Veterinary Noncompete Clauses and You

After my last post about the consolidation of veterinary services in companies and my concerns, I was tipped off about the related issues of veterinary prohibition clauses and how they affect veterinarian career opportunities. It also affects you as a veterinary customer. Let’s take a look at how and even what the Federal Trade Commission can do about it.

What are veterinary non-compete clauses?

Essentially, it’s a section of a veterinarian employment contract that says someone can’t work for another local competitor in the same geographic coverage area. Typically, incomplete veterinary clauses and similar clauses expire anywhere from 6 months to 2 years after someone quits that job. Basically, it requires people to either move and work farther away or not work at all for a period of time, which is not reasonable for most people in our shared economic climate.

To be fair, it’s not just big veterinary corporations that include veterinary prohibition clauses in their employment contracts. Other smaller vet clinic owners often include them as well.

And as our tipster told me… “Vets are all screwed with current non-compete laws.”

What are the geographic footprints of veterinary prohibition clauses?

Our tipster told me that it’s common for a veterinary clinic offering typical general medicine services in a community to set a geographic radius of at least 10 miles. For specialty hospitals, that radius is likely to extend to 50 miles.

Even worse? Our tipster says: “I’ve heard that before [corporate veterinary noncompete clauses] will also include a 50 mile radius around every corporate hospital they own nationwide! So if a vet buys a home and becomes part of a community, they must stay with that business unless they want a long commute to work or are willing to relocate, which usually doesn’t work when a spouse also needs to have work .”

How Do Veterinary Bans Harm Veterinarians?

Opponents of non-competition clauses say they restrict:

• Veterinary Career Opportunities – Making Vets Feel Stuck
• Veterinary Career Growth – makes career path uninteresting for more people
• Professional earnings in veterinary medicine – make financial burdens from high educational debt and other factors unsustainable
• Veterinarian Job Satisfaction – exacerbates burnout and causes veterinarians to flee the profession

And they may force an expensive move.

How do veterinary non-compete clauses affect you?

Take this scenario. Let’s say there’s a great vet who works for Hospital A. Over the years they have developed a great collaboration in caring for your pets. If this vet changed jobs, you would 100% follow him (which hospital owners worry about).

So your vet is either stuck (and dissatisfied) at Hospital A because they can’t work for nearby Hospital B, OR you end up having to travel much further to continue the relationship at Hospital X, which is way out of geographic radius of the veterinary non-competition clause.

The other possibility is that your vet, who again is great, quits the profession altogether (or worse) due to such limitations in their career. And you need to start over with someone else, possibly in the middle of something important in your pets’ lives.

Additionally, it appears almost everyone in the profession faces understaffing and difficulties in hiring and employing staff in a variety of veterinary roles. Bosses say, “We can’t find anyone!” Employees have the feeling that “there are no more good jobs, well-paying jobs”.

We have already discussed problems with access to veterinary care. Staffing issues make it worse. Non-competition clauses limit who can be hired.

What does the FTC think of non-compete clauses?

This is currently pending Commentary and debate (early 2023).

The announcement of the proposed rule states that because of the way incomplete clauses hamper the right to change jobs (economic freedom) and how they limit worker mobility and wages, including those “not subject to a non-competition clause,” the new Rule would essentially prohibit incomplete clauses in all economic sectors. In addition, employers would have to remove all existing non-compete clauses and “actively inform workers that they are no longer in force”.

The first public comment I found is: “I’m a veterinarian and have been working for almost 40 years. I was an employee and practice owner. I see no justification for non-competition clauses and even feel that it is detrimental to the entire profession. No -Competition is ubiquitous and notoriously difficult to combat I have worked for companies for many years and have watched colleagues attempt to negotiate non-compete agreements and bear the brunt of litigation when trying to challenge the non-compete agreement having to move with the whole family, to get a job? How am I hurting a company by working for a competitor?”

But there is more.