Restrictive covenants you would impose: enforceability and ethics

Can you put a non-compete on your own clinicians?

It depends first on your state, and the ground is moving. Non-competes are governed primarily by state law: some states bar them for most workers, some limit them by wage or profession, and some enforce reasonable ones. A federal effort to ban most non-competes — the FTC's 2024 rule — was set aside by a federal district court in 2024, so as of July 2026 it is not in effect and state law controls while appeals proceed 1Ref 1Federal Trade Commission (2024).Noncompete Rule.The FTC's 2024 non-compete rule and its being set aside in court — the basis for stating non-competes are governed by state law as of July 2026, with the as-of framing..

Before drafting anything, find out what your state actually allows. A covenant your state will not enforce is worse than none, because it signals bad faith without protecting you — and, as the ethics section below explains, it can create a problem even where it is legal.

What a restrictive covenant is — and the milder alternatives

"Restrictive covenant" is an umbrella for several clauses that are not equally enforceable. A non-compete bars a departing clinician from practicing within an area for a time; a non-solicit bars them from actively recruiting your clients or staff; a confidentiality clause protects your records and business information; and a notice period buys an orderly transition.

Courts and legislatures treat the narrower clauses far more favorably than a broad non-compete. For a solo practice, a well-drafted non-solicit plus confidentiality plus a reasonable notice period often protects the real asset — continuity and information — without the enforceability and ethics problems a non-compete carries.

• Non-compete — broadest, most often challenged or barred.
• Non-solicitation — narrower; protects client and staff relationships.
• Confidentiality — protects records and business information.
• Notice period — secures an orderly handoff.

You are an employer now — the rules a covenant can't override

Imposing a covenant means you are an employer, and a covenant sits on top of employment duties it cannot waive. Federal anti-discrimination laws phase in by headcount — Title VII and the ADA at fifteen employees, the ADEA at twenty — so most solo employers fall below those federal thresholds and are reached first by state law, the same place non-compete rules live 2Ref 2U.S. Equal Employment Opportunity Commission (2026).Employers.That federal EEO laws phase in by employee count (15 for Title VII/ADA, 20 for ADEA), so a small employer is reached first by state law..

No agreement can contract around the Fair Labor Standards Act's minimum wage, overtime, and recordkeeping duties for non-exempt staff 3Ref 3U.S. Department of Labor (2026).Fair Labor Standards Act.That the FLSA's wage, overtime, and recordkeeping duties cannot be waived by any employment agreement.. You are also picking up the other duties of a small employer — workers' comp where your state requires it, unemployment insurance, and the small-employer thresholds that phase in by size. Whether the role is W-2 vs 1099 for admin work matters here too, because the misclassification audit can undo the savings a contractor looked like. And regardless of any covenant, you must screen every hire against the OIG exclusion list, because no federal health-program payment may be made for services furnished by an excluded person, and the LEIE is the public check 4Ref 4HHS Office of Inspector General (2026).Exclusions Program.That OIG exclusion bars federal-program payment for an excluded person's services and the LEIE is the public screening check for new hires.. A covenant is a small clause inside this larger frame, not a substitute for it.

The ethics problem a non-compete creates in clinical care

Enforceability is only half the question; the other half is your professional ethics. A non-compete that prevents a departing clinician from continuing to see their established clients can force those clients to lose their provider or switch practices against their preference — which runs into professional norms around continuity of care, client welfare, and free choice of provider.

Many licensing boards and professional codes treat a client's right to continuity and choice as paramount, so a covenant that reads as "the clients are mine" can be both unenforceable and an ethics complaint waiting to happen. The defensible posture is to protect your business information and prevent active solicitation, while leaving the client free to follow the clinician they trust. Write the covenant to protect the practice, never to hold clients hostage.

If you use one, make it narrow, reasonable, and state-specific

Assume a court will scrutinize every term, and draft accordingly. The covenants most likely to survive are narrow: a modest geographic radius or a specific client list rather than a whole metro, a short duration, and a legitimate interest — protecting confidential information and referral relationships, not simply blocking competition.

Because the enforceable scope is set by your state and, for some clauses, by wage thresholds, this is the part you do with an attorney licensed in your state, not from a template pulled off the internet. Put the covenant in its own signed clause with its own consideration, keep it consistent with the compensation and expectations you set elsewhere, and revisit it whenever your state's law or the federal litigation changes. The genuine trigger for counsel here is not optional; it is the difference between a clause that holds and one that collapses in court.

The better retention tool is usually not a covenant

For most solo practices, the covenant is solving the wrong problem. People rarely leave a practice they are paid and treated well in, and a covenant does nothing to fix the reasons clinicians actually go. Benchmark your compensation against published data — the Bureau of Labor Statistics posts wage distributions for psychologists and related roles you can use as a reference 5Ref 5U.S. Bureau of Labor Statistics (2025).Occupational Employment and Wages: Clinical and Counseling Psychologists.BLS wage distributions used to benchmark competitive pay as the retention alternative to a covenant. — and pair fair pay with a real career path.

Add reasonable caseloads, benefits at micro scale where you can afford them, and a voice in how the practice runs. A non-solicit protects you at the edges; competitive pay and a good place to work protect you at the center. Decide covenants, compensation, and expectations as one coherent offer, not three separate afterthoughts.