Find Your State’s Restrictive Law

by Larry Weiss, MD JD FAAEM

In addition to providing outstanding CME opportunities, the AAEM Scientific Assembly reaffirmed the commitment of attendees to the AAEM Mission. I found it very gratifying to interact with hundreds of emergency physicians who made a commitment to clean up our specialty. Most importantly, many speakers affirmed my belief that we still have a long way to go, as many of the abuses that plague our specialty still exist.

For example, I review many contracts every year especially for graduating residents. Unfortunately, many of these contracts still contain exploitative clauses including onerous restrictive covenants, provisions stripping the physician of due process rights, one-way indemnification clauses, and unfair binding arbitration clauses.

Increasingly, I see clauses that explicitly blame the individual physician for fraudulent claims (i.e.: billings) made in her name. Even though this may comply with federal fraud laws, this should give the individual physician an absolute right to an open-book policy for billings and collections.

Perhaps the two most effective ways in which some contract management groups (CMGs) control physicians are the use of restrictive covenants and denial of due process rights. We already have the tools to fight unfair denial of our due process rights. We have the 14th Amendment to the U.S. Constitution which protects us from state action (i.e.: in hospitals run by states and local government). In private hospitals, our due process rights come from two sources: (1) the JCAHO Accreditation Manual for Hospitals (three specific standards in the Medical Staff chapter), and (2) medical staff bylaws. Therefore, we already have all the tools necessary to fight for our due process rights.

Emergency physicians should also resist unfair restrictive covenants whenever possible. In Louisiana, we unexpectedly received a great deal of support from our state Supreme Court in a recent case. Under the current interpretation of our state’s restrictive covenant law, contract holders may only prevent an employee or independent contractor from going into business to directly compete with the contract holder. Restrictive covenants may no longer prevent an employee or independent contractor from working for a competitor. We may go up the street or down the street and work for anyone. See the March/April issue of Common Sense for a complete discussion of the recent Louisiana Supreme Court decision.

AAEMLa will now lobby our state legislature to prevent proposed amendments of our state’s restrictive covenant law. Business interests have announced their intention of lobbying the legislature to strengthen the restrictive covenant law to circumvent the recent Supreme Court opinion. Our new political action committee, LEMPAC, will join forces with groups supporting the Supreme Court decision. We will lobby to prevent any amendment of the current law. This will protect the rights of emergency physicians to work where we want, and it will protect the rights of our patients to ensure access to emergency care.

Emergency Physicians in other states may also advocate for changes in their restrictive covenant laws. A fundamental right in the U.S. Constitution guarantees us the right to travel anywhere in the country. Closely related to this right is the right to practice one’s trade or profession. Restrictive covenants exist in derogation (i.e.: as an exception) of these fundamental rights. Therefore, legislatures should only write very narrow exceptions to the right to live and work where we please. Also, courts should interpret these restrictive covenant laws as narrowly as possible.

Find your state’s restrictive covenant law and speak with an attorney who specializes in employment law. If your state broadly allows restrictive covenants, this will provide you with a powerful lobbying issue. By removing restrictive covenants from most contracts, we may decrease the ability of some contract holders to exploit emergency physicians. Getting rid of restrictive covenants and clauses stripping us of our due process rights will go a long way toward protecting emergency physicians from exploitation and ultimately protecting the rights of our patients.

Dr. Larry Weiss is the President of AAEMLa and can be reached at ldweiss@cox.net

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