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A well prepared associate agreement (whether in the form of an employment agreement or an independent contractor agreement) is an important document for any dental or veterinary practice. Our professionals prepare associate agreements for practice owners, and also review these agreements for associates working for practices. Our lawyers regularly advise clients on restrictive covenants and issues related to these provisions, which are among the most important provisions in these agreements.
From an employer’s perspective, an enforceable restrictive covenant can be a vital tool in protecting the practice’s goodwill. Additionally, an enforceable restrictive covenant can be imperative when it comes time to sell the practice. The enforceability of a restrictive covenant is often an issue of reasonableness and, more specifically, whether the covenant is reasonably necessary to protect the practice. However, in some states, the timing of when the agreement was signed can impact its enforceability. In addition, whether the agreement and/or the restrictive covenants contained in the agreement can be assigned will depend on state law and the specific language contained in the agreement. We will focus on negotiating a restrictive covenant that will protect your practice and be enforceable in your jurisdiction.
When representing an associate, the details of restrictive covenants are important since such covenants impact the associate’s ability to practice should the practice owner and associate part ways under certain circumstances. In most situations, the associate’s bargaining power is limited, especially when it comes to negotiating restrictive covenants in any meaningful way. Nonetheless, it is still important for an associate to understand what he or she is agreeing to and to confirm that the associate agreement reflects the agreement between the parties and, moreover, that it is consistent with the associate’s goals and expectations.
© Robert H. Montgomery, III, Esquire, P.C. 2019
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