Contracts and Non-Competes: What's a New Therapist to Do?
You did it! You got the degree, you passed your state licensing exam, and you now have your provisional license to work as a therapist. Your hard work has paid off!
Now, you realize the most important step hasn’t happened yet: You must still find a place where you can actually BE a therapist. A place where you will work, and get paid, to do therapy.
Post-Grad Anxiety
As you think about this post-grad employment journey, panic sets in. You begin to remember all of the negative realities about being a therapist you heard in grad school. Your mind tells you:
“Well, I have to pay my dues.”
“Maybe I need to start at an agency.”
“Are private practice owners going to laugh when they see someone with ZERO experience applying to their prestigious practice?”
Am I even qualified to negotiate anything?
You remind yourself that this is your anxiety talking. You know you have what it takes. You have worked hard, and you are passionate about this field! You would be an asset, if someone would give you the chance.
Getting Hired
You regroup, and reach out to a few practices in your local community. To your own disbelief, you actually receive a response! There’s a practice owner excited to offer you a position as a contracted therapist (1099). YOU ARE THRILLED. You are proud of yourself, excited, and feel on top of the world (as you should)!
The next step is to receive and sign the practice’s contract. You read it and experience a mix of excitement and dread; your mind is saying, “Oh my gosh, I’m so thrilled!” and “Oh my gosh, they want me to sign this?”
My Story
The practice owners where I was offered a contract therapist position included a non-compete clause in their contract that, if signed, would keep me from working within twenty miles of their office for two full years after leaving the position. It did not simply say I couldn’t take the practice’s clients, or work in the same general geographical area, but that I could not conduct therapy within twenty miles of the practice office.
Where I am located, in Michigan, the radius included in the non-compete amounts to a forty-five minute commute. As someone who has dreams of opening her own practice in the community where I live, this non-compete gave me pause.
How am I going to know what the future holds?
Is this going to tie me down?
I am a limited licensed therapist; do I have a choice?
Okay, okay. This is a great opportunity, Paige. Don’t mess it up!
Yes, those were just a few of the thoughts running through my mind as the practice owners continued to push me to make a decision. I understand they were trying to run a business; it is only fair that they would want to know as soon as possible if I would be joining their team.
My Dilemma
The timeframe between contract delivery and decision date didn’t leave me the opportunity to thoroughly weigh my options and ask for advice from supervisors, previous professors, or classmates/colleagues who were also entering the field. (Tip: I highly recommend you have these conversations BEFORE signing anything). I was too nervous to leave the practice waiting, so I signed the non-compete before I heard back from my mentors.
My Decision
I signed the non-compete for two reasons:
I was genuinely grateful for the opportunity, and for the belief the practice owners had in me, as a newbie
I was scared, and I didn’t know any better.
What I Know Now
Fast forward several months, and my experience at this practice has been phenomenal. I feel incredibly supported, I have great clients, and I get to create my own schedule—What a dream!
However, there is one struggle that continues for me, and it’s rooted in that non-compete—the original “thing” that gave me pause.
You see, after speaking to many professionals and mentors within my community, I’ve discovered that the fee split and non-compete that I signed were much stricter than what was typical in my state. Most of my previous classmates were not required to sign a non-compete, and those who did were only limited from taking any clients from their place of employment.
Lessons Learned
I want to encourage anyone who is reading this to remember that you are capable, you are qualified, and you worked hard for this opportunity. While I am incredibly grateful for the position this practice has provided me, there are several realities that I wish I had considered before signing my contract, and I include a list for your consideration, below.
However, please note: This blog post was not created to advise you not to sign a non-compete, or to communicate that I regret it. Rather, I am sharing my story, my fears, and my anxieties, because I know there are other new clinicians out there experiencing a similar journey. And, I believe in the importance of providing support to one another, and being transparent in this field when it comes to employment and financial freedom.
Thoughts and Reminders (My List):
As a 1099, you are a contracted worker, and you do not have benefits. It is important that your fee split provides you with a livable wage to pay out of pocket for your benefits, if needed. Typical fee splits from those I spoke to in my community were (30/60 if you were a W-2 with benefits, and 60/30 if you were a 1099). I won’t go into specifics, but my fee split is below 60%.
With what insurance companies is the practice paneled, and what are the reimbursement rates? For example: From a reimbursed Medicaid session, you may receive a rate of $30 after the fee split; but, from a reimbursed BCBS (Blue Cross Blue Shield) session, you may receive a reimbursement rate of $65 after the fee split. Knowing this will help you plan financially and will also help determine if the fee split at the specific practice you’re considering will work for you.
You don’t have to feel guilty for wanting financial freedom and sustainability.
Do you get free supervision included in your fee split from someone at your practice? Or, do you have to pay out of pocket elsewhere for supervision? The provision of supervision varied quite a bit as I spoke to colleagues in other practices. For example, I contract a supervisor privately and pay out of pocket, but a friend of mine has it included in her fee split, and her boss provides her supervision. For me, it wasn’t an option to have supervision included, because my license type is different from my practice owners’ (counselor vs. social worker).
What to consider before signing a contract with a non-compete clause:
What are your long term goals? How could signing potentially affect those goals?
Who is your ideal client? Will the contract limit you from being accessible to those clients? If so, how, and for how long?
Will it deprive you of making a living, or force a relocation in order to use your experience and skills in the future?
Is the non-compete clause enforceable in your state?
Every state has different laws, depending on “enforceability” and ultimately, the potential impact on the business, the employee, and the community. As a tip: The more research I’ve done into their enforceability, the more gray areas I've found.
As an ethical consideration: If you sign the contract, and the non-compete clause isn’t fully enforceable in court, how will you proceed? I believe it is important to have this conversation with yourself.
Please note: The trends on non-completes are going to look slightly different across different communities and states, and perhaps the trends have also been impacted due to the COVID-19 pandemic.
Bottom line
You know what feels right to you and what doesn’t. If something in a contract doesn’t sit well with you, there is a valid reason. Don’t ignore it. Talk to others! Your network from grad school = your best resources!
It’s important to start the business relationship on a good note. Take the time to ask your potential employer questions. Is anything negotiable? If not, are you still willing to sign the contract?
Don’t allow yourself to be rushed into signing a contract, either. If you need more time to consider the contract, and the practice’s overall offer, ask for it.
Make sure to consider your values and goals in your decision-making process. This decision is not one size fits all. Ultimately, it’s up to you to decide what works for your lifestyle, financial needs, and desired autonomy.
Good luck on this journey!
Grab the free cheat sheet for evaluating a contract decision, inside our free resource library.
Register here:
The Author
Paige Sparkman MA LLPC SCL is a licensed therapist at a group practice located near Detroit, Michigan. She works with youth and young adults; specializing in anxiety, disordered eating, ADHD, and self-esteem development.
Paige is a member of our free Refreshed Therapist community. If you’d like to connect with her, join here.
Let’s Chat
Please share your responses in the comments, below.
Do you have a non-compete story?
What question do you have about signing a non-compete?