Understanding Non-Compete Agreements: Considerations for Audiologists and Speech-Language Pathologists

A non-compete clause is a contractual arrangement between an employer and employee that typically blocks the worker (employee or contractor) from working for a competing employer, or starting a competing business, within a certain geographic area and period of time after the worker’s employment ends. These clauses can also be referred to as a non-compete agreement or a covenant not to compete.

According to the Federal Trade Commission (FTC), approximately 30 million Americans―about one in five workers―are subject to a non-compete clause as part of their employment contract. Non-compete agreements affect audiologists and speech-language pathologists (SLPs) as both employees and employers.

Encountering a non-compete agreement

You may have to navigate a non-compete agreement when you sign an employment contract with a new employer. This can be as soon as starting a clinical fellowship or even later in your career. These clauses affect your ability to practice if you change employment in the future. However, not all employers use them.

Employer use of non-compete agreements

Most employers use non-compete clauses to protect their businesses and their intellectual property. As with all employment contract considerations, there are positives and negatives to the use of noncompete agreements. Some employees who have signed such agreements say they restrict their ability to move employment settings on their own terms and restrict their ability to practice. Learn more about the pros and cons of these agreements and general contract considerations for professionals.

The legality of non-compete agreements

Non-compete agreements are not universally legal and enforceable, and laws and regulations vary state-by-state. For example, some states expressly prohibit the use of these agreements, while some state laws may allow them but restrict the length of time or establish a maximum radius for enforcement that employers can use. Other states may limit their enforceability to those instances where the worker makes at least a certain wage level. Some employers will use non-compete clauses in their employment agreements despite the fact they are not enforceable in their state. Some employees will leave their place of employment despite knowing they are subject to a non-compete clause in their contract.

Currently, at the federal level, non-compete agreements are enforced on a case-by-case basis. President Biden has taken aim at these clauses, starting with Executive Order 14036 “Promoting Competition in the American Economy.” The Federal Trade Commission (FTC) is the federal executive branch agency that enforces consumer protection laws that prevent unfair business practices, among other processes. In January 2023, the FTC released a proposed rule that would universally ban non-compete clauses. The proposed rule elicited close to 27,000 public comments, a staggering figure that illustrates the contentious nature of these agreements. There is also pending federal legislation, the Workforce Mobility Act of 2023, that would also ban the use of these clauses.

It’s unclear whether the FTC’s proposed rule will be finalized or whether any legislation will become law. Even if the rule is finalized in its current form, there will likely be litigation at both the state and federal levels surrounding current law. Because of the uncertain future of these types of clauses in employment contracts, ASHA encourages members who use these agreements to explore alternatives to non-compete clauses that may help create a less restrictive work environment for employees and still protect business interests without running afoul of legal limitations. ASHA also encourages members to think strategically about negotiation of all elements of their employment agreement, including the use of non-compete clauses. You can find out more about negotiating before accepting employment at Navigating the Offer and Before You Accept a Job Offer, Negotiate.

Consulting an attorney

When using or working under a non-compete agreement, it’s important to meet with a local attorney that can help navigate all the implications of these clauses on your practice. If you need help finding a lawyer, you can search for your state’s bar website and find an attorney there. Your state’s speech-language-hearing association may have referrals to experienced attorneys as well. For free or low-cost legal assistance, consider consulting with any law schools in your area to see if they host a legal clinic that may be able to advise you.

Member experience with non-compete agreements

ASHA conducted a member survey in spring 2023 and received close to 1,000 responses from both the employee and employer perspectives. Members shared their experiences with these clauses which ranged from viewing them as a necessary action to protect business information to examples of how these clauses have seriously limited employee career or even personal opportunities.

Employee Perspectives

The following excerpts from responses to ASHA’s member survey provide a snapshot of employee perspectives regarding the impact non-compete agreements have had on their careers.

"My contract’s non-compete clause prevented me from getting a better job in the community I live in as the contract stated I couldn't work within 50 miles of where I was contacted if I chose to leave the contracting company. This makes it hard to leave bad jobs that don't pay well."

"I worked for a company that wanted me to sign a non-compete. I signed the employment contract (because I needed the job) but refused to sign the non-compete. The company had made all of the school districts they did business with sign non-competes. By signing the employment contract, I, unbeknownst to me, automatically entered into several non-competes with the school districts this company had done business with (even if I had not personally worked with those school districts through that company). This covered most school districts within a 10-mile radius of my home. When I left that job, I realized that for a period of two years, I would be unemployable by most school districts that were near me."

"Employer threatened a frivolous lawsuit when I left their practice. They ultimately backed down, but it cost me $4k!"

"I moved out of state because [the non-compete agreement] felt punitive and restrictive."

"I was a Clinical Fellow and didn't know any better, just happy to have a paying job in the works...I was not sure what exactly it meant for looking for a new position. I didn't know at the time it was unenforceable. I felt I was bullied at this position and taken advantage of."

Employer Perspectives

The following excerpts from responses to ASHA’s member survey provide a snapshot of employer perspectives regarding the use of non-compete agreements to protect their businesses.

"I use non-compete clauses to protect the company... [and] the investments we make in our employees. We had an employee who we got certified in specialty areas and she opened a practice two minutes from ours and advertised the certifications we paid for and solicited our patients."

"We live in a small rural area and have significant difficulty recruiting and retaining employees. It takes approximately nine months to train even the most experienced individual in private practice requirements needed for insurance. It is very costly as a business. In addition, our business relies on the ability to offer families a regular schedule. If therapists were coming and going, there would be huge impacts to their care to constantly shift to another provider."

"We contract with school districts and since we put in the effort to connect, train, and supervise our staff, the school hiring that staff member directly and cutting me out would really hurt my business. Finding therapists is really hard. My business is contracted because they couldn't find someone initially."

"As an employer, I currently work alone. I do plan to hire additional therapist[s] as my business grows. When I do, I plan to use a non-compete. They are important, because it protects me, as an employer, and my business from therapists joining my business, then deciding to leave and take all of the clients that I and my business worked hard through time and money to gain! This occurs more often than it should. Therapist[s] “use” established businesses to gain clients, then walk away with an entire caseload and start their own business. Previously, when I was employed by others, I had non-competes that included “not practicing within a mile radius of [the] facility” and another that didn’t allow me to treat clients seen at that business without written permission. I had no issue with this, because I understood why they did it. If I had a non-compete, I would be okay for therapist[s] to leave and ‘take’ clients with them given permission. Sometimes, it’s in the best interest of the patient and family to continue with an established clinician- but not always. There are circumstances where it’s appropriate!"