Ask the legal expert: non-compete clauses in long-term care employee contracts

Share this article:
Attorney John Durso, Ungaretti & Harris LLP
Attorney John Durso, Ungaretti & Harris LLP
In which employees' contracts can I put a “non-compete” clause? Are there any other ways I can legally restrict them from jumping ship?

The purpose of a non-compete clause is to prohibit an employee from unfairly competing with a former employer. A majority of states allow for such a restriction, if the employer has a legitimate business interest and the restriction extends no further than what is reasonably necessary to protect that interest. 

Generally, facilities have a legitimate business interest in restricting executives, managers and supervisors who have access to confidential information or trade secrets. Facilities have a more difficult time justifying restrictions for non-management employees who are unable to influence the decision-making process.

If there is a legitimate business interest, the non-compete clause must also be reasonable. If the matter is litigated, the court will look to the geographic area, time restriction, and scope of the restrictive covenant. The court would also balance the needs of the employer against the harm to the former employee. If the geographic area and time restrictions were reasonable, then the court would consider whether there is any potential injury to the public if the restrictive covenant is enforced.

The facility also must provide consideration for the non-compete clause. Generally, for at-will employees, the facility's offer of employment is sufficient. For pre-existing employees, the facility generally must provide something more as consideration (e.g., specialized training, bonuses, or additional benefits).

Otherwise, a facility cannot restrict a former employee from seeking employment with its competitors.

Share this article:

More in News

A small team of workers responds best in emergencies, expert says

A small team of workers responds best in ...

Long-term care providers should consider a "flat" crisis management approach that relies on a core group of staff members, experts advised Wednesday at the LeadingAge annual conference.

Nursing homes have better pain and catheter management if leaders have more ...

Nursing homes led by administrators and directors of nursing with higher levels of education and certification have better outcomes on some key quality measures, according to recently published findings.

Court green-lights charges that a healthcare network underused observation stays

A whistleblower can continue to pursue charges that a Nevada healthcare network routinely admitted people as hospital inpatients when they should have been placed in observation status, a federal appeals court recently ruled.