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In Defense of Your Practice: 8 Ways to Defend your Practice Against Unfair Competition


October 30, 2014

As appearing in PLASTIC SURGERY PRACTICE:

In Defense of Your Practice: 8 Ways to Defend your Practice Against Unfair Competition

You’ve worked hard to develop a successful practice. You’ve hired a number of physicians, invested in their training and development, and entrusted them with your patients and confidential information. But you may have also unwittingly given them the means to compete against you. What if they leave and try to steal your patients and staff members?

Think it can’t happen to you? It can. While your legal options may vary from state to state, here are eight simple ways to protect your interests today:

1.  Use restrictive covenants
Many plastic surgery practices require that physicians sign employment agreements with one or more restrictive covenants—provisions that limit their ability to unfairly compete after they leave. If these are properly drafted, they can prevent your employees from opening up a competing practice in your area, soliciting your patients and your office staff, and stealing your confidential information. If you do not currently have these agreements in place, speak with a lawyer to prepare them now.

2.  Be reasonable
When drafting employment agreements for your physicians, do not over-reach. If an agreement would effectively prohibit the doctor from earning a living, the courts likely will not enforce it. Instead, tailor the agreements to the legitimate interests you are trying to protect. As a general rule, think twice before prohibiting a plastic surgeon from practicing any type of medicine, making the geographic scope of the agreement broader than the area where you draw your patients from, or preventing the doctor from contacting patients with whom she had no contact.

3.Keep up with the law
The law changes on a regular basis, so you cannot afford to simply put an employment agreement in place and forget about it. Agreements should be reviewed every year or two and updated based on any relevant changes in the law.

4.  Make sure your confidential information stays confidential
Writing an enforceable agreement is not enough. Unless you take reasonable efforts to keep your confidential information confidential, the agreement might not be enforced and you might not be able to bring other claims. Consider what types of confidential information your practice has, and then put policies and procedures in place to protect it. Make sure to restrict access to patient information only to those who have a need to see it, require “strong” passwords to access sensitive electronically stored information, and create an external firewall to prevent remote access by unauthorized individuals.

If a former employee unfairly competes against you and it impacts your business, consider seeking an injunction to stop the behavior.

5. Take action promptly when an employee leaves
Develop a procedure for protecting yourself when an employee leaves. Require the departing employee to return all patient information and other confidential materials. Provide the employee with a copy of the employment agreement, and remind them of any continuing obligations. If the physician joins a competing practice, consider having a lawyer write letters to both your former employee and the new practice, explaining the restrictions and putting them on notice should any violations occur. Then, closely monitor the situation to see if your business is affected.

6.  Get an injunction
If a former employee unfairly competes against you and it impacts your business, consider seeking an injunction to stop the behavior. If you had the individual sign a reasonable agreement, the courts in most states are likely to enforce it. Oftentimes, once the injunction is granted, the physician will honor the agreement and stop competing.

7.  Keep an eye on your competitors
If a competing practice recruits one of your physicians and encourages him to steal patients, you might have valid claims against the practice, particularly if it had notice of the employment agreement.

8.  Protect your online reputation
Many plastic surgeons rely heavily on the Internet for business. Former employees and competitors may pose as patients and post anonymous, negative reviews of your practice. Proactively monitor and build your online reputation to defend against this vindictive practice.