Ask the Legal Expert ... about non-competition agreements

John Durso, Esq.  Nixon Peabody LLP
John Durso, Esq. Nixon Peabody LLP

We are tired of having our top nurses poached by other skilled care providers in the area. Can we hire new nurses under a non-compete clause? 

In response to “recruiting wars,” implementing non-competition agreements to hold onto your best nurses may be tempting — but not necessarily the best practice. 

First, it is important to remember that not all states uphold non-competition agreements. In California, for instance, non-competition agreements are disallowed in any field, regardless of the position. Second, even if not specifically disallowed, other states may strongly frown on such agreements. For those states that do recognize non-competition agreements, enforcing them can be difficult. Although standards from state to state vary widely, generally an employer must demonstrate a legitimate business reason for requiring a non-competition agreement and further show that the agreement does not unreasonably restrain the employee's ability to earn a living. Additional compensation for signing the agreement also may be required. 

Third, even if a nurse does leave your facility and go to work for a competitor, enforcing the non-competition agreement can be costly in both time and financial resources. And — just as with any legal proceeding — there is no guarantee of success.

Instead of requiring new hires to sign a non-competition agreement, a better way to keep top nursing talent and still fend off union activity is to offer market wages, top benefits and other incentives. Nurses who are satisfied in their jobs attribute such satisfaction to not only wages and benefits but also responsive management, adequate staffing and work-life balance.  A satisfied workforce is less likely to leave.