Should Physical Therapists Sign Non-Competition Agreements?

December 2, 2023
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We help recruit dozens of physical therapists each year.  In far too many cases, therapists are subject to agreements that restrict where they can work after termination of employment with their current practice. For example, a therapist may be prohibited from working within a 15-mile radius of a clinic where he or she worked for a period of one year after employment termination.

In typical employment situations, there is almost never a valid reason or need for a physical therapist to sign a non-competition or non-solicitation agreement that would restrict future employment opportunities. A non-competition agreement is an agreement not to work for a competing practice within a specific geographic area.  A non-solicitation agreement is an agreement not to contact your employer’s referral sources or patients after termination of your employment.  Agreeing to these restrictions while you are employed is acceptable, but there is no reason to agree to restrictions that apply after termination of your employment.

During the past few years, physical therapists who are looking for a new position can often choose between three (or more) excellent offers.  Given these options, there is simply no reason to agree to any post-employment restrictions.  Granted that very few therapists go into a new job expecting to terminate their employment, but that is no reason to reduce your options if and when you terminate your employment.

The only exception is in the case of a therapist who owns and sells his or her private practice.  In that situation, where a therapist is presumably being paid for goodwill and referral relationships, it is certainly reasonable for a buyer to insist on non-competition and non-solicitation agreements.