Three nurses query their former employer’s non-competition agreement

In fact, contract law permeates nursing practice in some ways. For example, you should use contract law to challenge an employer’s breach of an express or implied employment contract within the event of dismissal. Another area where contract law and your practice may often intersect is when your employer requires you to sign a non-compete agreement (also referred to as a non-compete agreement). I undertake to not compete), as a stand-alone document or as a part of an employment contract. An employer views a non-compete agreement as helping to scale back competition after the worker’s employment ends – either by stopping you from sharing information along with your recent employer about your previous employment or by encouraging former colleagues to hitch you in your recent job. Many people, nevertheless, imagine that such an agreement is in direct conflict with cherished American principles of the correct to earn a living and free Entrepreneurship. In the next thingthree Wyoming RN employees disputed the non-compete agreement they signed with their former employer, a house health agency, and were hired by a competitor.

Details of the non-competition agreement

The home health agency where the RNs worked required employees to sign a written non-compete agreement that stated:

• They were at-will employees.
• The agency had the correct to rent or fire them at its discretion.
• There were post-employment restrictions including “directly or indirectly” competing with the corporate by providing home health care services that were “similar or capable of being substituted” [its] services.”
• The restrictions lasted for 24 months after termination and applied “in an area encompassing 50 miles in all directions from the office or location” where the employees worked.
• Agency information was to be treated confidentially.
• Employees were not allowed to encourage them to work for competitors.
• The agency obtained permission to search warrant if the conditions have been violated.

Two of the RNs were already employed by the agency when they were asked to sign a non-compete agreement. The third RN signed the contract upon employment. After leaving the home health agency, all three RNs went to work for one of the agency’s competitors. The former employer filed a lawsuit alleging that the nurses violated applicable non-compete agreements and asked the court to issue a preliminary injunction prohibiting the RN from working for a competitor while the lawsuit was pending. The nurses challenged this order, arguing that the no-competition agreement was unenforceable. The district court ruled that the contract was “valid and enforceable” and prohibited the RN from working for a competing agency. The Supervisory Board appealed against the verdict.

Court of Appeal ruling in favor of nurses

The appellate court carefully considered state law and court decisions regarding non-compete agreements. Because freedom of contract and labor are inconsistent with an agreement not to compete, the court must strictly interpret and carefully examine each such agreement. If the court finds that these rules are being hindered, the restriction of competition should be deemed invalid unless such restriction is necessary for the reasonable protection of the employer. A non-compete agreement is valid and enforceable only if:

• In writing
• Part of the employment contract
• Based on reasonable considerations (offering and accepting something of value)
• Reasonable in terms of duration and geographical restrictions
• Not against public policy

Additionally, such an agreement is supported by remuneration when it is agreed “concurrently” with the employment itself. In this case, the court ruled that two RNs who signed the contract after a certain period of employment with the agency were not included. Separate remuneration is required in the form of a raise or promotion (for example). Continuing employment is not an appropriate solution. Even though the third RN signed an agreement upon hire, which would have satisfied the compensation requirement, the court assessed the other factors required for the noncompete agreement to be valid and enforceable. In particular, the court examined whether the non-compete agreement violated public policy. Although the trial court found that the agreement did not violate public policy, it did not assess whether it constituted a “reasonable restraint of trade.” The court opined that the agency failed to prove that the employer’s trade secrets, confidential information provided by the employer to the employee, or any other “special interest” that was the subject of the contract justified that it constituted a reasonable restraint of trade.

The court emphasized that an employer may use a non-competition agreement “to guard against inappropriate and unfair competition from a former worker, but ‘he isn’t entitled to protection against peculiar competition’.”

Finally, the trial court abused its discretion by not allowing witness RN to testify about how the order issued could harm the public. The case was discontinued and remitted to the court for reconsideration.

Implications for you

The outcome of the case is unresolved as it has been remanded to the trial court for further proceedings. Still, this case is a good example of an unenforceable covenant not to compete. Please note that this case was decided in Wyoming, where home health care is limited. Banning the three RNs from working for a competing agency could directly impact the availability of such services to Wyoming citizens and are greatly needed, especially in rural areas. However, the district court did not admit any evidence confirming this influence. Moreover, the court of first instance did not assess the duration of the non-compete agreement (24 months) and the prohibition contained therein for the RN to work within a 50-mile radius of the previous employer’s headquarters or the places where the RNs worked. This broad exclusion area would essentially result in an RN being barred from practicing as a home health nurse in most of Wyoming for two years. You will most likely need to move. It should be noted that in some states, unlike Wyoming, signing a non-compete agreement is not required upon hire. To learn how your state handles signing non-competition agreements, click here Here. If you’re asked to sign a non-compete agreement, either as a stand-alone document or as a part of an employment contract, seek the opinion of a nurse-legal advisor or a lawyer who deals with labor law and represents employees. An attorney can advise you on its validity and enforceability by assessing the relevant elements discussed on this blog.

Take related courses:

Nurses have a responsibility to remain current on current issues related to the regulation of nursing practice not only of their states but additionally across the country. Nurses have an obligation to patients to perform their work in a secure, competent and responsible manner. This requires nursing licensees to practice in accordance with state statutes and regulations. This course provides information regarding nursing practices and their impact on nursing practice.

This course provides an summary of bioethics because it applies to health care and nursing within the United States. The course explains the weather of ethical decision-making because it applies to each patient care and ethics committees. The course concludes with a take a look at the moral challenges related to physician-assisted suicide, organ transplantation, and genetic testing.