Academic journal article Journal of Counseling and Development : JCD

Noncompetition Agreements: How Informed Are Counselors? (Research)

Academic journal article Journal of Counseling and Development : JCD

Noncompetition Agreements: How Informed Are Counselors? (Research)

Article excerpt

Private practice opportunities, bolstered by licensure, certification, and registration laws in various states of the United States and the District of Columbia (American Counseling Association [ACA], 2002; Gerstein & Brooks, 1990), have become the preferred employment setting for many graduates of counselor programs (Zimpfer, 1996). (Licensure information for this article was originally retrieved in an earlier ACA document that is no longer available; a current 2002 document is provided.) Most counselors, however, begin their professional career in the employment of a private or community agency (Hosie, West, & Mackey, 1988; Lawless, Ginter, & Kelly, 1999; West, Hosie, & Mackey, 1987, 1988). Many counselors subsequently make the decision to open a private practice and, in most cases, compete with their former employer. Typically, employers within professions such as law, medicine, architecture, and dentistry have attempted to restrict competition from former employees through the use of noncompetition agreements. Noncompetition agreements are contractual terms between an employer and an employee prohibiting the practice of a trade or profession for a specified time or within a geographic region upon an employee's leaving an employer's hire (Valiulis, 1985). The following is a sample of a typical physician's noncompetition agreement upheld by the Court of Appeals of Kentucky:

   Each full time employee further expressly covenants and agrees
   (unless waived in writing by the corporation) that, for a period of
   one (1) year following the termination of his employment with the
   corporation, he will not, directly or indirectly, for himself as an
   agent, on behalf of, or in conjunction with, any person, firm,
   association, or corporation, engage in the practice of medicine
   within a fifty (50) mile radius from the city where he has primarily
   performed his services. (Hall v. Willard & Woolsey, 1971, pp.
   316-317)

Competing with one's former employer has historically caused problems within professions like law, medicine, architecture, and dentistry (Valiulis, 1985). The problem frequently arises from the transfer of clients or patients to the competing practice after the employee's decision to leave the employing agency or corporate body and engage in private practice. This competitive relationship between the former employer and the new private practitioner is now becoming a visible issue in mental health services. In a 1992 survey of community mental health agency administrators, private practitioners were viewed as the greatest competitor for insured clients (Clark & Dorwart, 1992).

Despite this developing competitive atmosphere in mental health service delivery, little is known about counseling professionals' knowledge and endorsement of noncompetition agreements. Our review of the counseling literature (spanning the time period of 1970-2000) found no empirical data describing counseling professionals' knowledge and endorsement of noncompetition agreements. Moreover, neither the American Counseling Association Code of Ethics and Standards of Practice (ACA, 1997) nor the American Mental Health Counselors Association Code of Ethics (American Mental Health Counselors Association [AMHCA], 1987) includes position statements concerning the use or view of noncompetition agreements. The absence of a professional position by ACA and AMHCA regarding noncompetition agreements stands in stark contrast to other professions, notably law and medicine, in which noncompetition agreements have had a longer and more prominent history (American Bar Association, 1990; American Medical Association, 1997). Clearly, if practicing counselors are to compete knowingly with other providers in the competitive climate of mental health service delivery, they will need to understand the nature of noncompetition agreements and be prepared to acclimate their practices accordingly. …

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