Nov 21 2016

Non-Compete Agreements in Dental Healthcare

By Jennifer A. Rymarski, Partner, and Michael R. Lavoie, Law Clerk

Despite the Massachusetts Legislature’s latest efforts to relieve some of the tension between employers and employees, non-competition agreements (“NCAs”) remain generally valid in Massachusetts. That is not to say, however, that there are no restrictions on NCAs or their enforceability. Such agreements are enforceable “if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest.” Chapter 112 of the Massachusetts General Laws prohibits the enforcement of NCAs against certain healthcare providers. However, dentists are not part of this group.

Most cases scrutinizing NCAs focus on the reasonableness test. The consideration for enforceability under this test is generally aimed to protect the contracting parties (protection of the employer’s legitimate business interest on balance with the employee’s freedom from overly heavy burdens in terms of their ability to earn a living). The applicability of NCAs in the context of healthcare is contingent primarily on consonance with the public interest. In the case of Falmouth Ob-Gyn Assocs. v. Abisla, the Supreme Judicial Court articulated that the law, M.G.L. Chapter 112, “favors the strong public interest in allowing patients to consult the physician of their choice.”

Chapter 112 directs the registration of certain professions and occupations. Among other professions and occupations, Chapter 112 bears upon the powers and duties of the Board of Registration of Dentistry, the registration requirements of dentists, what constitutes the practice of dentistry, the scope of practice of dental hygienists, and several other rules and regulations respecting the field of dentistry. Within Chapter 112, Section 12X voids the enforcement of NCAs against physicians wherein a physician’s right to practice is being restricted. Section 12X states:”

Any contract or agreement which creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a physician registered to practice medicine pursuant to section two, which includes any restriction of the right of such physician to practice medicine in any geographic area for any period of time after the termination of such partnership, employment or professional relationship shall be void and unenforceable with respect to said restriction; provided, however, that nothing herein shall render void or unenforceable the remaining provisions of any such contract or agreement.

Subject to a plethora of analysis and litigation, this statute specifically prohibits the enforceability of restrictive covenants against a “physician.” Section 12X references section 2 of Chapter 112, which notes that “qualified physicians” are those who are registered and certified by the Board of Registration in Medicine. The emphasis on the word "physician" and Board certification is important because dentists are registered and certified by the Board of Registration in Dentistry. As a result, the scope of the exemption is limited and excludes dentists.

The field of dentistry is broad. The American Dental Association recognizes nine subspecialities of dentistry. Notwithstanding the specificity of G.L. Chapter 112, Section 12X, or the exclusion of a dentists specifically in Chapter 112, a dentist practicing either general dentistry or in a subspecialty is still a provider of oral healthcare. Viewed in this light, the public policy argument should apply, i.e., that a patient be able to retain the dental professional of their choice. However, this argument was proposed in the case Whitman, D.M.D. v. Goldberg, D.M.D., 26 Mass.L.Rptr. 289 (Mass.Super. 2009), and seemingly rejected. In Whitman, a dentist, facing a charge of contempt for failing to abide by the court’s earlier ruling enforcing a NCA, argued amongst other things that he was concerned about abandoning the patients who chose him for their care. As a corollary, the dentist argued also that his ethical obligations required him to treat the patients who requested or needed services. The court responded that once the dentist knew he was in violation of his NCA, he should have taken steps to seek out alternative care for the patients who chose him for treatment. With respect to his ethical obligations, the court decided that the dentist would not be held to different standard for continuing his practice against a valid NCA just because his profession keeps ethical guidelines. Moreover, the court held that the proper time to bring such an argument would have been at the preliminary stage, when both parties were arguing the merits of the NCA, and not during a separate proceeding for failing to follow the prior court order.

The Whitman decision is significant because it shows that courts are willing to recognize and enforce NCAs against dentists. It is also instructive in that the court held a dentist’s obligation in the face of a NCA requires the dentist to take reasonable steps to find another provider so as to avoid a patient abandonment issue. The Whitman decision is now eight years old. NCAs are now being closed examined, and yet the statute has not been modified to include dentists and has not yet been directly tested by an appellate court or the Supreme Judicial Court.

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