A medical director non-compete clause is not automatically enforceable just because it appears in a signed agreement. Physician restrictive covenant rules vary significantly by state, and enforceability can depend on the physician’s role, the activities being restricted, the duration, the geographic scope, and how the relationship ends. Clinics and physicians should therefore review the applicable state law and have an attorney evaluate the specific agreement before relying on a non-compete.
Key Takeaways
- A signed medical director non-compete can still be unenforceable if state law prohibits physician restrictions or the clause goes beyond what the state permits. (Jump to Section)
- Physician non-compete laws vary significantly by state, with some states prohibiting them and others limiting duration, geography, termination circumstances, or other terms. (Jump to Section)
- Where non-competes are permitted, the restriction generally needs to be appropriately tailored to the physician relationship and the business interest being protected. (Jump to Section)
- Confidentiality, non-solicitation, conflict-of-interest, notice, and transition provisions may sometimes protect a clinic without broadly restricting future medical work. (Jump to Section)
- Medical Director Co. uses attorney-reviewed agreements, with Bolton Harris, J.D. reviewing agreement terms and state-specific requirements. (Jump to Section)
Are Medical Director Non-Competes Enforceable?
A medical director non-compete may be enforceable in some states and unenforceable in others. There is no single nationwide rule that makes every physician restrictive covenant valid.
A non-compete may attempt to prevent a medical director from:
- Working for a Competitor: Restrict the physician from serving another practice offering similar services.
- Practicing Within a Defined Area: Limit certain work within a geographic radius.
- Providing Certain Services: Restrict the physician from performing specific competing activities.
- Opening a Competing Business: Prevent the physician from establishing a directly competing practice for a limited period.
- Working With Existing Clients: Restrict certain competitive relationships after termination.
The enforceability of those restrictions depends heavily on state law.
Numerous states have enacted statutes that prohibit or limit physician restrictive covenants. The American Bar Association notes that states have taken very different approaches, ranging from broad physician bans to restrictions on time, geography, termination circumstances, and other contract terms.
That means a provision copied from an agreement used in one state may not work in another.
The FTC Non-Compete Rule Is Not in Effect
The Federal Trade Commission adopted a nationwide Noncompete Rule in 2024, but that rule is not currently in effect and is not enforceable.
A federal district court blocked the rule in August 2024. The FTC later moved to dismiss its appeals and accede to the rule’s vacatur, and the agency’s current guidance confirms that the nationwide rule is not in effect.
That does not mean physician non-competes are automatically enforceable.
State law remains central to the analysis, and individual restrictive covenants may still face scrutiny under state statutes, contract law, healthcare-specific restrictions, or competition law.
For clinics and physicians, the practical question is therefore not simply:
“Did the FTC ban non-competes?”
It is:
“What does the applicable state law allow in this specific physician relationship?”
State Laws Can Change Whether a Physician Non-Compete Works
Physician restrictive covenant laws differ considerably across the country.
Some states prohibit certain physician non-competes. Others allow them only when specific requirements are met.
Depending on the jurisdiction, state law may regulate:
- Duration: Limit how long the physician can be restricted.
- Geographic Scope: Limit the radius or area covered by the agreement.
- Type of Activity: Restrict only particular competitive activities.
- Termination Circumstances: Treat resignation differently from termination without cause.
- Patient Access: Protect patient choice or continuity of care.
- Compensation: Apply different rules based on earnings.
- Buyout Rights: Require a physician to have a contractual path for release from the restriction.
- Notice Requirements: Require specific contract language or advance notice.
- Healthcare Worker Status: Apply special rules to physicians or other licensed clinicians.
Texas provides a useful example of why current state review matters. Changes effective September 1, 2025 tightened requirements for certain healthcare non-competes, including limits involving duration, geographic scope, termination without cause, and buyout provisions. The statute also contains distinctions that can matter for physicians whose work is managerial or administrative rather than clinical.
Other states use completely different approaches.
The agreement should therefore be reviewed based on the law that actually applies to the physician relationship rather than a general assumption about non-competes.
Reviewing a medical director agreement?
Start with terms built around your state and physician relationship.
The Medical Director’s Role Matters
Not every medical director has the same relationship with a clinic.
A physician may function as:
- A full-time employee;
- A part-time employee;
- An independent contractor;
- A supervising physician;
- A collaborating physician;
- A clinical medical director;
- An administrative medical director; or
- An outside physician supporting multiple practices.
That distinction can affect the restrictive covenant analysis.
For example, a physician who treats patients, develops protocols, manages staff, and builds referral relationships may have a different relationship with the clinic than a physician who performs limited monthly chart review.
The agreement should reflect what the physician actually does.
A broad restriction covering every form of medical work may be difficult to justify when the physician’s actual involvement is narrow.
What Makes a Medical Director Non-Compete More or Less Enforceable?
Where state law permits physician non-competes, several factors may affect enforceability.
The Business Interest Being Protected
A clinic should be able to identify what the restriction is intended to protect.
That may include:
- Confidential information;
- Patient relationships;
- Referral relationships;
- Business strategy;
- Proprietary protocols;
- Specialized training;
- Staff relationships; or
- Goodwill developed by the practice.
The restriction should connect to a legitimate concern rather than simply prevent the physician from competing in any form.
Duration
The length of the restriction matters.
A shorter restriction tied to a legitimate transition period may be viewed differently from a multi-year prohibition.
Some states impose statutory duration limits for physician covenants.
Geographic Scope
A geographic restriction should reflect the actual market or service area where appropriate.
A physician serving one local clinic may not present the same competitive concern across an entire state.
Some states expressly regulate the geographic radius that can be used for physician non-competes.
Restricted Activities
The agreement should identify what the physician is actually prohibited from doing.
Restricting direct competition with a specific service line is different from preventing the physician from practicing medicine altogether.
How the Relationship Ends
Termination circumstances can matter.
Some states limit enforcement when the physician is terminated without cause or impose different requirements depending on whether the physician resigns, is terminated, or completes the agreement.
The Physician’s Actual Role
The restriction should match the physician’s responsibilities.
A medical director who never treated patients or built the clinic’s business relationships may present a different competitive risk from a physician who had direct responsibility for those areas.
Medical Director Status Does Not Automatically Make a Non-Compete Valid
Clinics sometimes assume that a medical director agreement is a business-to-business arrangement and therefore ordinary physician non-compete restrictions do not apply.
That should not be assumed.
The physician may be an employee, independent contractor, owner, supervising physician, or outside medical director.
State laws can define covered relationships differently.
Some statutes extend to independent contractors. Others distinguish employment relationships from business sales or ownership arrangements. Healthcare-specific statutes may also apply separately from general employment rules.
The contract label alone does not answer the question.
The actual relationship and applicable law matter.
Non-Compete and Non-Solicitation Clauses Are Different
A non-compete and a non-solicitation provision are not the same thing.
Non-Compete
A non-compete limits certain competitive work after the relationship ends.
For example, it might restrict the physician from serving as medical director for a directly competing clinic within a defined area for a specific period.
Non-Solicitation
A non-solicitation provision generally focuses on particular relationships rather than the physician’s ability to work.
It may address:
- Patients;
- Employees;
- Contractors;
- Referral sources; or
- Existing business relationships.
A state may regulate these provisions differently.
However, calling a restriction a “non-solicitation clause” does not automatically protect it from scrutiny if its practical effect is to prevent the physician from working.
Alternatives to a Medical Director Non-Compete
A broad non-compete is not always necessary to protect the clinic.
The better provision depends on the actual risk.
Clinic Concern | Possible Contract Protection |
|---|---|
Physician uses confidential business information | Confidentiality provision |
Physician recruits clinic employees | Employee non-solicitation where lawful |
Physician targets existing patients | Patient non-solicitation where lawful |
Physician works for a direct competitor during the agreement | Conflict-of-interest provision |
Physician leaves without transition time | Advance notice requirement |
Physician stops required oversight abruptly | Transition and handoff provision |
Physician uses proprietary systems or materials | Confidentiality or intellectual property provisions |
Clinic needs time to secure a replacement | Defined termination notice period |
Physician takes referral or vendor information | Confidentiality and narrowly tailored non-solicitation terms |
These provisions can target the clinic’s actual concern more directly.
They may also create fewer issues than a broad prohibition on the physician’s future practice.
Does your agreement protect the right risks?
Build the physician relationship around the actual role.
Confidentiality Can Be More Important Than Competition
In some medical director relationships, confidential information is the real business concern.
A physician may receive access to:
- Patient information;
- Pricing;
- Vendor terms;
- Referral relationships;
- Employee compensation;
- Marketing strategies;
- Treatment protocols;
- Operating procedures;
- Expansion plans; and
- Other internal business information.
A confidentiality provision can directly address how that information may be used during and after the physician relationship.
The agreement should clearly define protected information while avoiding language that attempts to treat a physician’s general professional knowledge and experience as proprietary clinic information.
For some practices, this provides more targeted protection than attempting to prevent the physician from working elsewhere.
Patient Relationships Can Affect the Analysis
Physician restrictive covenants can raise concerns that ordinary commercial non-competes do not.
Patient access and continuity of care may be relevant.
State laws or professional requirements may address:
- Patient notification;
- Medical record access;
- Continuity of treatment;
- Existing physician-patient relationships;
- Referral responsibilities; and
- Transition of care.
A clinic should therefore consider more than its own competitive interest when drafting restrictions involving a physician who directly treats patients.
This is another reason physician agreements should receive state-specific legal review.
Termination Terms Should Be Reviewed With the Non-Compete
A restrictive covenant should not be reviewed in isolation.
The termination section may determine when the restriction becomes relevant.
Review what happens if:
- The physician resigns;
- The clinic terminates the physician without cause;
- The physician is terminated for cause;
- The contract expires;
- The parties mutually terminate the agreement; or
- The clinic changes ownership.
Some states now specifically limit enforcement following termination without cause.
For example, Virginia enacted a 2026 law limiting enforcement in certain circumstances when an employee is terminated without cause and required severance conditions are not satisfied. Other states use different rules.
The non-compete and termination provisions should therefore be evaluated together.
What Clinics Should Review Before Adding a Non-Compete
Before including a restrictive covenant in a medical director agreement, a clinic should ask:
- Is the Provision Permitted? Confirm what current state law allows for physicians.
- What Are We Protecting? Identify the actual business interest at risk.
- Does the Clause Match the Physician’s Role? Avoid restrictions that extend far beyond the medical director’s duties.
- Is the Duration Appropriate? Check both statutory limits and reasonableness.
- Is the Geographic Scope Appropriate? Make sure the restriction reflects the actual market where applicable.
- Are Patient Relationships Involved? Review continuity and patient-choice considerations.
- What Happens After Termination? Confirm whether termination circumstances change enforceability.
- Would a Narrower Provision Work? Consider confidentiality, notice, transition, or non-solicitation alternatives.
- Has Current State Law Been Reviewed? Restrictive covenant law changes frequently.
- Has an Attorney Reviewed the Final Agreement? Do not rely on a generic template.
A restrictive covenant should solve a defined business problem.
It should not be inserted automatically because it appears in another medical director contract.
What Physicians Should Review Before Signing
A physician should understand the restriction before entering the relationship.
Review:
- Restricted Work: What activities are prohibited?
- Duration: How long does the restriction continue?
- Geography: Where does it apply?
- Competitor Definition: Which businesses or services count as competitors?
- Patient Restrictions: Are patient relationships affected?
- Employee Restrictions: Does the agreement limit recruiting or hiring staff?
- Termination: Does the restriction apply regardless of why the relationship ends?
- Buyout Terms: Is there a mechanism for release from the restriction?
- Remedies: What happens if the clinic claims the physician violated the agreement?
- Governing Law: Which state’s law controls?
- Venue: Where would a dispute be handled?
- State Physician Rules: Does the jurisdiction specifically regulate physician restrictive covenants?
A physician should not wait until the relationship ends to determine what the clause means.
Questions about a specific restriction should be reviewed with an attorney licensed in the applicable jurisdiction.
How Medical Director Co. Handles Agreement Review
Medical Director Co. includes attorney-reviewed agreements as part of its physician placement and oversight services. Its current placement materials describe state-specific documentation and attorney-reviewed medical director agreements as part of the physician relationship rather than leaving clinics to source agreements separately.
Bolton Harris, J.D., Medical Director Co.’s in-house healthcare attorney, reviews agreements and works on collaborative practice agreements, regulatory requirements, and physician-practice documentation. Medical Director Co. also states that agreements receive legal review before they reach the practice.
That review can address issues such as:
- Physician responsibilities;
- Required clinical oversight;
- Chart review;
- Consultation availability;
- Termination;
- Indemnification;
- State-specific documentation; and
- Restrictive provisions where applicable.
A non-compete should not simply be added because it appeared in another agreement.
It should be evaluated based on the applicable law and the actual physician relationship.
Medical Director Co. currently offers physician placement with attorney-reviewed agreements and ongoing compliance support starting at $799 per month, with qualified physician matching generally available within 24 hours.
Need a medical director and an attorney-reviewed agreement?
Get both through one placement process.
Medical Director Non-Compete Review Checklist
Before relying on a medical director restrictive covenant, review the full agreement.
Agreement Question | Confirmed | Needs Review |
|---|---|---|
Current state non-compete law reviewed | ☐ | ☐ |
Physician-specific restrictions reviewed | ☐ | ☐ |
Medical director’s role clearly defined | ☐ | ☐ |
Legitimate business interest identified | ☐ | ☐ |
Restricted activities clearly defined | ☐ | ☐ |
Duration reviewed | ☐ | ☐ |
Geographic scope reviewed where applicable | ☐ | ☐ |
Patient relationship rules reviewed | ☐ | ☐ |
Termination circumstances addressed | ☐ | ☐ |
Independent contractor or employee status reviewed | ☐ | ☐ |
Confidentiality protections included where appropriate | ☐ | ☐ |
Non-solicitation terms reviewed separately | ☐ | ☐ |
Transition obligations clearly defined | ☐ | ☐ |
Governing law identified | ☐ | ☐ |
Agreement reviewed by appropriate legal counsel | ☐ | ☐ |
A “Needs Review” result does not automatically mean the clause is unenforceable.
It means the issue should be evaluated before either side assumes the restriction will work as written.
FAQs
Are medical director non-competes enforceable?
A medical director non-compete may be enforceable depending on the applicable state law and the terms of the agreement. Some states prohibit or substantially restrict physician non-competes, while others permit them subject to specific requirements.
Are physician non-competes legal in every state?
Physician restrictive covenant laws vary substantially by state, and numerous jurisdictions prohibit or limit them. State-specific review is necessary before relying on a physician non-compete.
Did the FTC ban medical director non-competes?
There is no current nationwide FTC non-compete ban in effect. The FTC’s 2024 rule was blocked in federal court, and the agency states that the rule is not in effect and is not enforceable.
What makes a medical director non-compete enforceable?
Where state law allows non-competes, enforceability may depend on factors such as the business interest being protected, duration, geography, restricted activity, physician role, and termination circumstances. The applicable state standard should be reviewed before relying on the clause.
Can a clinic prevent a medical director from working for another clinic?
Possibly, depending on state law and the scope of the restriction. A broad prohibition against future medical work may face different scrutiny from a narrower restriction tied to a specific competitive concern.
Can an independent contractor medical director have a non-compete?
Potentially. Independent contractor status does not automatically make a restrictive covenant enforceable or unenforceable because state laws define covered relationships differently.
Is a non-solicitation clause the same as a non-compete?
No. A non-compete generally restricts competitive work, while a non-solicitation provision typically addresses specific patients, employees, or business relationships. Both provisions should still be reviewed under applicable state law.
What can a clinic use instead of a medical director non-compete?
Alternatives may include confidentiality provisions, employee or patient non-solicitation terms where lawful, conflict-of-interest clauses, advance termination notice, transition obligations, and protection of proprietary information.
Should a physician have a medical director agreement reviewed before signing?
A physician should consider obtaining legal review when an agreement contains provisions that could materially restrict future work or create significant contractual obligations. This is particularly important for restrictive covenants because physician non-compete laws vary significantly by state.
Does Medical Director Co. provide attorney-reviewed agreements?
Medical Director Co. includes attorney-reviewed agreements and state-specific documentation with its physician placement services. Bolton Harris, J.D., Medical Director Co.’s in-house healthcare attorney, reviews physician agreements and compliance documentation.
Medical Director Non-Competes Require State-Specific Review
A medical director non-compete is not automatically enforceable simply because the physician signed it. Clinics and physicians should review the applicable state law, the physician’s actual role, the scope of the restriction, and possible alternatives before relying on the clause.
Medical Director Co. combines physician placement with attorney-reviewed agreements and ongoing compliance support, but questions about the enforceability of a specific restrictive covenant should be reviewed by an attorney licensed in the relevant state.
Build your medical director relationship on the right agreement.
Get physician placement with attorney-reviewed documentation.
Bolton M. Harris, J.D., is a seasoned attorney with a formidable background in criminal law and a focus on healthcare law and compliance. As the in-house legal counsel at Medical Director Co., Harris brings a unique blend of prosecutorial experience and regulatory expertise to support healthcare professionals across Texas. Her career spans roles as a prosecutor in multiple counties and now as a trusted advisor on the legal intricacies of medical practice operations.
Education & Early Career
Bolton Harris completed her undergraduate studies at Southern Methodist University (SMU) in 2013. During her time at SMU, she was not only a dedicated student but also a competitive athlete on the university’s women’s swimming team. She went on to earn her Juris Doctor from Texas A&M University School of Law in 2016 and became a member of the Texas Bar that same year. Armed with a strong academic foundation and discipline honed as a student-athlete, Harris embarked on a career in criminal law immediately after law school.
Prosecutorial Experience in Texas
Bolton Harris began her legal career in public service as a criminal prosecutor. She served as an Assistant District Attorney in multiple jurisdictions, where she quickly rose through the ranks and handled a broad spectrum of cases. Some highlights of her prosecutorial career include:
- Assistant District Attorney, Dallas County, Texas: Prosecuted a high volume of criminal cases in one of the state’s busiest DA offices, gaining extensive trial experience in both misdemeanor and felony courts.
- Assistant District Attorney, Ellis County, Texas: Continued to hone her courtroom advocacy skills, known for meticulous case preparation and a tenacious pursuit of justice on behalf of the community.
- Assistant District Attorney, Navarro County, Texas: Broadened her legal expertise by handling diverse criminal matters in a smaller county, working closely with law enforcement and community leaders to uphold the law.
Through these roles, Harris built a reputation for being a tough but fair advocate. She brought numerous cases to trial and developed an in-depth understanding of the criminal justice system. This distinguished prosecutorial background laid a strong foundation for the next phase of her career in the private sector.
Healthcare Law & Compliance at Medical Director Co.
After her tenure as a prosecutor, Harris shifted her focus to healthcare law, applying her legal acumen to the medical field. She recognized that the same attention to detail and tenacity that served her in criminal law could benefit healthcare providers navigating complex regulations. Embracing this new direction, Harris became well-versed in the intricate laws governing medical practices – from licensing requirements to patient safety and privacy standards – and is passionate about helping practitioners stay compliant.
In her current role as the in-house attorney for Medical Director Co., Bolton Harris oversees all legal and compliance matters for the organization and its clients. Medical Director Co. is a nurse-owned firm that connects nurse practitioners (NPs), physician assistants (PAs), and registered nurses with qualified medical directors and collaborating physicians, offering fast placements and comprehensive compliance support for healthcare practices. Harris ensures that each of these partnerships and clinical ventures adheres to all applicable state and federal laws. She is responsible for drafting and reviewing collaborative practice agreements, advising on regulatory requirements, and providing ongoing legal counsel as clients establish and grow their clinics. Drawing on her prosecutorial eye for risk management, Harris proactively identifies potential legal issues and addresses them before they escalate, giving healthcare professionals peace of mind.
Bolton M. Harris’s multifaceted expertise – spanning high-stakes courtroom litigation to detailed healthcare compliance – makes her a formidable legal ally. Whether advocating in front of a jury or guiding a medical practice through regulatory hurdles, she remains committed to the highest standards of the legal profession. Her blend of courtroom-tested skill and healthcare law knowledge ensures that clients of Medical Director Co. receive elite-level counsel and steadfast protection in an ever-evolving legal landscape.
