Before I begin, I just want to put up a disclaimer that I am not a lawyer, and nothing in this post should be construed as formal legal advice. If you need legal guidance, seek out the assistance of a contract lawyer.
Massage therapists seeking out independent contractor positions often run into “non-compete” clauses in their contracts, and aren’t quite sure how those clauses work, or why they exist. On various massage therapy forums, you’ll see RMTs asking questions like:
- “Are non-compete clauses legal?”
- “Are non-compete clauses enforceable?”
- “Don’t clients have a right to pick their massage therapist?”
- “Who owns the client, the massage therapist or the clinic?”
- “Don’t I (or my clinic) have to tell clients where I will be relocating to?”
The aim of this post is to help address some of these concerns, and to (hopefully) answer some of those questions.
What are non-compete clauses?
Generally speaking, a non-compete clause in a contract is a “restrictive covenant”1… an agreement between business owner and employee / IC that places restrictions on the massage therapist regarding working somewhere else during (and for a period after) their employment at the business. These clauses typically include specifics on distance and time, such as not opening a new clinic within so many kilometers of the business for a period of 1 year after they leave.
The goal of a non-compete clause in a massage contract is to prevent a massage therapist from building up a client base at one business, then leaving and having all of those clients leave with them. One of a massage clinic’s most valuable assets is their client list – they are the source of income for a clinic, and so the clinic wants to protect that asset.
What are non-solicitation clauses?
Non-solicitation clauses are similar, but different from non-compete clauses. They don’t place limitations on the massage therapist’s ability to work / operate a business elsewhere, but they do limit the therapist from soliciting business from the clients they saw at the previous location2. An example of solicitation would be calling, emailing, or mailing their previous clients telling them where they are working now, and that they can come there for appointments instead of the previous location.
Often, you’ll see non-solicitation clauses and non-compete clauses in the same contract.
Are non-compete clauses legal or enforceable?
It’s not illegal to include non-compete clauses in contracts.
How enforceable a particular non-compete clause is will depend on a number of factors. A previous employer can’t legally prevent you from earning a living, so in order for a non-compete clause to be enforceable, the terms of the clause have to be reasonable3. If the clinic is located in a small town with a population of 10000 people covering a total area of 25 kilometers, a clause saying the massage therapist cannot work or operate a business within a radius of 25 kilometers from the previous location wouldn’t be reasonable. What is reasonable will depend on location, time frame, other stipulations in the clause, and personal circumstance for the therapist, among other factors. It’s also worth noting that, in general, courts tend to find non-solicitation clauses more reasonably enforceable than non-compete clauses.
With that being said, you shouldn’t rely on a non-compete clause being unenforceable. There is no guarantee that the court will side with you, and signing a contract without the intent to adhere to the terms of the contract isn’t ethical. Remember that a contract is an agreement between you and the business owner conducted in good faith – if you have a concern about anything in a contract, negotiate with the business owner to change the terms of the contract before you sign it. You sign a contract with the understanding that the business owner will hold up their end of the bargain, you should strive to do the same.
If you’re not sure whether a particular clause is reasonable for your location and circumstance, contact a contract lawyer to review it with you before signing – each situation is unique.
Who owns the client? The clinic or the RMT?
No one “owns” the client. Any client is free to seek out health care treatment wherever and from whomever they want, regardless of a contract between two parties.
However, the client list is a business asset, and can be owned by either party. A business can retain ownership over that list. It’s important to outline who retains ownership of it in the contract.
The same applies for the client’s treatment notes and other relevant documentation. The client owns the information in the notes, but the notes themselves might belong to the massage therapist, or the clinic, depending on what is outlined in the contract. The client can, of course, request copies at any time to use at their discretion, and the clinic / RMT must oblige the request. Even if you created the treatment notes, the contract might stipulate they remain property of the clinic once you leave, so make sure to negotiate terms you are comfortable with before signing.
What about the CMTO policies? Don’t we have to tell clients where we are going?
The CMTO policy regarding leaving a practice is:
“The departing Massage Therapist has a responsibility to contact clients and notify them that he/she is leaving the practice. This may be done in person, by telephone or by letter. The purpose of this contact is to assist the client with the transfer of care to another provider, if necessary, and to advise them of how they can access their health record in the future.”4.
There is no requirement for the clinic or the RMT to tell the client where they will be practicing, only that they are leaving the current pratice, to arrange for continuing care if necessary (this can be with a different therapist), and where they can access their records in the future.
The CMTO also notes “In the event that the business owner will not permit the RMT to personally contact the clients, the therapist can make an arrangement to have someone from the clinic contact the clients to assist them with continuity of care”. There is no requirement for the clinic to let the RMT contact the clients directly, or to give them access to the client list once they depart. They are also not required to tell the client where the RMT is now working, just that they are no longer working at the clinic.
It’s important to remember that the clinic itself isn’t responsible for ensuring you are meeting your regulatory requirements. If something in a contract would prevent you from meeting your obligations, you’re responsible for changing those terms to ensure you’re not performing professional misconduct.
If you have any further questions about a particular clause, I would encourage you to contact a lawyer directly instead of relying on information from peers (including me). Each situation is unique, so what is true for one massage therapist might not be the case for another. You want to make sure you know what you’re agreeing to before you sign a contract at any clinic or place or employment.
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- “Non Competition Agreements”, retrieved from “http://www.toronto-employmentlawyer.com/employment-law-practice/non-compete-agreement” on December 9th, 2014 ↩
- “Non-Solicitation Agreements”, retrieved from “http://www.toronto-employmentlawyer.com/employment-law-practice/non-solicitation-agreement” on December 9th, 2014 ↩
- “How enforceable are non-competition and non-solicitation agreements in employment contracts?”, retrieved from “http://employmentlawottawa.com/2013/10/31/how-enforceable-are-non-competition-and-non-solicitation-agreements-in-employment-contracts/” on December 9th, 2014 ↩
- “Practice Advice”, retrieved from the “Leaving a Practice” tab at “http://www.cmto.com/registrants/practice-advice/” on December 9th, 2014 ↩