Page 29 - Bulletin Vol 28 No 2 - May - Aug. 2023 FINAL

Legal Article |New Laws About Non-Competes (Con’t.)

not uncommon for a dentist to wish to hire a dentist who is under a contractual restriction, and if that
dentist doesn’t disclose a contractual restriction, or if they do disclose a new hire, regardless, you may be
subject to litigation by the prior employer for tortuously interfering with the contractual protection they
have in place. Being subject, or a party to such a lawsuit can be costly it requires involving an attorney,
incurring legal fees, and potentially being liable for lost profits to the prior employer if they are successful

on their claim.
Part of the argument in favor of restriction non-competition provisions related to employment is that as an
employer, you are paying the employee fair value for services rendered, and perhaps not consideration in
addition to an appropriate amount for services as additional consideration for a restriction outside of

employment, or one surviving outside of the term of employment. This thought process has given rise to
legislative required “garden leave”, which is when an employer pays severance in exchange for a non-
compete post-termination. Here, severance serves to compensate the individual for remaining out of the
workforce and out of competition from the prior employer.

it is important to differentiate a restriction on non-competes from employment or independent contractor
arrangements as opposed to an asset purchase or stock purchase arrangement where you may buy or sell
your dental practice. Legislative restrictions at the federal and state level under discussion would not
Impact non-competition provisions related to a sale. Meaning, when fair value is paid for a non-compete
restriction in an arms-length negotiation for the purchase or sale of a practice, the restriction may be valid
and enforceable, as part of the consideration to the transaction for sale.

Regardless of whether the non-competition restriction is signed into law in New York, the recent buzz is a
needed reminder for most employers to confirm the contractual protections utilized in their existing
employment/1099 agreements. It is imperative contractual language protecting one of your most

valuable assets (your practice) is (i) expansive enough to protect your legitimate business interests, and (ii)
enforceable, with properly drafted remedies for breach, if challenged in court. For those who have not had
their agreements reviewed in the past year or so, it may be time for a check-up. For an assessment of
your current contractual protections, email Taryn Crimi at TCrimi@Kirschenbaumesq.com.

*https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-proposes-rule-ban-noncompete-clauses-which-hurt-
workers-harm-competition

Jennifer Kirschenbaum, Esq. serves as corporate counsel to the Nassau County Dental Society, in
addition to her role as General Counsel to many practices in our dental community. Jennifer and
the K&K Team serve to assist in hiring/firing, employment matters, corporate matters, buy/sell,
real estate, dispute resolution, partnership disputes and general operating matters for dentists
and other healthcare professionals. Have a question for Jennifer? Email her directly at:
Jennifer@Kirschenbaumesq.com or call: 516-747-6700 x. 302.

Nassau County Dental Society ⬧ (516) 227-1112 | 29