Buried in many employment contracts are radius restrictions and non-compete clauses that quietly limit career options long after you sign. We often see this issue when helping physicians, dentists, and veterinarians secure space for their first practice. What may seem like standard fine print can have lasting effects on your career, finances, and patient relationships.
Radius Restrictions
If your contract includes a radius restriction, it means that once you leave, you cannot practice within a certain distance of your former employer for a set period of time. The tricky part is that when you’re signing, these restrictions don’t seem like a big deal. Say it’s a three-mile radius, that doesn’t sound like much. But here’s the quick math breakdown:
The area of a circle is:
πr^2
If your radius is three miles the equation becomes:
π x 3^2
Three squared equals 9 and π equals 3.14 so the equation becomes:
3.14 x 9
Multiplying 3.14 by 9 gives you:
28.26 miles
That’s nearly a 30-mile hole on the map where you can’t even consider properties for your new practice. In commercial real estate, the person with the most options usually wins. Even a three-mile radius restriction drastically reduces your choices, and puts your practice at risk.
The reality is, most radius restrictions aren’t just three miles. We regularly see contracts ranging from five to fifteen miles. A five-mile restriction, using the same equation, wipes out 78.5 square miles on the map. A fifteen-mile restriction blocks out over 700 square miles. At first glance, three to fifteen miles may not sound like much, but once you do the math, the impact is enormous.
Non-Compete Clauses
Some contracts include what’s called a non-compete clause. A non-compete prohibits you from practicing in the same specialty or offering certain services for a set period of time after leaving your employer. Employers add them to protect their patient base and ensure that when an employee leaves, they don’t take those patients with them. The problem is that this can severely limit your professional freedom.
If a radius restriction limits where you can practice, a non-compete limits what you can practice. Many contracts include both. For example, a cardiologist’s contract might read: ‘For two (2) years after termination, Physician shall not practice cardiology within ten (10) miles of Employer’s office or be employed by any competing practice within that area.’ Individually or together, radius restrictions and non-competes can drastically reduce your options and reshape the future of your practice.
The Time Element
If you’ve already signed a contract with these limiting terms, there is still a path forward. The good news is that these restrictions are time-bound, usually lasting one to two years. In most cases, this creates a cooling-off period before you can open your own practice.
There are two main approaches. You can immediately start searching for a location outside the restricted radius, accepting the limitations on where you can go. Or you can pause and wait out the restriction period.
Neither option is inherently better or worse, it depends on what best fits your needs. If you’d like help reviewing your contract or planning your next steps, please contact us. At GILE, we love helping medical professionals find the best possible location for their practice and set them up for long-term success.
