If Dr. John Rumisek had it to do again, the Kansas surgeon might reconsider the terms of his employment contract with Wichita Surgical Specialists and ensure that any intended changes were actually executed. Rumisek and three other surgeons recently found themselves embroiled in a legal battle over facets of their noncompete contracts, which restricted them from practicing within county lines or within a 75-mile radius of their former employer. The physicians thought they had eliminated their contracts’ geographic restrictions by replacing them with a buyout option. Although the governing group of surgeons had approved the change, the paperwork for three of the four physicians was never done. When the four surgeons left the practice to set up shop together, they sued, looking to invalidate their noncompete clauses. Late last year, the Kansas Supreme Court ruled against the physicians, declaring, in essence, “a contract is a contract.”

Every day more physicians encounter noncompete clauses in employment agreements, whether in signing a contract or drafting one. In many cases, noncompete contracts restrict a physician from practicing medicine within a geographic area for a set number of years after the contract is terminated. Not surprisingly, an increasing number of contract arguments are settled in state supreme courts, with each state interpreting the legal issues in its own way.

Although noncompete cases are gaining momentum in the legal system, there is no one trend nationally as to whether noncompete clauses are enforceable. States such as California and Colorado simply do not allow noncompete provisions for physicians, whereas most other states allow restrictive covenants if they are reasonable in scope. This was illustrated in 2005, when the Kansas and Tennessee supreme courts ruled in decidedly different directions on the issue.

In June 2005, Tennessee declared an internist’s noncompete agreement invalid, finding that a patient’s right to receive continued care from his physician outweighed a medical center’s business interest. In the Tennessee opinion, the court said: “The right of a person to choose the physician that he or she believes is best able to provide treatment is so fundamental that we cannot allow it to be denied because of an employer’s restrictive covenant.” However, in September 2005, the Kansas Supreme Court denied the appeal from Dr. Rumisek and his colleagues, upholding an earlier decision that found their noncompete contracts reasonable, valid and binding.

Anxieties leading to and after a court decision can be great, and the consequences for physicians are significant. Attorneys now strongly advise physicians to read, understand and obtain legal advice on all restrictions in a noncompete pact, including geographic, time and type of employment. Also recommended is trying to negotiate a buyout option. Physicians may attempt to reduce the agreement’s buyout amount, time period or geographic scope, in addition to clarifying or negotiating what type of medicine can or cannot be practiced after a contract ends. As each state differs in its approach to noncompete contracts for physicians (see below for broad look at state laws), physicians should contact local attorneys experienced in this issue for particulars.