A pair of veterinarians have taken on one of the world’s largest veterinary care conglomerates, fighting a noncompete clause that they suggest unfair business practices.
The lawsuit highlights the rapid consolidation of the pet healthcare industry, as well as growing resistance to covenants to not compete. While you may not be a veterinarian or pet owner, you’re likely to eventually face the prospect of signing a covenant to not compete.
Either stay at your company or lose your livelihood
The veterinarians of a small emergency pet clinic in Spokane, Washington, were recently told to sign a noncompete agreement.
These common contracts typically prohibit employees from working for any business competitor of the employer, usually in a limited geographic area and for a specified period after leaving.
At the Spokane clinic, a new noncompete applied to most of the Spokane region for 5 years after leaving the clinic. If employees did not sign, they would be fired. Two of the clinic’s doctors, each with a decade of service at the business, decided not to sign and instead resigned to work elsewhere. They soon learned things were not so simple.
Corporate muscle forces hard decisions
At some point, the clinic had signed a non-binding agreement with NVA, the second largest pet specialty and emergency care chain with more than 600 clinics around the world. The pair of veterinarians now learned the agreement had already bound them to the noncompete (they were shareholders of the clinic).
The veterinarians were now in the position of either continuing to work for the clinic, leaving the Spokane area, or finding another line of work for the next 60 months. Instead, they chose a fourth option and contacted an attorney.
As noncompete have become more common and often bolder in the restrictions they impose, states have responded to public outcries by limiting the reach of such agreements. In fact, a new law enacted in Washington State this spring places significant limits on such non-competition covenants. The effect of the law on the veterinarians’ suit is not yet clear.