing strategies, while helping maintain staff stability.
However, enforceability requires careful consideration. Your non-compete provisions must balance legitimate business protection with reasonable restrictions. This means thoughtfully defining the length of restrictions, geographic scope, and what constitutes competitive activity.
When implementing non-competes, consider whether they’re truly necessary for each position. The restrictions should directly relate to protecting your business interests without overreaching. Be prepared to have candid conversations with employees about these provisions and know when exceptions might be appropriate.
The Changing Landscape
Recent Federal Trade Commission developments have brought non-compete agreements under scrutiny. While the FTC has proposed comprehensive restrictions, exceptions exist for senior executives and business sale situations. Current litigation leaves the landscape uncertain, making it crucial to stay informed and adaptable.
Non-Solicitation Agreements: A Targeted Approach
Non-solicitation agreements offer a more focused way to protect your practice’s relationships. Unlike broad non-compete provisions, these agreements specifically address the preservation of client and employee relationships. They can effectively prevent both direct and indirect solicitation while allowing for reasonable professional mobility.
These agreements can work alongside non-compete provisions or serve as alternatives in jurisdictions where non-competes face restrictions. They’re particularly valuable for protecting specific relationship-based aspects of your practice while potentially facing fewer enforceability challenges.
Understanding how your team members obtain knowledge and work with clients helps structure effective non-solicitation provisions. Clear definitions of permitted and prohibited activities ensure these agreements protect your practice while remaining enforceable.
Contact Rupp Pfalzgraf to ensure your employment agreements provide the protection your practice needs while remaining enforceable and fair to your team.
