Location, location, location: The geographic facts about noncompete clauses

Is such a clause in your contract enforceable? It depends on where you live. During the past year, the Kansas Supreme Court upheld a clause, while the Tennessee Supreme Court ruled in the opposite direction.

By Beth Wilson, AMNews correspondent. Jan. 30, 2006.

If John Rumisek, MD, 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 heart 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 contract's geographic restrictions, replacing them with a buyout option. Although the governing group of 25 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."

Dr. Rumisek, for the first time in his life, is unemployed. In hindsight, he regrets not taking his employment contract more seriously and hopes others can learn from his example.

"All of us, being physicians, never thought too much as to the specifics of the contract," he said. "It was more like, 'Yeah, yeah, yeah, let's go. Let's get to work.' "

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.