Sometimes, though, it is sufficient to give the de- parted physician an opportunity to buy out of the prohibition by paying what is known as liquidated damages. This is essentially a mutually agreed payment, derived by some sort of reasonable formula, to reflect an agreed approximation of the cost of the harm to the medical practice from the competition. Sometimes liquidated damages are a flat fee. When applying this formula approach, it is often advisable to have a ceiling on the amount of damages that would be payable under the formula. What is fair depends on the individual circumstances.
Many groups are willing to compromise on their noncompete provisions.
When I represent physician employees, I often negotiate such compromises. But I also resist them strongly when representing an established medical group. Here is my reasoning. The enforceability of a noncompete provision is directly related to its reasonableness. But if the medical group starts allowing exceptions to the noncompete clause, it effectively has stated that the employee's departure is not harmful to the group, or that the harm is O.K. in certain circumstances.