Should Counselors Sign Non-compete Agreements?

Being in my position, I regularly get practice and employment questions from mental health professionals. Questions related to the issue of non-compete agreements are some of the most common. Here’s one:

Hi Anthony,

I’m newly licensed and was offered a position at a local counseling center. I feel I should do this for a little while, while I am trying to get my own practice going. The problem is that in the employment agreement the owner gave me, it states that I cannot work within a 50-mile radius of his office. I live in the area and was hoping that I could work for him a few days per week while starting my own practice nearby. What are your thoughts?

Not Legal Advice

Let’s start with a brief summary of non-complete agreements in mental health (I’m not an attorney, this is only my opinion from experience). Sometimes they’re enforceable, sometimes they’re not. In some states, whether or not a non-compete is enforceable depends on the license the professional holds. For example, in Massachusetts an LICSW cannot be bound by a non-compete, while an LMHC can (even if both therapists do the exact same job).

Next, there is sometimes a legal condition that a non-compete agreement needs to be reasonable to be enforceable. If a non-compete is deemed unnecessarily restrictive, it could be thrown own (not edited) if the matter is ever brought to court. For example, a non-compete that says that one cannot work for another counseling practice might be deemed too restrictive because it doesn’t address one’s capacity of employment (you can’t even work as the bookkeeper?). Similarly, a noncompete could be thrown out if the time is too long, or the distance too far.

However, other states have “big boy/girl” rules, meaning that if you sign it, whatever it is, you’re need to honor it.

Enforceable or Not

Whether or not a non-compete is legally enforceable is only part of the issue. We should all be ethical, and that means we don’t sign agreements that we don’t intend to honor (even if we think we can get away with breaking them). An employment agreement isn’t an iTunes user agreement (that is, something that nobody reads or feels compelled to abide). An employment agreement is likely a just few pages in length, written in somewhat plain English, and outlines how an employer and employee agree to cooperate.

In my reply to the author of the question above, I told her that I think a 50-mile non-complete is crazy. If I were in her shoes, I wouldn’t sign it. Also, I wouldn’t sign any non-compete if I was planning to break it. Instead, if my professional goal was to build my own practice, I’d tell that to the employer.

1. Maybe he’d revise his offer, to make a career at his practice more compelling than a private practice.
2. Maybe he’d be okay to remove the non-compete as long as the counselor agreed not to solicit clients from his practice.
3. Maybe he’d say that he doesn’t want to onboard a counselor who’s planning to open her own practice.

While the later outcome isn’t the desired one, being transparent is really the only good way begin an employment relationship (or probably any relationship). As a side, counselors are in high demand; if this counseling practice doesn’t make a desirable employment offer, there’s another that will!

Practice Owners / Counselors are the Worst!

Understandably, counselors can become frustrated with practice owners who want to bind them into employment contracts that limit their ability to explore new opportunities or strike out on their own. This can feel very unfair.

Understandably, practice owners can become frustrated with counselors who join their practices, are credentialed and assigned hundreds of clients, but then take those clients and open up shop down the road. This can feel very unfair.

The solution, for both sides, isn’t to learn what’s legally enforceable (i.e., what they can get away with); rather it’s to have honest conversations about what both parties want in the short-term and long-term and create a mutually-acceptable agreement that both are willing to honor.