Is the non compete clause enforceable to an independent contractor physician in Arizona

Hi there,

I am an independent contractor (physician) for a group that contracts with a hospital in the Scottsdale AZ area and I provide hospitalist services.

I have been with them for 2 years and I signed an agreement with them with a restrictive covenant that states that (1) I cannot work for an entire year after I leave them, with any group at ANY hospital that they currently contract with and HAVE PREVIOUSLY contract with. (2) I cannot work for an entire year after I terminate my contract with them at any hospital or facility which provides hospitalist services (just like what I am doing now) - basically I cannot work for 1 year. - I CAN'T EVEN BELIEVE I SIGNED THIS

Anyway - I want to move on to another group that is in the same facility mainly because of better compensation and work schedule. As a hospitalist I do not have patients that I own.. I mainly admit and consult patients based on what the ER and what the consultants give me.. I am not stealing any business away I just want a better job in the same roof.

Now.. As an independent contractor physician, would these restrictive covenants be enforceable in court? Are parts of these covenants enforceable in court.. and if parts of them are.. what can be done to get this thrown out?

I would understand an employment contract would have such covenants, but I have heard that AZ is a right to work state and I.C. professionals specifically are not bound by such covenants.

1 answer  |  asked Sep 28, 2011 3:30 PM [EST]  |  applies to Arizona

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Answers (1)

Francis Fanning
In Valley Medical Specialists v. Farber, 982 P.2d 1277, 194 Ariz. 363 (Ariz., 1999), the Arizona Supreme Court held that a similar agreement was void as it was contrary to public policy. The court did not hold that all such agreements involving doctors would be void, so it is important to consider the factors that the court discussed, and how the agreement and the facts of that case compare with yours.

As you have heard, Arizona is a "right to work" state, but that has nothing whatsoever to do with your case. A "right to work" state is a state that prohibits unions and employers from agreeing that union membership be required as a condition of employment.

I suggest that you discuss your specific agreement with an employment attorney to determine the most appropriate way to proceed.

posted by Francis Fanning  |  Sep 28, 2011 4:25 PM [EST]
Attachment: az_1999_dr_restr_void_pub_policy.pdf

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