Drug Topics - December 17, 2007 - (Page 3)

www.drugtopics.com DECEMBER 17, 2007 DRUG TOPICS 3 Of Interest to Students Noncompete clause: Help or hindrance? Michael Barbella t is almost second nature now to Erin Albert. Whenever she receives a business contract, particularly one pertaining to employees, she immediately hands it off to her attorney. “I have been faced with more than a good share of CDAs [confidentiality agreements] and noncompetes in my time as an employee or potential employee,” said Albert, a pharmacist, business owner, and assistant professor at Butler University’s College of Pharmacy in Indianapolis. Albert isn’t alone. Most practicing pharmacists have come across restrictive covenants at some point in their careers, usually when negotiating “Any time there is employment contracts. For some, a legal document these covenants— involved, that’s an better known as noncompetes—can issue. It’s not become a point of contention; for othsomething that ers, they are hardly goes away. Read worth noting. Nevertheless, they are before you sign.” growing in popularity: A 2005 study by the Society for Human Resource Management found that half the companies surveyed use noncompetes. And the Shepherd Law Group in Boston reports that cases involving noncompetes have risen 81% in the last decade. “They have been pretty standard for a long time,” said Jesse C. Vivian, a professor in the Pharmacy Practice Department at Wayne State University in Detroit. “It’s a pretty normal kind of clause to have in [employment] contracts.” As normal as they may be though, noncompetes can potentially be troublesome, recruiters and practicing pharmacists warn. “They can completely stop you in your tracks, these noncompetes,” said Chris Conley, a biopharmaceutical recruiter based in Portland, Ore. “It really ties the individual’s hands as to where he can go. I think that is wrong.” Noncompetes for pharmacists can be particularly restrictive, Conley noted. While noncompetes generally prevent employees who resign from a company from working for a competitor for a certain period of time I within a certain geographic area, noncompetes for pharmacists go a step further. In many cases, chain drugstores that purchase independent pharmacies will include noncompetes that prevent pharmacists from opening another store within a certain geographical area for a specific amount of time. “In a typical situation, there is an independent pharmacist who owns his or her own pharmacy,” Vivian explained. “A chain [drug] store will come in and want to buy that pharmacy. That pharmacist will be given a managerial contract to stay in the store for a certain period of time. The contract will also have a noncompete clause that says this pharmacist will not open another pharmacy within a certain geographic area for a specified amount of time—usually it’s five years/five miles.” Of course, there are exceptions. Vivian said some chain drugstores include noncompetes in job contracts that prohibit pharmacists from working for competitors or from disclosing trade secrets. But pharmacists can usually find a way around these restrictions, he added. “The reality is that many of these [drugstore] chains have locations at reasonable driving distances so the pharmacist can usually pick up some part-time hours at another chain if he wants to,” Vivian said. Not necessarily, argued Conley. Companies can include any kinds of restrictions they want to in noncompetes. “From a pharmacist’s perspective, if you want to take on a second job—say your wife is expecting or your child is going to college, whatever it may be—many times you can’t,” said Conley. “Maybe [the noncompete] is not five miles, maybe it’s 20 miles. It’s not just an inconvenience, it will actually hit you in the pocket.” Vivian disagreed. As long as pharmacists venture outside the restrictive radius for additional work, they are not violating their noncompetes. Besides, he said, the geographic limitation can be modified depending on the area. Though they are standard in most employment contracts for pharmacists, Vivian said noncompetes can be negotiated out of contracts. Pharmacists who do not want restrictions placed on their ability to seek other employment should simply suggest the noncompete be taken out of their contract, he said. He advised pharmacists—particularly those entering the workforce from pharmacy schools—to read employment contracts be- http://www.drugtopics.com

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Drug Topics - December 17, 2007 Contents Noncompete Clause: Help or Hindrance? Don't Overlook Feminine Care and Family Planning Independent Pharmacies Are Dreaming of a Green Christmas Latest News Roundup

Drug Topics - December 17, 2007

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