meet the test of fairness and reasona-bleness. They cannot bring about an unnecessary hardship for the depart-ing associate or the seller of the prac-tice. The courts will take every meas-ure to equalize the interest of both the employer and the departing employee or seller and buyer. This involves bal-ancing the freedom of the associate to practice in a new setting, to earn a living in a competitive market, the proprietary interests of the employer or seller and the public interest as reasonable. To be enforceable, the covenant must be specific, relative to time and place or in terms of specific patients. In drafting the covenants, employers or buyers should only take into con-sideration what they would lose should the contract be violated. Damages must be reasonable, anticipated and blanket only a protected interest in the geographic area where the agreement is signed. Time limitations must be clearly defined. Restricting the associate’s or seller’s ability to compete for two years may be overly restrictive under certain circumstances and the court could reduce this and other restrictions. A covenant stating that the employee may not work for a competitor, open a competing chiropractic practice or service existing patients within a pre-scribed radius is equally questionable. The courts will generally throw out such a limitation where the radius is too wide or the time element too long, unless the employer or buyer can prove that his or her practice would be materially damaged. It is important that the covenant does not restrict the lifestyle or create a hardship for the associate or seller. A duration of one year or less will most times be enforceable if within or linked with a specific narrower geographical area. The penalty for not observing a non-competition covenant is usually a percentage of the receipts from the new location, payable by the violating associate or seller. On a sale, the cov-enant is usually considered as part of the sell-buy price with that price ad-justed as a compensating factor. The consideration is seldom spelled out in these covenants. There are many problems with non-competition covenants, not only with professional practices but busi-nesses of all types. The limiting factor that applies to both is that patients and customers must be left free to choose any chiropractor or business that they wish to patronize, and domiciled chi-ropractic patients may move with the associate or a seller should they choose to. This article is not intended to pro-vide legal advice but only point out some of the problems with these cov-enants. And, never assume that a boiler plated agreement you can pur-chase from some publishing company or in a stationary store will suffice. There are too many “what ifs.” Con-sult a knowledgeable lawyer. The Alpha and Omega of Spinal Healthcare HILTON ATHENS HOTEL www.wfc.org/congress2015 40 Canadian Chiropractor October 2014 www.canadianchiropractor.ca
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