This week on the podcast…
This week on the Uncharted Podcast, Dr. Andy Roark and practice management geek Stephanie Goss are in the mailbag with a question that might just light this episode on fire. An associate vet who is thinking ahead to owning their own practice is asking if they are nuts for considering throwing away the non-compete option someday as a practice owner. Especially when they view it in light of their own personal experience trying to separate from a toxic practice they found themselves in! Andy and Stephanie have some fairly strong opinions on this one so hang on folks, let's get into this…
You can also listen to the episode on Apple Podcasts, Spotify, Google Podcasts, Amazon Music or wherever you get your podcasts.
Submit your questions here: unchartedvet.com/mailbag
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Episode Transcript
Stephanie Goss:
Hey, everybody, I am Stephanie Goss and this is another episode of the Uncharted Podcast. This week we're diving into the mail bag, but we're picking out a letter. This one was kind of handpicked because I had a wonderful time talking about this exact topic with some of my peers last week at our Uncharted April Veterinary conference. So we're recording this, this isn't coming out until the end of May, but I was having this conversation about non-competes and feeling pretty fiery about it and lo and behold, there was something in the queue from the mail bag from an associate vet who is asking the question, “Am I kind of on planet crazy to consider one day, when I own my own practice, not having non-compete be a thing in that practice?” Andy and I have some strong thoughts on this topic, so let's get into this one, shall we?
Speaker 2:
And now the Uncharted Podcast.
Andrew Roark:
And we are back. It's me, Dr. Andy Roark and Stephanie, a kiss is not a contract, Goss.
Stephanie Goss:
That time you weren't ready.
Andrew Roark:
No, I… Okay. I was like, “Yeah, no, we're going.” And then I didn't. I double took. Yeah, A Kiss is Not a Contract actually is a song by Flight of the Conchords who I love.
Stephanie Goss:
I've not heard from those guys in a hot minute.
Andrew Roark:
Oh no. I still listen to the classics. Business time, still makes me just laugh.
Stephanie Goss:
Oh man.
Andrew Roark:
Oh man, I celebrate their collection. Oh boy.
Stephanie Goss:
How's it going?
Andrew Roark:
Oh man, it's good. It's good. It's raining here and so I've got a rowdy doodle that-
Stephanie Goss:
Wants to go out.
Andrew Roark:
That's determined to just make havoc because he can't go out.
Stephanie Goss:
Yes.
Andrew Roark:
So yeah, he woke up-
Stephanie Goss:
Shockingly it is also raining in Washington.
Andrew Roark:
Oh wow. Yeah. Oh, well, works out sometimes.
Stephanie Goss:
Because it's always raining here.
Andrew Roark:
Yeah, no. It's been beautiful.
Stephanie Goss:
Yeah.
Andrew Roark:
We're getting into the summertime in South Carolina at this point when it's coming out and boy, it's beautiful here, but it's nice to get a little bit of rain.
Stephanie Goss:
Yeah. Well, I am excited. I picked this one out of the mail bag. You guys have been doing a great job of sending in questions because there's quite the little queue built up in there, but I was having some conversation… Our Uncharted April event, when we're recording this, you and I just finished that last week and we're having some conversation about this topic and when I saw this mailbag question, I was like, “Ooh, let's do that one,” because I'm still super, super excited about it. So we got an email from someone who is currently an associate vet, but who is wanting to become a practice owner. And so they had quite a toxic environment that they were working in and quit their practice and the resulting interactions between themselves and the practice owner as they were exiting that practice left them thinking ahead to what they don't want to do one day when they're a practice owner.
And so their specific questions have to do with employment contracts and non-competes. So they were saying, “I find non-competes to be a little bit outdated, especially since I live in a pretty dense urban area. The non-solicitation piece I totally get, but who am I to begrudge an employee if they can find a better opportunity elsewhere? And with clients, there are so many of them that I really feel like, in an urban setting, “Does this really matter?”” And they were asking, “When I'm thinking ahead as a practice owner, am I crazy for thinking about disregarding non-competes from my contracts? What are your guys' takes on non-competes?” And I just was like, “Oh yeah, let's talk about this one.”
Andrew Roark:
Yeah, I think this is good. I think non-competes are an area where there are some significant changes that are taking place.
Stephanie Goss:
Yes.
Andrew Roark:
It is a big deal. I was talking to my friend, Dr. Lance Roasa, who's a veterinarian and also a lawyer, and he helps veterinarians with contracts. He's an awesome guy. I've interviewed him a couple times on the Cone of Shame podcast and this was something that he really teed off on as far as a hot area where change is really happening. So I think that that's really cool. So I'm happy to talk about this and where I think it's going and where it seems to be going. And then also I think we could talk in a little bit broader context about contracts in general. I think that that's a fun conversation.
Stephanie Goss:
Sure. Okay. I'm up for it. Like I said, we were having some soapboxy kind of conversation about this last week, so I'm excited. I'm here for it.
Andrew Roark:
Yeah. So before we start talking about non-competes, we need to talk about what the importance of the contract is. And I think a lot of people hand wave over this and they say, “Well, you get a contract. That's just what you do.” And I think there's a couple things about contracts that people maybe don't really think about or don't really understand. And so I will share with you through a school of hard knocks a couple things I have learned about contracts. I am a big believer in the idea that a contract is probably only worth the reputation of the two people who sign it. I really am. I think a lot of people, because they want to believe they have control in this world, believe that they're going to get a contract and that is what will be, and what is written in that contract is chiseled in stone.
And I can tell you, having navigated more of the legal system than I ever wanted to, that's not true. And I wish that it was, but it's not. You say, “Well, this is written down. How could that not be held accountable?” The two things that I would say to people is some people just flat out lie. You could say, “Well, they didn't do this.” And they'd say, “Yes, I did.” And you're like, “No, you didn't.” And unless you can prove that they did not do something, they can say that they did. And it is wildly frustrating, but there's nothing you can do about it. And I think that happens a lot. And they can also make up things and say that you did them. Unless you can prove that you didn't do the made up things that they said, they can muddy the waters.
Oh boy, that's a story for another day. But anyway, it is just a truth about our legal system is I always naively just kind of assume that people would be honest and what was written down would be enforced. And I can tell you, having played the game for a little bit, it ain't that way. The other thing is that enforcing contracts is really expensive. I mean, it is really expensive. Because you're hiring a lawyer at hundreds of dollars an hour to wade into trying to enforce this contract. And if you are going up against, especially a big company, one of my friends, as he put it, was, “Andy, you're fighting a grizzly bear with a pocket knife and it's not going to end well.”
Stephanie Goss:
That's a good analogy.
Andrew Roark:
It's a good analogy. You go, “Oh, I'm going to go up against the legal department of this massive corporation with my buddy Earl, the local attorney. This is going to go well.” Nope, nope. So anyway, those are hard lessons about contracts that I have learned, and I should have given a trigger warning before I laid that down because some people just really don't want to hear that, I'll just tell you that. That's the American legal system in a lot of ways. And I can't speak to the Canadian legal system, but that's it. I will also say, just as we talk about contracts, that suing people is a terrible, horrible experience that you really, really, really want to avoid. You want to avoid suing people as much as you want to avoid being sued. The whole thing is awful. And so when you start thinking about contracts, start thinking about, “What does this really mean and what is really going to be enforceable? And what am I actually going to do if this person violates these things? What are we going to actually do?”
And I'll save you a lot of turmoil that I went through over the years but the ultimate outcome is it's all relationships. It's all relationships and clear expectations. And so I'm not saying I don't use contracts, of course I do, but I think have a pretty healthy view of them, which is, I really don't want to use this. I think the big things that I want here are clear expectations about what I expect and what you can expect from me, and that is the most valuable part of the contract. And then just a focus on a relationship, which means I want to be a good, trustworthy, honest person and I want you to be a good, trustworthy, honest person. And we're going to communicate as we go along as if we didn't have a contract and we just had to work it out on good faith. And that's my best advice on contracts. And so as I start to lay that out and say, “This is what I've learned about contracts,” you can already probably see where I'm starting to go as far as non-competes and things like that.
Stephanie Goss:
Yes. And the other thing that I would add is I think it's funny, I remember really fairly early on in my career as a manager, I remember being asked to sign a contract. And I remember talking about it with my colleagues. And at the time, managers didn't have contracts, it was just doctors and everybody thought I was crazy. But I'll tell you the secret from a headspace perspective, because I think you're spot on, Andy. And for me, maybe I was just young enough and dumb enough and naive enough to not be worried about the legal perspective of it. And what I mean by that is I understood the gravity and I understood, “This is a legally binding document and I'm signing the thing.” I got all of that. And to your point, for me it was about spelling out the plan, spelling out the expectations on both sides.
And I was looking at it from a headspace perspective of, “Am I going to feel good going to sleep at night if I live up to the terms that I'm agreeing to? And on the flip side of that, if the other person in this relationship or persons in this relationship don't live up to their side of the bargain…?” I had a mentor explain it to me, and this was the light bulb moment, they were like, “You should have no qualms about walking away if you've lived up to your side of the bargain and they don't.” That's how I sleep easy at night. And that was really from a headspace perspective was the light bulb for me because it shifted my mindset when it came to the contract into the space that I think you're talking about, Andy, which is, “What's the point? What's the why behind it?”
Well, for me, on a personal level, I'm a big advocate for it, even for our team members, which a lot of managers look at me like I've completely lost my mind when I bring that up. But it's about clear expectations. It's about knowing what I want, what I can expect on both sides, and what my employer, in this case, generally can expect from me as an employee and what I can expect to receive from them.
Andrew Roark:
It should be a two-way document like that. That is the why of the contract for me. Now, additional point I want to add, as you say that, it is amazing to me how many people sign contracts without reading them.
Stephanie Goss:
Oh my gosh, yes.
Andrew Roark:
That's bonkers.
Stephanie Goss:
That's frightening.
Andrew Roark:
And I have seen it so many times and in big companies, I've been like, “You guys signed this thing, you signed this?” And don't be that person. Do not be that person. When you ask Andy Roark for advice and I look at it and go, “You signed this?” It's important, it's important if you're going to sign it… Especially if you're going to sign something that someone else wrote, you better really just read it and know what's in it.
Stephanie Goss:
Yes.
Andrew Roark:
And so that's the other part. The last thing I'll say about contracts, and this is sort of where I came to in my career a while back with contracts. And so this is what I aspire to, and I think that our writer will probably like this. I've talked on the podcast a number of times about Rawls' Veil of Ignorance and Rawls' Veil of Ignorance is this sort of mental exercise where you look at a system and you say, “If I was dropped into a different chair at the table than the one I'm at now, would I be okay with that? Would I feel like the arrangement was fair?” I'm not saying, “Would I be happy necessarily but would I feel like it was fair?” And that's Rawls' Veil of Ignorance. So I run Uncharted and we hire presenters and speakers and I have worked as a presenter and speaker for years and years, like 15 years now I've done this.
And it's interesting to be on the other side of the table because I'm looking at the event part and saying, “Boy, we got to pay the hotel and we got catering, all these things and blah, blah, blah.” And it has always been important to me to put forward a contract that I would think was fair if I was a speaker. That doesn't mean I would take it. I might say, “This is not enough money for me,” or blah blah, blah, blah, but I would feel that it was fair and I would not feel that it was a manipulative contract or it was trying to take more than what I thought was a fair agreement. And so I really tried to work it backwards and forwards to say, “Do I feel good about this as a person writing the contract? Would I feel that this was fair if I was signing the contract?”
And again, this is sort of a philosophical point, but I really think that that's what we should aspire to. I think that's part of being a good, honest, ethical person and a good employer is to say, “I want an agreement that works for me and I believe it's going to work for them and we can talk back and forth about it, but for the most part, I want this to be something that if I was on the other side, I would say, “Okay, I understand why you're asking for what you're asking for.” And we can decide whether it's 14 days of vacation or 10 or 20, but the basic idea being, “Okay, there's a limited amount of vacation and it's clearly stated and I'm on board with that.”
Stephanie Goss:
Yeah, I'm so glad you brought up the point about the fairness and looking at it from through Rawls' Veil of Ignorance, but also the perspective of, “Did you read this because I really can't believe you signed this?” From a headspace perspective, that's really important to me because if you read it and it seems incredulous, you should probably ask. You know what I mean? You should listen to the Spidey senses. And I speak not so much from personal experience, but I've had multiple conversations with young veterinarians and I know, Lance, having worked with as many vets as he has over the years, has heard this time and time again. To your point, people can ask for whatever they want. So as a practice owner, there's nothing to stop me from throwing out a contract that says you have to give me 12 months notice as a veterinarian because maybe in a perfect world, that's what I would want.
On the flip side of that, that's where I would be like from a headspace perspective, “Oh buddy, if you don't read that and you don't look at that and go, “I'm not signing this,” I'm giving you permission, look at that and say, “I'm not signing this,” because that's nuts.” That's where from a headspace perspective, we have to think about it from the perspective of a relationship. And sometimes relationships work great and everything works out really well and sometimes they don't. And so not to assume bad intent because we want to assume good intent, and so when we're framing it on both sides, we should think about it through the lens of good intent. And we should also think about it from the lens of, “This is a relationship and what happens if it doesn't work out? What does that look like?”
And it amazes me how often… And unfortunately this veterinarian who wrote into us found themselves in that predicament where they were trying to get out of their contract and they then went back and read their contract and sure enough, there was a clause in there that bit them in the butt in a big way. And they were like, “Well, never going to do that again,” which is where this came from. And it never ceases to amaze me how often I see that being the case for veterinarians and it makes me really sad.
Andrew Roark:
Well, the notice of leave part is one of the three big bugaboos that I see in contracts with veterinarians, and it's a really wonderful example of that Rawls' Veil Of Ignorance. And I say this because I talk to friends who are practice owners and they say, “Well, if you tell me you're leaving, Associate Vet Andy, it's going to take me four months to get another doctor given the hiring climate right now. And so I need you to give me four to six months notice so that I can find another veterinarian and my business is not damaged and I don't have to worry about having to lay off support staff because we don't have enough doctors,” and blah blah. And they have a very reasonable case from their side of the table on why they would like six months of notice.
And that's why the Rawls' Veil is really good because I said, “All right, clear your mind for a second. Now you come sit on my side of the table and you're an associate vet who's unhappy here or whose spouse is trying to leave. Are you going to stick around for six months after realizing that you need to go? Would you be willing to live apart from your spouse because they got a new job and you have to live alone for six months and pay two rents or a rent and a mortgage? Come on.” That's ridiculous if you put yourself on the other side of the table. And again, I'm not trying to vilify the owners, I understand exactly why they feel the way they do, but part of a good contract is to say, “I see this. Surely the associate vet recognizes, hopefully they recognize, why I need some runway. I need to know a bit ahead of time.”
And I don't know if people understand or not, I mean I hope that they do. So there is a reasonable amount of time to say, “Hey, go find yourself another vet and I want to give you some time and support you while you do that. And at the same time, I need to be free to go on and live my life after I decide that I need to go somewhere else.” And that seems very reasonable as well. So that's a big one. And again, I've seen so many doctors that when they recognize how much notice they're supposed to give is when they decided to leave and they're like, “Oh, 90 days? I'm supposed to do 90 days?” I'm like, “Yeah, that's what you agreed to.” So there's that. The other two areas I always throw out when I say to people, “You didn't read your contract?” The non-competes are a big one.
And I feel like the vet schools have done a good job where there's been a lot of business education in vet schools in a way there did not used to be. So I feel like this is less common, but boy, I remember 10, 12, 15 years ago, there were a lot of doctors who looked around and they were like, “I'm not happy here. I'm going to go work across the street.” And they looked down and it was like, “Oh no, I signed a 30 mile. I am not able to work in this town. My 30 miles runs out in the farmland outside of town, which means basically I have to leave town because it didn't work at this practice.” And I go, “Oh boy, that's a big one.”
The last one is negative accrual, which is again, it was phrased in a way that people didn't really recognize what it meant. And so what happened was the doctors would say, “Oh, I get paid on production, that's great. Let's go.” And what they didn't realize is that if they didn't hit their production numbers, they had to give back the amount… Oh, not really. But the amount that they came up short would be held against them as opposed to resetting and letting them try again next month. And so they would come in as a new graduate into a new system and they wouldn't have cases lined up and they wouldn't come anywhere close to hitting their assigned number.
And then they're so deep in the hole that when they are a good productive veterinarian, they're still buried underneath the deficit they had when they weren't fast and they weren't seeing cases. And again, I also understand from the practice owner's standpoint, when they say, “Well, I'm supposed to pay this person and if they're not generating revenue, then I shouldn't have to pay.” I'm like, “I get it kind of,” but also put yourself in the position of the doctor and you go, “This is not going to fly.”
Stephanie Goss:
It's funny because I can absolutely see both sides on all three of those points. The non-compete, the negative accrual, the leave, I can see arguments on both sides like you laid out. And so for me now where I'm at in my career, I look at it and I think for a lot of practices, particularly I would say that the reasoning behind it is different I think in corporate practice structure often from private practice structure, but ultimately I feel like there's a root of commonality between the two. And that is, “We don't like conflict.” And really for a lot of people, the contract serves to avoid communicating about those hard things. And so the negative accrual often is one of those things. And it's funny because I worked in a practice that paid their doctors solely on production, private practice, and we had negative accrual and I didn't think twice about it for a really, really long time.
And then I had an associate who was on the other side of the table and was asking some really great questions that really made me think about it. And what I realized is that that is a perfect illustration for we choose to have the contracts because we're afraid of the communication that has to come once someone isn't doing the thing that they're supposed to be doing, right? They're not upholding their end of the bargain. And from a headspace perspective, I think it helps get us into the place where we can assume good intent on both sides because if we look at it through the lens of, “Oh, we might be trying to have this document that will help us avoid some of this conflict,” it becomes easier to I think assume that good intent. And what I would say is, as leaders, whether you're a manager, practice owner or director, it's bullshit. You have to communicate.
So now my point of view has changed radically. I don't want to have to have a contract that has a non-compete or has a negative accrual because realistically, I really truly believe I'm not doing my job as a manager if I can't have the hard conversation with an associate, whether they're a new grad or a tenured doctor like yourself who's been practicing for years. If there's a change in your production level over time and you're not producing to pay yourself, that's a conversation that I should be able to have. I shouldn't have to say, “Your contract says this is what you're going to do, so this is the lever that I'm going to pull to get you to do what I want.” I should be able to take accountability for that and I should be able to have that hard conversation.
Andrew Roark:
Well, I love that you say that. It is amazing how many policies and contractual pieces are put into place to avoid having to actually manage people. And there's this fairytale of, “If you set it up the right way, you don't have to manage people.” That's the whole pro-sol mentality for doctors is, “We pay them, they have a base salary and then we pay them on production, and then that way they're going to work hard and they're going to work up cases and I don't have to talk to them about their medical skills and what they're recommending in the rooms because it all takes care of itself. And I guess-“
Stephanie Goss:
“Because if they want to get paid, they're going to do the things that I want them to do.”
Andrew Roark:
Exactly. And you go, “That is not true. You still have to manage those people,” but it's amazing how much that's set up to be that way. One of the things I want to say about contracts, and you propped this into my mind, one of the absolute critical things to remember with contracts is there is no right or wrong here. A lot of people are like, “Okay, Andy, tell me what to ask for my contract and I'll go and get it. So negative accrual, out. Six months of notice, out, blah, blah.” The truth is none of those things are chiseled in stone. My thing is not to say to you, “Don't take a negative accrual contract.” It's not. It's to say, “You need to understand what the deal is and then you need to decide what is right for you and your family.”
I don't think my employer would mind me saying this at the vet clinic, but I work on a straight production at the vet clinic where I work and I love it and I do not expect any sort of a base salary or anything like that because I have great schedule flexibility and I travel and I do lots of other things. And the deal with them was, “Hey, let me come and work and I'll have sort of a flexible schedule, but I want to be here. I want to see cases and then we'll do a production deal and that's all you have to pay me. And that way if I travel, you're not losing any money,” whatever. It works great for us and for where I am in my career. So I would not knock anybody that. If a vet understands what negative accrual is and says, “I understand why you want this, and so I'm going to agree to it,” I'm fine with that. I really am, as long as everybody's eyes' wide open about what the deal is and why it is.
And I'm trying to think of a reason an employer would want that. Maybe the vet is pushing for a really high base salary and the employer's like, “I don't know that you can make this.” And so they say, “Well, we'll do a negative accrual then.” Maybe that's a compromise that works. And so if so, I don't want people to say, “Oh, she said the words negative accrual and Andy says that's horrible.” It's not. That's not how life works. It really is about your specific relationship and what you get. And so the last part I want to put forward sort of in headspace on contracts is this. And so I want you to hear this because this is really important. If you go into a contract trying to get ahead, you are limiting probably the outcome that you can achieve.
It's like the prisoner's dilemma. So the prisoner's dilemma is this psychology game where we set it up and the game can be a little bit complex, but basically the idea with the prisoner's dilemma is you have two players in this game and the best outcome for you in the short term is to try to screw over the other person. And if you screw over the other person, then you will get the better outcome. However, if both people try to screw each other over, you get the worst outcome. And so in the short term, the best thing is for you to screw the other person over and then not to screw you over. If you play the game multiple times in an ongoing way, you very quickly realize that the best possible outcome is collaboration. Don't screw them over and they don't screw you over and we get the second-best outcome again and again and again and again and again and again. Otherwise, you'll screw them one time and then they'll try to screw you and then you both end up screwing each other and you get the worst outcome again and again and again.
And I see contracts like that. So I hope that's not too far of a stretch, but basically the idea is if you go into it going, “Aha, I'm going to stick this associate vet I'm hiring,” or you're the associate vet and you're like, “I'm going to ask for this ridiculous thing and force it…” Like, “I'm going to ask for a salary that's way beyond what I can actually earn or justify and I'm going to use hardball tactics, I'm going to get it,” you might get it, but you're going to have a short tenure at that practice and it's not going to be fun and you're going to feel less than and you're going to have to sit to a lot of conversations about how you're not producing what your salary warrants and then ultimately you're going to leave and that's going to be how it's going to go.
And you're probably not going to be super popular when you go. And I say that to both sides. I really believe going into contracts, the best thing is to treat this like a relationship. It really is. “These are my needs, these are your needs. I want you to understand where I'm coming from and why I'm coming from here. I want to understand where you're coming from, what's important to you. Let's make this thing in a way that we both get what we need and then let's continue to communicate on an ongoing basis to make those adjustments.” And that is the strategy I think for having a healthy, happy employment.
Stephanie Goss:
Yeah, I love it. How do you feel about taking a break here?
Andrew Roark:
Yeah, let's take a break.
Stephanie Goss:
Hey, friends, I just wanted to talk for a quick second about the maths with you all because I've been thinking a lot about the workshops and normally here's where we tell you what's coming up and we've got some great stuff happening so you're going to want to head to unchartedvet.com/events and check out the upcoming calendar but I want to talk about maths because if you are not already an Uncharted member, you can attend any one of our workshops and pay $99 a piece. Most of them are just $99. You can do it as a one-off, great and fine. However, that adds up really quick. And if you do the monthly workshop with us, and I've seen some of you there as repeat customers, which is amazing, but you could spend almost $1,200 over the course of the year doing workshops with us, or you could pay $699 and get a 12-month membership, which means you get all of the workshops that we do at no extra charge.
You also get access to our amazing conversation in the community, our community members, and all of our community resources. And it is hopping over there. We've got conversation 24/7, we have got activities, we've got book club. We're writing our handbooks together in Handbook Helper Group. This year we are talking about development and leadership growth, doing our development pathway this year. We are doing hallway conversations where we're talking about topics. These are sessions that are community led, community driven. It is topics about things that are going on in your practice that you want to talk about with your peers. All of that is happening and it's all included for your $699 membership. So simple m, do you pay almost $1200 for the year or do you pay $699?
If you're not currently a member, you should head over to the website and use this argument to convince your boss. “Hey, boss, I need to be a part of this amazing community because Stephanie told me and because she's telling you that you will save money.” Hopefully that works, but I couldn't resist. I hope to see you at our upcoming workshops. Again unchartedvet.com/events for everything that's coming. And now back to the podcast.
Andrew Roark:
All right, so let's get into the actual question that we were asked.
Stephanie Goss:
Okay.
Andrew Roark:
Which is basically, “I'm thinking about not having a non-compete. I am sensing that there may be a falling out of favor. Am I about to make a really terrible decision decision?”
Stephanie Goss:
Sure.
Andrew Roark:
Exactly. All right, cool. The way I like to look at this is let's look at the non-compete real fast and let's just look at the pros and the cons. So we'll start with that. I think that people in the last… Before we took a break, I said, “We need to be really honest about what do we want and need.” And if you're like, “Hey, negative accrual works for me and I understand why you want it,” then you can do that. I think non-competes can be that way too. The question for me has to be, “Why do you, practice, want me to sign this non-compete? What do you care about?”
And if they say, “Well, I don't want you to work for anybody else in town,” I would say, “Hey, you're going to need to go jump in the lake.” That's ridiculous because I would say, “I'm not interested in signing a contract that's going to make it so that I have to move away if this doesn't work out.” I'm not interested in signing that. If you're thinking about adding a non-compete, what do you care about? And I think most people when they stop and, again Rawls' Veil Of Ignorance, and they put themselves in the position of their doctor, they go, “Okay, my real fear is that they're going to go literally set up a practice across the street,” or, “They're going to get this clientele and they're going to go to our main competitor who we have a Hatfield-McCoy's feud with, and they're going to take our clients and go work there.”
And so that's why people put it forward. The other reason that a lot of businesses put it forward, just to be clear and candid about what's out there, if you're running a practice like you might sell your practice, a lot of the big buyers of practices really like non-competes. They want to have the doctors locked in there in a way that makes it hard for the doctors to leave if the sale goes through. And so what their worry is that the practice gets bought and the doctors all just flee, and now they've bought this practice, they don't have any doctors in it, and so they really like non-competes. And so there is some stability that comes from that, and there's a lot of places that want that. And so just talking about why it happens, I think there are the big reasons. Are there other reasons that you have, Stephanie?
Stephanie Goss:
I could see both of those for sure. The other way I guess that I've seen the non-compete use that makes some valid sense to me is the opening your own practice within a certain radius of the existing practice, because that feels radically different from the seat of the business owner. My associate not being a fit for my practice or being unhappy and going to work at another practice across town feels very different than my associate being mentored by me and my team and then going and opening their own practice right across the street. Those two things feel very different. And so I could totally see something in there from that perspective. But again, when you use Rawls' Veil, is it enough to justify having it in the contract? I don't know.
Andrew Roark:
Yeah, I don't know. Yeah, exactly. A lot of it was-
Stephanie Goss:
But I get wanting to ask for that.
Andrew Roark:
Of course.
Stephanie Goss:
For sure.
Andrew Roark:
And a lot of it is following suit forever. If you were an employer, you put a non-compete in, that's what you did. And so there was great pressure of, “This is how it's done and this is how it works.” So anyway, those are the reasons that I could come up with. “I don't want you to go work for a mega competitor,” “I don't want you to go and start up your own place and take half of our clients away from us. And again, can you accomplish some of that, “Don't take half of our clients away,” with non-solicitation agreements? I think you can to some degree. I really do. And then if you plan to sell the business, a buyer likes to know that doctors are locked in there. It gives them some security. So I get why that happens. What's funny is I start talking about training up a doctor and introducing them to your clients and they grow this clientele and then they leave and they work somewhere else.
You and I did a podcast back in April. It was the April 26th Uncharted. And it was about the technician that got trained and licensed and then left the practice after the practice had paid for licensing. And boy, this feels really similar. It really is that. “I'm investing into this person and putting all of this time and energy into them. And then what if they leave?” And you go, “Okay, I get it.” I think it hits very much on that same scarcity mentality of investing and then having someone go away and we don't like that. So anyway, I'll put this forward as reasons you would have a non-compete. I think the reasons that not have a non-compete, some of it would be, if you do the Rawls' Veil Of Ignorance and say, “I think most of us, we recognize that sometimes things don't work out.”
Someone comes and they work and then it doesn't work and they leave. And I would not feel good with saying to someone, “You have to leave town. You can't work in this town, so sit on your hands for two years.” I think morally I would sort of struggle with that. It doesn't feel like an equitable thing to do. So that's a big part of it. The other thing is that the winds are changing. The law is changing. In human medicine and in the legal profession, non-competes are now done. They're not allowed. And the rationale that was put forward to break that and make those things illegal is we should not have a system where doctors have a relationship with patients and then that patient-doctor relationship gets broken because the doctor has to leave because of a non-compete. We should keep that patient doctor relationship intact. The legal counsel-client relationship, same thing. That should not get broken if that person goes to work on their own or something else.
And so in order to protect those relationships, the non-competes have been struck down. I fully expect that veterinary medicine will probably fall into that same category for those same reasons. And we're already seeing that in a number of different states. There's a lot of pushback on this, right?
Stephanie Goss:
Yeah, it's been interesting to see the transition here in Washington, because they're not enforceable. And so it's been interesting to see the transition, especially working in corporate medicine. And there's often the perception of, “Well, every corporate contract has a non-compete,” and it's not true.
Andrew Roark:
Yes, I think that's important.
Stephanie Goss:
Like you said, we're already seeing it and I would expect that we continue to see it more and more and more. And from this, looking at the pros of why would you not have a non-compete, I think it's a lot healthier in so many ways. And I love the point about human medicine and legal profession because I think there's legitimacy to that. If you have a client or a patient that's particularly bonded to one of your veterinarians and that veterinarian is deeply unhappy or there's circumstances that make them want to leave their practice or they want to open their own practice or whatever it is, mentally, ethically, I guess my personal take is, “Do I really want to get in the way of that?” Leaning into your point about human medicine, if they have a relationship, go with them and I think it goes back to what you said about the scarcity mentality.
I think so many of us are afraid of losing clients, and we think about the one client, but we don't just think about the one client. We can't stop ourselves at the one client. We go from the one client to living in the forest in a cardboard box. We can't. It's just human nature. We can't stop ourselves from catastrophizing that. And so on the practice owner, the practice leader side of it, we go from that, “Well, maybe a few clients or their really loyal clients will follow them.” Well, that should be good. It should be good that they worked in my practice and they built a loyal client base who wants to stay with them because I should look at it from the perspective of, “I shouldn't be in a place where that change should make or break my business.” And I think that scarcity mentality is something that is really hard for a lot of us, myself included. It took me a really long time to get to this place. It's really hard for us to wrap our brains around because it's scary.
Andrew Roark:
Yeah, I agree with that. There's just a couple things that are just sort of absurd in non-competes that I see that people haven't really questioned for a while. Some of it was the distance in the non-competes. Like, look, if somebody's willing to drive 10 miles to see a veterinarian, for God's sakes, let them drive that far. I mean, at that point, you're getting into a relationship that that person really cares a lot about, right? And I have seen that. I've seen people put these huge non-competes out there and you go, “This is ridiculous. No one's going to take your clients at scale at anything beyond a couple of miles.” And then the other part is, and this has always kind of baffled my mind, so here's the thing, you're a veterinarian and you're going in to take a job and you're like, “I've never worked here before and I don't know anybody.”
And they're like, “Here's a one-year contract, sign this non-compete.” And you're like, “How fast do you think I'm going to meet people?” And I get that the idea is introducing it early on but here's the thing too, there's a very good chance that I'm going to come here for one year, it's not going to be a great fit, and that I'm going to leave. We don't like to believe it… I think a huge percentage of relationship, especially with brand new veterinarians, that first year in practice, they're going to leave after a year. Why in the world are you making it so they can't stay in town? It doesn't make any sense. Now, I understand when people are like, “Oh, this person's been here 10 years and they have this huge clientele,” and blah, blah, blah. That feels different. I think there's different reasons there to say, “Well, this person at this point has kind of earned these relationships,” and so on and so forth.
But anyway, that was a thing as a… I remember being a brand new graduate or even not a brand new graduate, but as someone who would move to an area and they're like, “Here's the contract. Also if this doesn't work out, you can't work anywhere near here for two years.” And I'm like, “That's ridiculous. If we get six months into this and it's not working, I shouldn't be blown up for two years. That's not right.” So anyway, I've seen a lot of that stuff.
Stephanie Goss:
And I think on the flip side for a second, you just brought up a really, really good point. So I think there's validity for not having a non-compete. From the perspective of the associate, to your point, if it doesn't work out for me, I should not be restricted for two years from moving on. That is total BS. And this is where it's about, “We don't want to communicate,” coming into play. On the flip side, as a practice owner or practice manager, why, for the love of all that is holy, why would I want to trap an employee into a contract with me where if they are miserable, they might stay just to live out their crappy contract that I gave them in the first place because they're afraid of getting sued? I don't want them to be in my practice making my life and everybody else in the practice's lives miserable for two years because they're afraid of that.
Why would I do that to myself? And yet I see it time in time again from practice owners because they're thinking about leveraging it in the positive to protect themselves. But realistically, it, also to your point, opens you up just as often to that from the negative side because it is a relationship and sometimes it works and sometimes it doesn't. And we have to think about that because we are also trapping ourselves when we use the non-compete in that regard, especially when it comes to those leave notices or the, “Don't go to another practice within a such and such certain distance.”
Andrew Roark:
It can feel punitive rather than strategic meaning, “Oh, you want to leave? I am going to shut you down. I am going to punish you. I'm going to give you a two-year headache because you left.” And that's not a good place to build a reputation. The last part, when you factor this in, is there are more and more practice groups that are advertising no non-competes. They are like, “We don't believe in non-competes and we are not doing it.” And you can take them at their word and go, “Wow, some people are really great.” Or you can be more cynical and say, “Ooh, that's a hiring advantage. They've figured out that they're probably not going to be able to keep using these anyway. And so they're casting them down and trying to use that as a strategic advantage in hiring.”
But that said, I think more and more doctors are going to hear about places that don't need non-competes or require non-competes. And so I don't know how widespread that's going to be, but I do think it's probably going to happen. And so anyway, all that around, so takeaways from me and then you can decide if you want to jump in on this, these working relationships are relationships. Everybody should be open about what they're offering and what they need. And the plan should be that the contract is part of the ongoing conversation of us working together, and they should put that down. I think non-competes are falling out of favor across the country. I don't know if that will be a complete sweeping change in the next 10 years or if that will be spotty, but they are starting to fall out of favor.
I think your options as an employer are either to say, “We are not going to use them and we're going to focus instead on just trying to maintain good relationships. And we understand that there's some risk, just like we understand there's a risk of us training our staff and then having them leave to go work somewhere else. It's just a risk that we incur.” I think that's probably the healthiest way to go. The other alternative would be to say, “Hey, I have these very specific concerns and this is kind of what I need to feel safe.” And I would say you should dig into what those specific concerns are and communicate upfront.
I mean, there is a way to say, “We're going to have non-compete. It does not kick in until you've worked here for three years. And at that point, if you're here for three years, then it's going to be a fairly limited range, and it's for these really important reasons.” I think you can talk about that just like we talked about the other parts of the contract and say, “If you have a good why and you're willing to make concessions to get the other person to agree to that, and you can articulate what your needs are, if you're okay with it and the vet's okay with it and everybody feels good, then go with it.”
Stephanie Goss:
Yeah. Yeah. I love it. And the only other thing that I would add to your point about it's a relationship and the contract helps define that relationship is on both sides. Especially knowing that this ask came to us from a potential practice owner, I'm going to throw out there, “Don't forget that needs change and they change on both sides.” And so the other piece of this that often doesn't get talked about, but I think that goes along with the ideas of non-competes and negative accrual and stuff like that, that is the winds of favor are shifting, is the perpetual contracts where it's like, “I don't review your contract again until you bring it up.” And as a manager, oh man, so much anxiety, especially early on in my career when one of my associate doctors would be like, “I would like to discuss my contract,” because it felt very negative.
It felt like, “Oh gosh, they're going to ask for some big change and it's going to be the end of the world.” The reality is we're humans in a relationship on both sides, and my needs change as an associate in the practice and my needs as a practice owner change, and we should have a system and a structure. Again, it goes back to the contract can't be the thing that you hide behind because you're afraid of the hard conversations. It has to be set up so that both people in the relationship have the ability to communicate their needs and make it work for them together. And to your point, Andy, sometimes we are in different corners. How do we bridge that gap to come together?
And so I think that's the other piece as a practice owner is if you're doing that to your team, if you're just like, “We're going to do your contract and then we're not going to review it again until you bring it up,” that would definitely be something that I would suggest. Take the stress and anxiety out of it and make a system for it so everybody knows, that it's communicated upfront like, “This is what we're going to do, this is how we're going to do it, this is when we're going to do it.” Put it on the calendar and then actually follow through.
Andrew Roark:
No, I agree.
Stephanie Goss:
Cool, cool.
Andrew Roark:
Well, I mean that's what I got. It's not the firm, “This is how you do it,” answer, but hopefully it's a good way of thinking about contracts in general. Start with the end in mind. What do we want to accomplish? Then going into the relationship, talking about needs that I have, needs the other side has, and then trying to come up with something that works for everybody. Know that non-competes seem to be losing favor. Know that there's other companies that are going without them and using that as a recruiting tool. Just adjust and react appropriately.
Stephanie Goss:
This is so fun. Take care, everybody. Have a fantastic week.
Andrew Roark:
Thanks, everybody. Take care.
Stephanie Goss:
Well, gang, that's a wrap on another episode of the podcast, and as always, this was so fun to dive into the mailbag and answer this question, and I would really love to see more things like this come through the mailbag. If there is something that you would love to have us talk about on the podcast or a question that you are hoping that we might be able to help with, feel free to reach out and send us a message. You can always find the mailbag at the website. The address is unchartedvet.com/mailbag, or you can email us at podcast@unchartedvet.com. Take care, everybody, and have a great week. We'll see you again next time.
