When Can a Doctor Compete? Legal Guidance for Exiting Practitioners
As a doctor, when you leave your current practice, you may have questions about when you are allowed to compete somewhere else. What restrictions or non-compete agreements must you follow, and are they actually enforceable?
Every situation is different. The healthcare transaction attorneys at Daniels, Porco & Lusardi, LLP are here to consult with you. If you have recently left or are thinking of leaving your current practice, it is critical to understand current rules surrounding non-compete agreements and other restrictions you might face.
Are Physician Non-Competes Enforceable in New York?
Non-compete agreements are enforceable, but with specific limitations. New York courts will usually respect a non-compete agreement if it meets these three requirements:
- Reasonable in Scope: The geographic area your agreement covers and the time the restriction lasts must both be reasonable.
- Necessary to Protect Legitimate Business Interests: The non-compete must have a good reason, such as to protect patient relationships, goodwill, or confidential information.
- Not Harmful to the Public: A court could invalidate the non-compete if it could harm the community. For example, if you are planning to provide medical services to an underserved population, the non-compete could adversely hurt those people, and be invalidated on that basis.
Exceptions and When Courts Take a Close Look at the Non-Compete
Courts in New York often look at doctor non-competes with more scrutiny than in other areas. They will often consider factors such as:
- Impact on patient care
- Specialized skills
- Subspecialties you have
- Whether the physician was terminated
- Whether the doctor left voluntarily
- Other unique circumstances of that individual case
2025 Legislative Update: Senate Bill S4641A
In June 2025, the New York State Senate passed Senate Bill S4641A. . This bill would ban most employment-related non-compete agreements. This would also include non-competes that affect physicians. Key parts of that bill include:
- Prohibition of non-competes for most workers, including healthcare professionals
- Exceptions for highly compensated individuals, like those who earn over $500,000 per year
- Allowances for non-competes tied to business sales, such as selling a medical practice
- Caps on duration, limiting even valid non-competes to one year
To become law, the bill must pass the House Committee and the full Assembly. The bill will likely pass, given that prior, much broader prohibitions have already become law.
A qualified healthcare non-compete attorney will stay aware of these changes and how they might affect you.
Alternatives to Non-Competes
Even if non-competes are banned, you could face other tools that limit your ability to compete:
- Non-Solicitation Clauses: These contract provisions prevent physicians from poaching patients or staff when they leave.
- Confidentiality Agreements: These agreements protect proprietary information and other data
- Garden Leave Provisions: A garden leave provision simply requires that you give a certain amount of notice before you leave. This is designed to prevent undue hardship on the employer.
What You Should Do If You Are Planning to Leave a Practice
1. Review Your Employment Agreement
Look at your agreement to see if you have any non-compete agreements or other restrictions you must follow.
2. Consult a Healthcare Attorney
An experienced New York healthcare lawyer can help you analyze your contract, negotiate an exit strategy, and protect your rights.
3. Avoid Solicitation Violations
Even without a non-compete, soliciting patients or staff from your prior practice could be problematic. If certain staff or patients want to come with you, consult with your attorney about how to handle this situation to limit your legal exposure.
Learn When You Can and Can’t Compete as a Doctor
New York and federal law continue to shift on these issues. Knowing how to handle your transition can seem daunting, but you don’t have to do it alone.
The attorneys at Daniels, Porco & Lusardi, LLP are ready to help you transition to the next stage of your career and protect your legal interests. Contact us today for a consultation.