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Restrictive covenants are intended to protect an employer’s legitimate interest against unfair competition from former employees. In the medical profession, restrictive covenants are a vital component of any physician employment contract. Without such covenants, physician-employees are free to leave their employers on their own terms, which can often result in solicitation of the patient base and dilution and even destruction of a provider’s valuable and hard-earned patient and referral bases. Likewise, an employer’s monetary investment in a departing physician and in building up goodwill within a particular locale can be rendered moot where a former physician-employee is able to establish a competing practice across the street. Indeed, the problems associated with the failure to include a restrictive covenant in an employee’s contract can prove substantial for an employer in the medical profession, and that failure can quickly lead to a costly pattern of physicians and/or patients leaving to practice or treat elsewhere.

 

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