Non-Compete Agreements: What You Need to Know Before Selling

DiligenceSure
Sat, 03 May 2025 13:07:39 +0000
Business

12 Min Read

If selling your practice meant giving up your ability to practice medicine — would you still sign the deal?

It sounds absurd, doesn’t it? Yet, this is exactly what’s happening to countless doctors who are looking to sell their practice — and most don’t realize it until it’s too late.

Buried deep in your sale agreement could be a non-compete clause — a seemingly harmless section that, if left unchecked, could cripple your career. Imagine dedicating your life to medicine, only to discover that selling your practice means you can’t treat patients in your city or even volunteer at a local clinic.

Do you think it’s rare? It’s not.

Take Dr. Roland, a successful internist who spent 20 years building his thriving practice. When he sold it, he assumed he could pick up part-time work at a nearby urgent care to stay active in medicine. But the non-compete clause he barely glanced at barred him from practicing within 25 miles — covering every healthcare facility in his area. His only options? Relocate or leave medicine entirely.

Or consider Dr. Daniel, an orthopedic surgeon ready to retire from surgery but eager to mentor younger doctors and offer virtual consultations. He soon learned his non-compete wasn’t just about surgeries — it blocked him from any musculoskeletal care, even online. For two years, Dr. Daniel was forced into total professional silence.

Can this happen to you? If you’re preparing to sell your practice, the answer is yes — unless you take action now.

Here’s the truth: Corporate buyers are becoming increasingly aggressive with their non-compete demands, knowing many doctors won’t question the terms. They’re counting on you to trust the “standard contract” and assume everything’s fair.

Trusting that assumption could cost you your career, your finances, and your freedom to practice medicine the way you choose.

So what’s hiding in your contract?

This blog post will break down the dangers doctors like you face — and reveal exactly how to protect yourself before you sign anything. One overlooked clause can destroy everything you’ve worked for.

Don’t wait until it’s too late.

What Are Non-Compete Agreements — And Why Should Doctors Care?

Non-compete agreements may seem like routine legal language — but in reality, they can quietly sabotage your career if you’re not careful.

At their core, non-compete agreements restrict where and how you can practice medicine after selling your practice. On paper, that may sound reasonable — after all, buyers don’t want you setting up shop right next door and drawing patients away.

According to a survey done by the National Institute of Health, a majority of surgeons believed that such clauses would prevent the maintenance of their current practice in their desired city, forcing surgeons to relocate their families.

Non-competes aren’t always reasonable. Many doctors assume these clauses only apply to opening a competing practice down the street. In reality, they can stretch much further — and restrict far more than you expect.

Imagine discovering that your non-compete doesn’t just bar you from working in your neighborhood — it locks you out of practicing anywhere within a 30-mile radius. That could mean giving up your ability to work at nearby hospitals, urgent care centers, or even telemedicine platforms that serve your local area.

And it gets worse. Some non-compete clauses go beyond location. They can restrict what type of medicine you practice — sometimes in ways that make no sense.

Take Dr. Mitchell, a dedicated family physician who sold her practice, planning to transition into teaching medical students at a university. She never imagined her non-compete would follow her there — but it did. Because her teaching role involved patient case discussions, the vague wording in her non-compete blocked her from accepting the position. She was left stunned — and without a backup plan.

Can your non-compete do the same?

Before you brush it off as ‘standard language,’ ask yourself: Are you sure you know exactly what you’re agreeing to? If you don’t — that one clause can control your career long after you’ve sold your practice.

The Hidden Pitfalls in Non-Compete Agreements That Doctors Overlook

Non-compete agreements may seem simple — but their hidden traps can derail your career in ways you’d never expect. Don’t believe it? Just ask the doctors who learned this lesson the hard way.

According to the American Medical Association, unfair noncompete clauses are extensive in health care, affecting between 37% and 45% of physicians.

1. Geographic Traps: When “50 Miles” Feels Like 500

Dr. Collins, a pediatrician in a busy metropolitan area, assumed her non-compete’s “50-mile radius” was reasonable. After all, she figured that covered just her immediate neighborhood — no big deal, right?

Wrong.

That 50-mile restriction didn’t just include her city — it stretched across multiple towns, including several major hospitals where she once held privileges. Suddenly, Dr. Collins couldn’t work in any of the clinics or facilities where she’d built her reputation.

Worse still, her kids were settled in school, her spouse had a stable career in the area, and moving wasn’t an option. She found herself driving over an hour each way to a small-town clinic — just to stay employed.

According to a survey done by the National Institute of Health, respondents believed non-compete agreements negatively impact patients, including forcing patients to drive long distances to maintain continuity of care and forcing surgeons to abandon their patients if they seek new employment.

Would you uproot your family to comply with a non-compete? Or would you settle for exhausting commutes and fewer opportunities?

2. Problems in Timing: When “Just One Year” Becomes Three

Dr. Sarah, a gastroenterologist, expected her non-compete to last for 12 months — a reasonable break before jumping back into work.

But buried in the contract was a quiet extension clause that triggered if her buyer expanded operations. She didn’t notice it — and neither did her lawyer.

Two months after her sale, the buyer purchased several clinics in the area — triggering her non-compete to automatically extend to three years.

For Dr. Sarah, that wasn’t just a setback — it was a career crisis. A year away from practice felt manageable, but three years was devastating. Her skills began to fade, her professional network crumbled, and by the time her restriction ended, she had to rebuild her career almost from scratch.

Can you afford to sit on the sidelines for two or three years?

3. Specialty Ambiguity: The Trap That Killed a Career Pivot

Dr. Robin, a general surgeon, was ready for a change. After years of high-stress procedures and demanding on-call hours, he wanted to transition to wound care — a slower-paced specialty that would still allow him to use his skills.

But thanks to vague wording in his non-compete, his buyer claimed that wound care counted as “surgical treatment” — even though he wouldn’t be stepping foot in an operating room.

Dr. Robin fought back, but legal battles took time — and in the end, he lost. He spent two years working outside of medicine altogether, taking a major financial hit and losing valuable career momentum.

What if your non-compete blocks you from switching to a less stressful or more flexible role?

4. ‘Side Hustle’ Restrictions: The Backup Plan That Failed

Dr. Morgan, an OB-GYN, had no intention of starting a competing practice. After selling her clinic, she planned to pivot to medical writing and consulting — flexible work that would allow her to spend more time with her kids.

But her non-compete had one unexpected detail: It restricted her from working in any healthcare-related capacity within her local market.

Consulting? Blocked.

Writing content for a women’s health website? Blocked.

Even volunteering at a free clinic? Blocked.

The result? Dr. Morgan was left scrambling to find non-medical work — all because she didn’t question her non-compete’s vague language.

Are you sure your backup plan isn’t quietly restricted?

5. Surprise Expansion: When the Non-Compete Zone Expands Overnight

Dr. Harris, a dermatologist, believed she’d negotiated a fair non-compete — restricting her only from practicing within 15 miles of her former office.

But six months after her sale, her buyer acquired three more dermatology clinics — suddenly extending their footprint far beyond that 15-mile zone.

Without warning, Dr. Harris was now blocked from working in nearly every major healthcare hub in her city. She had no idea her contract allowed the buyer to expand their reach — effectively widening her restriction without her consent.

Would you know how to stop this before it’s too late?

Don’t Assume — Protect Yourself Now

These stories aren’t just cautionary tales — they’re real-life examples of what can happen when doctors assume their non-compete is “just a formality.”

Every one of these doctors believed they were protected. Every one of them trusted that their contract was fair. And every one of them paid the price.

Don’t let that happen to you.

The survey’s findings of the Economic Policy Institute suggest that signing a noncompete may not always be a memorable occasion—for example, it found that when asked to sign a noncompete, 88% of workers simply sign it rather than negotiate over the terms.

Your non-compete is more dangerous than you think — unless you know exactly how to protect yourself. The question is, are you willing to risk it?

How to Negotiate a Non-Compete That Protects Your Future

If you’re thinking, “I’ll deal with the non-compete later,” stop right there. By the time you’re nearing the closing table, it’s often too late to negotiate better terms. The buyer will have the upper hand — and you’ll be left scrambling to fix a contract that’s already stacked against you.

Here’s how you take control before it’s too late:

1. Challenge the Terms Early

Don’t let the buyer slide a restrictive non-compete into the final draft of your agreement. Bring it up immediately. Ask for specifics on their expectations and challenge anything that feels excessive. Buyers won’t expect pushback early on — and that’s exactly why you need to do it then.

2. Redefine Geography

Vague mileage restrictions are a trap. A “30-mile” ban might seem reasonable — until you realize it blocks you from multiple cities or key healthcare hubs. Instead, demand clear boundaries: specific zip codes or street names. This limits your restriction to areas that make sense.

3. Limit the Time Frame

Anything beyond 12 months? Non-negotiable. There’s rarely a valid reason for a buyer to demand two or three years. The longer they restrict you, the harder it will be to stay relevant in your field. Push back firmly — and don’t back down.

4. Protect Your Future Opportunities

Don’t let your buyer rob you of future options. Insist on exclusions for consulting, telemedicine, teaching, and volunteer roles. Why should you be punished for sharing your expertise outside of direct patient care?

5. Tie Restrictions to Patient Loyalty

Instead of a broad geographic ban, push for a restriction tied to your existing patient list. If those patients aren’t seeking your care, why should you be blocked from practicing elsewhere?

6. Secure a Buyout Clause

This is your ultimate safety net. A buyout clause lets you pay a set fee to cancel your non-compete if you need to return to the local market. Without this option, you could find yourself stuck — powerless to resume your career without uprooting your life.

Your non-compete isn’t just fine print — it’s your future on the line. Challenge it, control it, and protect what you’ve worked so hard to build.

One Signature May Cost You Everything

Imagine investing decades of your life into medicine — only to have a non-compete clause quietly strip away your ability to practice, mentor, or even volunteer.

These traps don’t just happen — they’re allowed to happen when doctors sign contracts they don’t fully understand.

Corporate buyers count on you to skip the fine print. They hope you’ll trust that everything is “standard” — and that’s exactly how doctors lose control of their futures.

That’s where DiligenceSure comes in.

DiligenceSure specializes in uncovering the hidden risks buried in healthcare practice sales — the clauses that seem harmless but can devastate your career. Their experts know exactly where buyers like to slip in aggressive non-compete language — and they know how to fight back.

The doctors who lose their careers to these traps all have one thing in common — they waited too long. By the time you’re staring at a contract on closing day, it’s too late to undo the damage.

Your future is too important to gamble on assumptions. Before you sign anything — before you even consider an offer — let DiligenceSure review your contract. One overlooked clause could destroy everything you’ve built. Don’t wait until that clause controls your career.