Restraints and non-compete clauses: an exercise in reasonableness For dentists who operate under a contract with their practice owner, it is usual to expect that the contract will include a post-contractual restraint. That is, a provision which restricts the dentist’s conduct once they leave the practice. These may also be known as non-compete clauses A restraint provision will typically provide that the dentist must not engage in activities that are similar to or in competition with those conducted at the practice; and there will commonly also be an express prohibition on the soliciting of patients. Dentists frequently enquire with us about whether their restraints are enforceable. This may be because a change of practice is imminent, or because they are considering future career plans; or in some cases, they may have already left their former practice only to receive notice that they are in breach of a restraint. Whilst restraints differ contract
26
March 2021 Western Articulator
to contract, and their application and effect is always fact-specific, some general principles are explained below.
Restraints must be reasonable The general rule is that a restraint of trade is contrary to public policy and void, unless it can be shown that the restraint is reasonable. A restraint must go no further than is reasonably necessary to protect the interests of the person in whose favour the restraint operates. Essentially, the courts will assess restraints based on commercial fairness and the need to hold parties to their agreements.
