¶ Non-Competes and Doctor Contracts
My first contract that I had . It was a three-year contract but there was a non-compete in there . Mine said that basically , like I can't work at another hospital within like 50 aeronautical miles , that's a lot of miles . I'm not sure why they use aeronautical miles .
I do think what's happened is there's been widespread abuse of the non-compete , which literally restricts basically entrepreneurship or even people just going and being able to make a living for their family . I can't even get a job , I can't keep my home , I have to literally move somewhere else .
To another state . 50 miles is a lot . All right , takora Davis , esquire , jd lawyer , attorney , attorney , counsel , counsel , founder of the Creators Law Firm . Welcome to Docs Outside the Box . How are you doing , takora ?
I'm wonderful . Thank you , guys for having me today . I'm happy to be here .
Oh yeah , we really want you here because there's a lot for us to talk about . Specifically , we want you here to talk about the FTC , which is what the Federal Trade Commission . Back in April they released a ruling or they put out a ruling that in essence bans most non-competes out there in employee contracts .
There's a lot of specifics but without getting into specifics too much , I'll just summarize really quickly . In essence , the FTC back in April said that most non-compete clauses in employee contracts they are banned . This is effective September 2024 . Contracts they are banned . This is effective September 2024 .
And it's basically invalidates the non-compete agreements that are existing and it's mainly for for-profit businesses , from what I understand , and it does not apply to nonprofits , which low-key . The majority of doctors who are employed work at hospitals that are nonprofits doctors who are employed work at hospitals that are non-profits .
So that's a caveat that we want you here to kind of take that opaqueness out the way and stuff , um , but yeah , I as uh being you know we as practicing docs for over 10 years now . I just want everybody to know that my first contract that I had , um , it was a three-year contract but there was a non-compete in there .
As a trauma surgeon , I think Renee , did you have one also ? Yes , I did . Mine said that basically , like I can't work at another hospital within like 50 aeronautical miles , which I'm not sure why they use aeronautical miles and it specifically said aeronautical miles , not regular miles .
So I don't know why they did that .
But the question that I want to start off with you is this like from my standpoint , like I'm so used to seeing non-competes mainly like with tech companies , mainly because they're trying to protect something like they're trying to protect information .
Ip , like Apple , has a bunch of people who are working for them and they don't want those workers to go to Google and take some of the trade secrets Absolutely . But what I'm confused about is with doctors what's the trade secret ? The trade secret is what I learned in med school . Right , like there is no , like I feel like there's no secret .
There's no secret sauce at the hospital . The secret sauce lies within me . So how are non-competes even valid for doctors when they're the ones who have all the knowledge ?
That's a great question . I love you . You're coming out the gate swinging , so what's in essence ? You know ? one let's talk about what a non-compete is Right .
So non-compete is a clause that is placed inside of contracts , workplace policies , handbooks , and it's really a condition for employment and it is to prohibit the worker , the employee , from going out , or it penalizes them from going out and basically , either starting a competitive business or operating a business for a competitor , a counterpart Right , and that happens ,
or it should go into effect at the conclusion of employment . And so generally , people , the history of these non-competes was really to preserve the competitive advantage , to reward entrepreneurship . However , as time has went on , employers have actually abused them , or arguably , yeah , they're going a little too far .
Right , it's like you're doing a little too much .
Right , especially with the aeronautical miles I'm like , well , that's a bit much
¶ The Impact of Non-Compete Clauses
.
And so , in essence , we see the incorporation or over time we saw the incorporation of these particular non-competition clauses into contracts for doctors , because they are essentially saying , hey , we want to preserve the competitive advantage of the hospital and I think if we really look at how America views medicine , it is not necessarily I don't know , and this might
be a little controversial .
Give it to us , Give it to us raw and direct . We good Give it to us .
It's not necessarily a human right . It's a commodity . If you go to another country , it's , more so , viewed as a human right , even personality rights .
In the European Union it's viewed as a human right , but here it's also viewed as a commodity , and so if it's viewed as a commodity and you , as the doctor , is viewed as a commodity , then they want to make sure that you don't go anywhere else . Recruiting a medical provider , a professional , a doctor , is very costly .
It probably costs a lot more money to recruit than to retain , and so you know , when it comes to retention , we used to take an all them state dinners . He's taking all them state dinners Right and then .
I got to take something to go for Renee also , right , and that's just fake . Right .
You know , and so you know the non-compete clause . In essence it's supposed to be only for employees , not independent contracts . You know , only for employees not independent contracts .
You know Right , we're going to get to that in a second . Okay , all right .
Right , right , and it's supposed to . It's not supposed to be for independent contractors or externs or interns or volunteers or apprentices or anything like that , right , and so that's really kind of the historical aspects of it , but why it was applied to medical providers in the first place .
Obviously you all are viewed as a commodity , right , and medicine is very lucrative in this country , and so all of that and the politics of it all comes into play . Does it make it right ?
No , but that is what it is what it is yeah , so this is the next thing I have a question about . Just because it's in your contract , does it mean that it's legal ? That's another great question , Because for years for years I've heard people saying that , listen , the , if you have a non-compete they can't enforce that .
But then it wasn't until we heard this FTC thing that came out . So I'm just wondering like aren't there things that are unenforceable , ftc ?
thing that came out .
So I'm just wondering , like , aren't there things that are unenforceable , absolutely Right , so non-competes , they are just thrown into contracts and you'd be surprised Sometimes lawyers are not drafting some of these contracts this day and age because people are like I'm going through chat GPT , because that's my lawyer and I'm going to throw some stuff in there .
That's scary lawyer and I'm going to throw some stuff in there which is crazy . I'm going to make an aside and I'm going to come back .
But using AI for legal counsel is a really bad idea , because AI generative AI is really amazing at general concepts and overarching education , but it's terrible , terrible at um a nuanced versions of the law , and so it will hallucinate , and so that is actually a term of art , which means it's just gonna start making stuff up so that's literally what it would do .
So anyway , are they ? Are they using it now for like ? I can see people using it now for like the legal zooms or for like wills but like they're using it more than that .
Yeah , absolutely . People are using it all the time to actually just draft a contract for themselves because they're assuming that , hey , you know it's , it's open source , it's going to be able to pull things from all over the place , but it doesn't necessarily mean it's valid . And speaking of valid , we're talking about non-compete clauses .
It definitely can be unenforceable , based upon how it is drafted in the contract itself , as well as what is reasonable within the industry itself . Enforceable it has to be reasonable , reasonably restricted in duration , generally less than one year . It has to be reasonable in the restriction of the type of work activities and the geographic scope .
And so somebody , for example which is so interesting how our industries are quite different it is illegal and unenforceable to actually make a lawyer sign a non-compete clause , you see , because lawyers , always , y'all be fighting for yourselves . Right .
We don't say nothing .
We be turning the other cheek Right , unless , for example , someone sold their practice . So if it is a part of the sale of a law firm to another lawyer , then it makes more sense , but to tell another lawyer that they can't practice law in a particular jurisdiction ?
Right , even even those who are in firms .
Yeah , even those who are . Oh wow , unless you know this person is at such a high level , who is at an executive level , which most people aren't .
Generally , you're not sitting on the board , you're not understanding what's happening at the business , the operational level , and so , generally , these things were put into place to preserve other people's competitive advantage , to protect trade secrets .
However , your intellectual property and your trade secrets can still be protected , even if a non-compete clause is not in the contract itself , and that's done by way of a non-disclosure agreement , a confidentiality agreement , and if someone breaches the confidentiality agreement and discloses trade secret , then they should have to pay a fine .
That's the way to protect your intellectual property , not by using a non-compete , but that's how people have been leveraging it and how it's really just hurting a lot of individuals . Specifically , we're going to focus on doctors .
You know , removing a doctor from a community that can provide services is hurting the community itself , and so it really is a detriment to force , you know , a doctor to adhere to these non-competes . And I would argue that 50 aeronautical miles is unreasonable . It's an unreasonable geographic scope , right ?
Sometimes , what courts have upheld is like saying , hey , within 25 miles or less , and of course , this does also come down to the state in which you operate in .
So , even though you know , you have things at a state level , so some states will enact certain laws when it comes to non-compete , but what the FTC is doing is at a federal level , and so it's going to be across the board and nationwide , so it would overhaul any state law that would say otherwise .
Right right . Because you know doctors oftentimes right . So I will tell you that oftentimes I tell people who are W-2 employed what you tell them who are W-2 employed , that if you work for a hospital , these patients are technically not your patients , they are the patients of the hospital , of the hospital .
And so that non-compete clause I can only imagine was put in place so that doctors wouldn't necessarily say , well , I'm leaving , I'm going to hang up my own shingles , start my own practice Across the street , across the street , and then now my patients who I was seeing at the hospital are now going to come to my practice and you know there'll be a dearth of
patients at the hospital's clinic , for example . Can you talk a little bit about that ? Because I think that that is , that's a real thing , right , and we have to think about , well , what does this mean ? One for the community , what does this mean , you know , for the patients who are losing that doctor from that facility ?
But what does that mean for the doctor who's like , listen , I've established a name for myself in this community and I think I deserve to be able to set up , you know , set up my own practice and you know , have a have a good start with the patient base that I was taking care of in the first place .
Yeah , no , absolutely . And again , because we talked about medicine being used as a commodity or viewed as a commodity , the patient is the commodity as well , right , and so that's where the power is at right , Exactly . So they're making money from the patient .
So if you do take the patient , that's money walking out the door , right , and so that's the rationale there . And I have to compare it to lawyers .
So if a lawyer leaves a practice and I think probably what would be greatest if it was comparable or the status that was used is analogous to what happens with lawyers in what is the formal thing to do is you notify all of the clients , you let them know that you are leaving and they get to choose whether to stay or to go with you .
I said you give them a choice , you put a line in the sand .
Yeah .
Right and that we do something very similar in medicine .
We do something very similar in medicine .
I am leaving , but I think we are always told you can't tell the patient where you're going . Is that is that a thing . I don't know if that's a real thing .
That's really interesting , because if you tell them that you're leaving , why can't you tell them where you're going ?
And so I would have to kind of look and see if there's a nuance there , because generally , again , when you look at the non-compete , the law just really says it has to be reasonable in time , scope , geographic location and you know , again , most of the time it a non-compete .
What's wrapped up in that is , they say you cannot solicit new business or business from our existing client pool . Right , because it's crazy that I'm about to say this , but , as an intellectual property attorney , part of a trade secret is really like all of my clients , right , and it's the same thing for hospitals .
So they're saying , hey , I put forth from their position , let's just put ourselves in their shoes . What they're saying is , yeah , I have spent a significant amount of money recruiting this doctor . We have spent a significant amount of time , energy , resources , training them and providing them with this , uh , this place to thrive and to learn .
Right , and the patients are coming based off whether it be our marketing , location , proximity , all this type of stuff in there together .
So that is their particular position as an employer and that is why you know , if someone left every time they got upset or under those particular circumstances , it would destroy that particular system which is why , you know , from their perspective , this makes sense for them .
But I do think what's happened is there has been widespread of reuse of the non-compete , which literally restricts basically entrepreneurship or even people just going and being able to make a living for their family .
Why should you have to be able to move , like some people just say I can't even get a job , I can't keep my home , I have to literally move somewhere else , yeah , 50 miles is a lot 50 miles is a lot Like , for example , the state of Pennsylvania , like , depending on which state you're at and the way in which medicine is going right now with hospitals they're
merging so much so if you sign with a hospital in one part of Pennsylvania and then they happen to merge with several other hospitals , and they go to a different region , like that rule .
That rule could also be in effect for wherever Right and that actually is occurring right now where you know , in the state of Pennsylvania , you basically have like three large hospital systems .
Right , you have a UPMC on one end , you have Geisinger , which is getting taken over by Kaiser , which is even bigger than Geisinger , and then you have like stuff that's going on in Philadelphia . You know , we have the Jeffersons and so forth and they're all kind of competing .
So it's like , like you said , like it can cause someone to have to leave the state .
Right .
And even depending on what part of the state you're at . If so , I know that you know California .
They really led the charge because they saw how things were going and they were the first thing to enact legislation that voided employment contracts , that restricted the ability of anyone to earn a living in a business , trade or profession , including the medical profession you know , and so a lot of times , including the medical profession , you know , and so a lot of
times Way to go , callie , way to go .
Yeah , callie , will lead the way they do .
They always start in something right , like they always start the trend , but it's also expensive as heck to live in . Well it is . The gas is like $10 . Yeah , well , which is ?
true , but they do .
They're good at starting trends . You know , basically a medical provider or a hospital . They can no longer seek to enforce a non-compete or like any other , like restrictive trade clauses or restrictive covenant in their employment contract and those employers . They cannot refuse to hire a doctor or a healthcare worker who refuse to sign an employment contract .
This is in Cali .
Okay , all right .
Yeah , Cause that's the thing .
Like the other thing too is if that's the case , then why is it in their contract ? Cause I heard what you said . If they refuse to sign them , why are they having it ?
Why did they put it in there ?
anyway , right , they're going to try , but if they , but if you sign , sign it . It's not enforceable .
In some places . Here's what I'm saying .
¶ Understanding Non-Compete Clauses in Contracts
A non-compete clause can be drafted correctly .
If it's drafted improperly , then it renders that clause unenforceable . So in order for a non-compete clause to be enforceable , it has to be reasonably drafted . It has to be , reasonable in the time limit that they restrict your ability to , um , you know uh , either start a business or work for someone else . It has to be reasonable in time the length .
It has to be reasonable in geographic , uh location and it has to be reasonable what they're asking you not to do , like I'm . Like , if I work at lowe's and I put the paint up , why can't I go work at Home Depot ? Like that's ridiculous . You know , and then make the folks , like that you know , sign these things . So again , go ahead .
terms of the miles what's reasonable in terms of what you can't do . How does someone who have that in their contract figure that out ?
So , before you answer that question , I want to say that you know , because you talked about , you know the criteria by which it would have to be enforceable or unenforceable .
I think you just Kanye West me .
But I'm going to say one Hold on for a second Nia .
I'm going to let you talk .
Cora's like yep , talk decor is like yep . Dr renee had the best comment of all time .
Okay , um , this is our life decor but the other , the other non-spoken piece criteria criterion , I'm assuming , is the doctor or the person who was affected would actually have to know that this is unenforceable , that this is unreasonable , because if they do not know , then they will just follow suit because it says so in my contract .
Absolutely . I think the other thing too is that people don't realize that just because a contract is presented to you in a PDF , that you can't negotiate it . So a lot of times people are like Standard contract . Yo , I didn't even know that of times people are like okay , Standard contract .
Yo , I didn't even know that's a Jedi mind trick actually .
Standard contract .
Because you feel like Don't send it to them as a Word document . Right , yeah , we do the same thing now .
It's a PDF , right , or if it's printed out , right , and you're sitting here like I guess , I guess I get my pen , and so people don't have . They don't have the experience , and some of us are first generation . Insert this here I'm a first generation attorney , you know y'all may or may not be first generation doctors , right .
So we are .
All right . So it's like can you call up Uncle June ? I got an Uncle June , Right . Right , I call up Uncle June and ask him you know , hey , I stubbed my big tongue . You know what do I do , you know ? Or , hey , I have this contract . Should I sign it ? That's it .
Let me tell you this right here .
You tell him Like right Did you say young buck ?
Yes , he does . It's more of a country . It's a southern , very deep southern twang , you know you know , or like to the show too . Right , or he'll say them jokers , you know so that's right . So when you are presented with a document and it seems like this is ironclad , people don't even think oh , I should be able to negotiate this provision .
I think after practicing law for maybe seven and a half years , I've actually had maybe two clients say can you change this in the contract ?
And sometimes I make a change , really Right . Yeah , sometimes I make a change ?
Yeah , just two out of hundreds , right . And again , because most people think , well , this is what it is . But you know , if you and or this is the worked set up he made they make doors , okay , they make doors for places like doors for hospitals and things like that .
And he had been working there for like three or four years and management brought everybody in short room together . They were like we have a new contract we want you all to sign , and the contract had a non-compete provision . So he was like this seems weird .
He called me up and he was like I don't want to sign this and I said well , are they giving you a pay raise ? He was like no , my pay raise is going to be the same , nothing's changing . I was like listen , go ahead and sign it .
It's not enforceable Because a lot of times , depending upon the jurisdiction , what you need to have in a contract in order for a contract to be enforceable is three things Offer , acceptance of that offer and consideration . So someone is offering you a job at a certain salary , right . You accept that job . Consideration is an exchange of value .
I'm giving you my labor in exchange . You pay me money every two weeks , right . But for him . There was no new consideration , he wasn't getting a pay raise , he wasn't getting a bonus , they weren't giving him no gas card . It was just , it is what it is .
So I said , fine , there's no new consideration , and even if they did try to enforce it later , it's not going to be enforceable . This is actually not a validly enforceable contract , and some jurisdictions and some they'll say well , continued employment is consideration , but many it's not . And so he had the benefit of having a baby sister who he could call .
You know , and I just tell him that so if you , if you drive it right now and they listen and someone is listening and they're like , yeah , I that in my contract I'm trying to get this taken care of .
Like how , what should someone do right now outside of just like rolling to like their doc , rolling to like the ceo's office with like ice cube of a bat , I want out of this , out of my contract right now .
I want out of my contract , don't do that right in a good day , don't do that so , but what is the next step ?
to say like , like look , I just want this out of my contract . Like one , should they ignore ? The question is does it even matter ? Or should they take the steps to start the process of just saying I want this out of my contract ?
OK , so you know , we don't want to poke bears and bulls unless we actually have to Right and we also want the disclaimer that tagora davis is not your attorney .
I was .
This is not it go ahead , let her say that go ahead let her say that go ahead , go ahead maybe she got a scholarship .
I didn't even got my michael , but hey um hold it upside down , listen .
Listen , y'all . Don't try to sue us . Don't try to sue us .
So this podcast is just for educational , informational purposes only . Neither I nor these beloved doctors are giving you legal advice or medical advice . Y'all are on your own . We just try to share stuff with our community .
That's right . Go pay somebody that you consume . Who gave you the bad information ? Okay ?
if y'all need my help , you know we can exchange it . We gotta uh sign some contracts . You gotta send me several ben franklins and we'll be good um that high .
That's your retainer yeah , yeah , several there's not even a number , it's just several , several . Okay , she wasn't high , that's your retainer . Yeah , yeah , several . There's not even a number , it's just several , several okay she wasn't specific .
That's scary , okay , no , send me 511 511 ben franklin .
Okay , so , um , I would pay the consultation fee for an attorney who really specializes in health care law , because they will really know they're going to have their finger on the pulse of this and not just someone who is a generalist like my . Specialty , again , is , you know , business law and intellectual property law .
For small business entrepreneurs , scrappy individuals , right , but folks who really do in practice health law , they're going to have a really great understanding of not only what's happening at the level of health care , right , but they're also going to understand it from a business perspective .
Find someone who is licensed to practice in your state as well , and then from there I would have them look at the contract , look at anything that is publicly available and advise you of what your next moves could potentially be . That would be the very first thing that I would do , because they may look at it and say you know what ?
This isn't even enforceable , or you know what ? You don't have to do anything because it's September , it's already going to go into effect and into play , depending upon where you work . So that would be what I would say to do .
I would not try to pull a TLC and say give me all my money Right , let's not do that , but that would just be what I would absolutely do if I was in that situation , because there is some .
There have been a few incidents , lawsuits brought to try to stop this from uh coming into play , which I thought yeah , I think some hospitals , some hospitals are like yeah , we're not trying to let y'all free yeah , no , no .
They was like y'all keep working on this plantation doctors not getting their juneteenth oh no I shouldn't have said that too soon , too soon I mean yeah it just became a holiday a couple years ago it's already been co-opted . Ice cream , oh my so I actually was the . Did you try to do ice cream ? No , I did not .
Oh okay , red , red devil velvet cake no I did not . Oh so , but I was the attorney that actually kind of broke that , because I mean , I saw it , somebody had put it out there and I was like let me go and see who owns this trademark .
And then I discovered it was an eight and a half by 11 person who owns the trademark , and I'm like , wait a minute .
Eight and a half by 11 .
He didn't catch that he did . It was an eight and a half by 11 . He didn't catch that he did . It was eight and a half by 11 person .
I'll explain it to him later , okay .
It was a hex code F F , f , f , f F . Person who owned the trademark . So I just thought wait a minute . I get it now .
I get it now . He know the hex codes . Yeah , he know the hex codes when he do the hex codes .
It's like oh yeah , that's what that means . Okay , Got it All right . It means someone from the- . This is good , I love this .
Takara , this is good . Can you be on a show ? Can you be on a guest on our show every week ?
Because you someone from the caucus now I knew that was coming next the trademark application smart person for that balcom corp and I was like I'm about to make multiple uh carousels for instagram reels on reels on reels on reels yeah , so they actually abandoned that trademark application , um so shortly after that . That's pretty cool .
Yeah , so that , yeah , so that was a fun time . That was a fun time . Oh my goodness , but yeah , but again , yes , totally . Juneteenth has been co-opted because everybody is just like one person said , they're celebrating freedom for all people . I was like no ma'am , no Sam , you will not , you celebrate freedom for everybody . That's July 4th .
Get out of here , yeah .
I know right , like that's next month . I know Gosh Amazon should have a sale .
Is it really ? Amazon should have a sale on Juneteenth , though .
Indeed they should .
They should . Indeed Well you put it out there now , yeah .
Here's what I feel like you know . If what I feel like you know , if I could just not have to pay taxes for a couple years , like 40 years you don't want to give me 40 acres . Let me not have to pay taxes for 40 years .
What do y'all think Y'all ? Should text us what do y'all think ? Public the ones that are listening , that'd be great .
There you go , reparations alternative yeah .
Reparations alternative no taxes .
I take that yeah yeah , I mean because I you know what I
¶ Non-Compete Clauses for Contractors
thought of . I was researching there's , uh , because I was wondering , like who's the first black person to get a patent ? And there was a black woman named annie poro . Annie poro was the millionaire before madame cj walker , but she has not received the recognition . And she did it with a hair pomade and stuff like that .
And so , uh , she filed a patent back then , but she ended up losing a lot of her assets because she was taxed . I'm like , wait a minute , she wasn't able to vote in 1920 . Y'all were still taxing her . That's taxation without representation I just thought that was messed up .
Wasn't that the reason for 4th of July ?
Yeah , that was 17th . That was for the Tea Party , boston Tea Party . Yeah , that was 17 , that was the .
that was for the another reason for the july tea party boston tea party this is the whole reason , right , that they fought and won on the 4th of july that's the whole issue of washington .
That's the whole issue of washington dc .
Right now , yeah , but , but yeah but anyway , we could talk about that on another episode . You gotta definitely have me back . We can have a whole conversation about that oh , I do have a question though .
Yeah , non-competes with independent contractors . So , yeah , me and renee , we work as independent contractors , right ? So we're not employees , um , but we work . You know , we do independent contracting at a non-profit hospital , some non-profit hospitals . So can you put a non ? Like my contract one of my contracts says that it's basically a non-compete .
Like my contract , one of my contracts says that it's basically a non-compete in there what does it say ?
you got a non-compete in your contract ? Yes , it does .
We can't say it on the show , but there is a non-compete .
There's a non-compete .
One of them is the aeronautical miles . One right no , but that's when you were listen in the in one of the independent contracts that I have right now . There's a non-compete in there , right , um , mainly because I think they were concerned about going in between trauma centers in between and so forth . But how does that work with folks who are not employees ?
How does that work ?
right now , the general rule . The general rule is that non-compete clauses in independent contracting agreements are illegal . They're unenforceable . That's the general and so I know that's in there , but I would be really surprised , absent some extenuating circumstances , that that would even be legally valid . Again , I'm not giving legal advice , that's just .
My legal spidey senses are tingling . Like this is wrong , like that's what's happening .
Get my bat let me get my bat , but I don't even understand how you have a non-compete club . That's a contract .
I didn't see , because I definitely would have been like they put it in there all the time . And the thing about it is sometimes , again , if people don't know any better , they will sign it and they think that it's completely and totally bad .
The whole point of it in the , the whole point of being an independent contractor , that you should be independent and you should be able to contract with whoever you want to contract Right . Whether you're an LLC or a sole proprietor , you have your own corporation , and so someone trying to inhibit or restrict your ability to make money .
That really flies in the face of being an independent contractor .
Right Further . The danger is Like , for example , like I think about , like vendors with like Apple , like I'm sure not everybody who works , everybody who Apple works with , is an employee .
Would a vendor have to sign , but that would be like a restrictive covenant .
¶ Contractual Restrictions and Intellectual Property
Yes , Okay . So what's the difference between a non-compete and a restrictive covenant Like an ?
exclusivity clause . Is that the same also ?
Exactly so it's in there . It's basically a contractual clause that limits , restricts , prohibits or prevents somebody from doing something that they normally would be able to do . Right , and because it is a contractual provision , that is something that it's not a non-compete it is . Hey , I agree to this contractual clause .
So sometimes , though , they are valid and enforceable , but someone saying , hey , you , as an independent contractor , can't do this , or X , Y , z , 1 , 2 , 3 . The danger is that you could be reclassified as an employee and then they have to pay all these bad taxes that they've been avoiding , because , as an independent contractor , you have to pay your own taxes .
You know , correct , right , because , as an independent contractor , you have to pay your own taxes .
Correct Because I was going to ask you to talk about the financial implications of that . If the contract looks like well . Yeah , you wrote independent contractor , but you were not actually operating as one no-transcript , and so that's what that's .
You know the curiosity that I have about something like that , where I'm like OK , you have someone who's operating as an independent contractor , you don't want to pay taxes , you know when you have an employee , but you want to also restrict them from being able to provide services to third parties it gives the .
When you sign a type of restrictive covenant Well , in particular when you sign a not heed , especially one that's like enforceable you are really relinquishing a lot of rights , and so people just throw these things in certain types of contracts . So just because it's there , it doesn't mean that the contract is enforceable .
The other thing is that people should look for in contracts is something called severability , and severability let me make sure I'm saying this right because I'm 99% sure Is that like ?
basically how to get out of a contract .
Well , severability is a clause . I was like I'm making sure I'm saying this right how to get out of a contract . Well , severability is a clause . I was like I'm making sure I'm saying this right .
It's a provision in a contract that basically says if there's a portion of the contract that is unenforceable or illegal , it still protects the overall purpose of the contract . Back in the day , if one thing was wrong in the contract , they would throw the whole thing out . The whole .
Thing yeah .
So if you don't have that clause in there , potentially what you would be able to argue is that , hey , we never had a legally enforceable agreement in the first place . Right , even if you did put these , but then there's just levels to it because , especially you know , depending upon you know , employment agreements and things of that nature .
But but it's people are playing a dangerous game when they are trying to restrict independent contractors from being able to perform services for other folks . So I would definitely , unless I said there's some sort of industry exception which I'm not aware of , it's probably .
If someone finds themselves in that situation and there's no exception , then it's probably not even legally valid , even if it is in a contract for an independent contractor . But again , it's always good to chat with an attorney just to be sure . Yeah , because it will vary state by state , industry by industry .
And I think that that kind of underscores the whole point . I think with doctors , like we're so used to not taking risks , that you know , and we're so used to , just you know following the rules .
Following the rules .
And there's no . If you question , then you'll be looked upon as someone who's ungrateful for your position , someone who is taking a chance , and you know , in essence , people won't trust you , so to speak . So you kind of take that , that mentality with you when it's time for look , to look for a job .
I believe and I think a lot of times people like you said they get the PDF and they're like , well , this is the contract and that's it .
There's really no , I can't negotiate why ?
would I negotiate Like they give me and I go and I do what I do and I get the money and go from there .
In one of my contracts the excuse me , in one of my contracts , the not only was there a non-compete in there , but there was also wording in there that said that if I did any type of work outside of the hospital and I got any money from it , oh , yeah , yeah . The hospital can get or can claim that money also .
We actually had a friend that that happened to , yeah , and the hospital did take that money . Yeah , Now whether or not it was enforceable .
It was there .
It was there , so like for example , like if I decided , like if I'm working my job , let's say like my job , I work that first job , I work two weeks out of the month , and let's say the other two weeks I want to work at another hospital or a flower shop that's in California and the other places in Florida , right , like if they found got wind that I was
working at that hospital in California . According to that contract , everything that I made , they had some ability to claim some of that monies .
Not some of it all of it .
All of it , yeah , which is crazy , but we got that taken out . But it was just like man , like they'll put anything in there .
Yeah , because people don't read . It may not even be legal . People don't like to read anymore . They'll watch 15 second videos you don't have to accept what's given to you .
Right and everything . Everything is negotiable . You should get it read by someone who's who's an expert it doesn't hurt , just to get a consultation for them to look at it and just say , yo , this is legit , this is not legit . You should get this taken out , but just willy nilly taking and signing it . That can be a problem .
And I know what we were discussing was a friend or a colleague of yours . They were getting money from you know another business venture or maybe another hospital , and they came and they took the money .
So what I have seen with some employment contracts is there's this document not document doctrine called respondeat superioris , Latin , and it means like the master owns it , or the master owns it all , and so essentially essentially the argument is if you created something and generally on company time then it's intellectual property that belongs to the company , but I've
seen it a
lot exactly with research white a lot oh my gosh all that yes you know , I thought I wanted to be a doctor .
I have a biology degree and I did research on genetically modified tomatoes trying to translate proteins . Anyway , it was a long story short . But I was like , oh , like , this is not for me . Like I was like I thought , I thought I wanted to do this , but no , anyway . But that's how I discovered intellectual property .
But I realized that you know some of the there . When they were creating these genetically modified organisms , they did patents , but the patents belong to the university . Right , we created the environment for you to be able to thrive and actually create this invention , so therefore we own it .
And so that same rationale is applied , even if you're working in some places where , if you do something in off time , sometimes they will try to even reach their hand into your pocket in your off hours , in your weekend hours , saying , well , because you were taught this or you gained these skills here , then , um , we own that too .
It's almost like analogous to the 360 contracts that they're now making .
Yeah , right , they're getting screwed .
Yeah , right , yeah they're always getting jacked up , but now , when people start realizing like wait a minute from this show , you could go and do this thing , and now you're in music and art , they'll try to get a piece of every little thing that you do yeah , yeah , it's like you go on , you get .
They take money from your , from the actual recording . Then if you go on tour to get your money right , yep , you have merch , they get your money .
T-shirts t-shirts youtube everything that has a tentacle that leads back to that one thing yeah , is all of a sudden theirs . And so in this case , um this , this particular doctor she was , she was .
It wasn't actually hospital work , it was actually kind of like , kind of like promoting she was promoting her brand yeah , she's promoting her brand that she's a doctor and her her specific specialty . She was speaking on stages . I think at one point she even went to like Essence Fest or something like that , like these are the things that she was doing .
She was not trained by that particular hospital .
She was visible and making money .
Right , she wasn't trained by that particular hospital . With any knowledge that she gained , she acquired , that she paid for at whatever university trained her to be a doctor .
So she definitely , so they definitely came for the money .
They came and took the money .
They left her account yeah .
Oh my gosh .
They came and took the money . Yeah , horrible , but I'm sure , but I'm sure if a lawyer was looking at this they would say why , like ? I'm sure , if , like , let's say , she came to you or came to a lawyer , would a lawyer say that first lawyer should have caught this in the beginning . Is this something you would say don't sign this .
Well , it would be one . I'm so curious about what was in her contract . They gave them the right to be able to say , wow , because of what you're doing and how you've monetized your personal brand , we own it . I'm like gosh , like that's profiting off of her meal , like her name , image and like .
So I'm curious about the contractual terms that will go into that and very interested to see if that's what the evolution is becoming now , because us , as professionals , are leveraging social media to build our personal brand and to market and so it's people in from a marketing funnel perspective , and so I'm wondering that one .
Was the attorney who drafted that agreement so smart and had the foresight to throw that in meeting the attorney that represented the company the company right ? Because at the end of the day , they have access to lawyers who are not there to help you . Hr ain't there to help you either .
You know they are there to protect the interest of their client , which is the hospital , the medical provider , et cetera , and not you , and so it's always good to have someone who's an advocate for you in your corner and to make sure that you know , because I'm thinking well , what if you want to write a book ? What if you want to do some other things ?
Then it's like the stakes are high . Yeah , absolutely the stakes are high . It's a different age . I think a lot of doctors now , particularly like the Gen Z , the millennials , the wise , whatever they call them now , like they're very in tune with their lifestyle .
So being attached to a hospital and making their name just attached to patient care , I think a lot of them are like I'm not with that for like at least 30 years .
Like it's got to be a combo of what I do in the hospital , a combo of what I do outside , which can be social media , conferences , books , all these different things you know , you know so here's .
Here's the other piece . The other piece is you know , can a hospital really state that , even though you're not necessarily using their time , you know it's on your off time but if you , for example , work for a prestigious , you know a prestigious hospital system , a prestigious , you know a prestigious hospital system .
And we know that if you work for certain hospital systems , you get a certain amount of clout . So if you say I work for Harvard , right , I always pick on Harvard . So you know , I work for Harvard .
But you're building your brand , and part of your brand is that you want to really convey to your audience that credibility , to really convey to your audience that credibility , that intellectual credibility , and you state I work for Harvard , but whatever else you're doing has literally nothing else to do with that university or that hospital system .
Can they come after you at that point and say , or at least can they have a valid argument ?
Yeah , like , let's say , renee had a big YouTube channel . She's like hi , I'm Dr Renee Voni , harvard trained physician , blah blah , blah , blah , blah blah , and I'm here to talk to you about X , y and Z .
No , not even Harvard trained that I currently work .
Currently a Harvard professor in OB-GYN blah , blah , blah , blah , blah , blah .
And she blows up just Can they come for that paper ?
I wouldn't be surprised if that's the argument that they presented to be able to claim her funds . That's what I was thinking . The only reason , or the main reason , that she was able to build such substantial following and to get immediate trust in her community is because she leveraged her affiliation association with her employer .
So that is super scary , um , and and I would . I would because I'm like how did they do that ? But , of course , when I really sit back and think about it . I'm , like they might be able to say , well , underneath the doctrine of responding superior , that means that we even own that aspect of being right .
We should have been able to claim some of that in employment . But for her not saying Potentially right , potentially right If that were the case , they would argue but for you saying that you worked at our institution you would not have , you know , you would not have thrived .
That's the argument .
That's why I said I should go to law school now .
You can go to the law school of Judge Judy . Just keep watching that .
That's my law school right now , absolutely .
Takora , takora , for the folks who listen in and they may want to learn more about you . They may want to work with you . Possibly they may want to contact you . Let them know how they can follow you , get in contact with you . All that please .
Absolutely so .
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I'm on Instagram and probably that's the best place to get my legal content . Takora Davis , my first and last name , you can find me there . It's the verified account . Hopefully you don't find a bot or something like that .
Takora Davis D-T-G .
Underscore .
Underscore Takora Davis right , she gives you bad advice yeah , roll into the office like Ice Cube . Don't take that advice . That's not her .
Exactly , I'm not selling Forex , I'm not trying to do anything crazy like that , okay , okay . So that , or my website creatorslawfirmcom . That's a really great place to connect with me and I'm always super helpful . If I'm not able to help you , I'll tell you that ain't my ministry , but I'm going to help you find somebody who can . Ok .
So if it's not the thing that I do , I'm not going to play a guinea pig with your business or your life .
I will find someone who can help . That's what I'm talking about , thank you . That's an expert who knows her lane . I love it . I love watching you on Instagram . You're just so real , so down to earth and you just tell it like it is .
So we really appreciate you being here and spending this time with us and just , you know , letting our audience know what the best thing potentially for them is to do if they find themselves in a bind .
Absolutely . Thank you guys for having me . I really appreciate it , and this is the power of a viral reel , because that's how y'all found me .
Yes , that is , that is .