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Is Covenant not to compete for dentist enforceable in Georgia?

Atlanta, GA |

I have found a place to open my own practice 3 miles from where I currently practice. In my contract with my current employer, there is a clause not to open my own business within 5 miles radius.

1. In state of Georgia, do courts disfavor covenants that restrain competition and will prevent employers to enforce them?
2. I like the location that I am seeing and will save lot of $$$ as it is built out for Dental Office. Should I avoid this location to avoid legal issues?

Thank you for your advice.

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Attorney answers 4

Posted

While I cannot advise on Georgia law, I can tell you that - generally - there are states that are more or less favorable to non-compete covenants. The considerations evaluated among states that are more favorable or less favorable are almost universally: 1) the geographic limitations; 2) duration of the restriction; and 3) the restricted activity. Five miles is almost certainly reasonable, but it's unclear as to the scope of the work (all dentistry?) or for how long the restriction may be imposed. These considerations, however, are all subjective for your jurisdiction, so you will want to consult with a local attorney.

Posted

While it would be helpful to see the whole non-compete clause, from what you have said it seems to be a narrowly tailored clause. Therefore, it would likely be upheld by the Georgia courts.

I am not providing you with legal advice, but am simply providing general information. We do not have an attorney / client relationship simply by virtue of my responding to this question. An attorney / client relationship will only arise when you and I enter into a written engagement agreement.

Posted

I agree witht he other attorneys. Non-compete clauses generally have to be fairly limited and the 3 vs 5 mile difference in how close you can compete seems fairly limited.

However, if you are considering practicing in a highly urbanized it is possible that a judge might consider the 3 mile limit too restrictive. See a local attorney with experience in interpreting restrictive covenants and have him or her review the agreement.

I am licensed in New Mexico and Pennsylvania, and therefore any discussion of issues related to other states must considered within that context. In addition, my comments are not intended to create a legal representation but merely to respond to the limited facts presented by the question. Any opinion herein is not meant as a precise statement of legal rights or as a recommendation of any particular course of action. A more complete legal review can be obtained through local counsel.

Posted

There are a number of factors at play. I have advised a number of doctors and dentists regarding these exact issues, mostly under Florida law, but also in a handful of other jurisdictions.

In my experience, given that the restriction is only a 5-mile radius, I think a court is likely to find the restriction a reasonable one. It's probably worth meeting with an attorney who specializes in non-compete cases to have him/her review the agreement, review all the facts and determine whether there are any strong defenses (e.g. preemptive breach; contract technically defective; etc).

If there are no obvious defenses or strategies for having the agreement invalidated, you have to act accordingly. Doctors and dentists generally tend to be well-capitalized, are very concerned about protecting patient relationships and are (from my experience) more inclined to actually pursue non-compete cases than many other ex-employers.

Note, however, that even if you do opt for a location outside of the radius, there may still be certain lingering non-compete restrictions, depending on how the contract is written.

Finally, there is also the option of negotiating with the employer to buyout the non-compete agreement. This is only worth it if (1) the prime location is really valuable and (2) you can eliminate virtually all of your obligations under the non-compete and related provisions (non-solicitation).

To read more about non-compete agreements, and particularly non-compete agreements in the medical and dental professions, please visit www.thenoncompeteblog.com.

Good luck!

Jonathan Pollard

My response to this question is a response to a hypothetical situation based on limited facts. I am not your attorney; you are not my client and we do not have an attorney-client relationship. If you need a lawyer, you should contact one in your area. If you would like to talk with me about your case, you can call my office.

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