Daniel Schulte discusses employment agreements as a means for protecting against patients being poached by past employees in the latest issue of The Journal of the Michigan Dental Association (November 2022).
Question: A front desk employee left my practice and is now working for another practice close by. Following her departure, I’ve received several requests from patients that their records be transferred to this former employee’s new practice. I believe this former employee is contacting my patients directly using a list of patient names, phone numbers, etc., taken from my office, and soliciting them to join this new practice. What can I do about this?
Answer: Your employment agreements and employee handbook are your first line of defense. You should include an obligation to not misappropriate information both in the employee handbook and specifically in any employment contract you have. Any employee who has access to your patients’ contact information should have an employment agreement containing an obligation to not misappropriate, use, or disclose this information, and to maintain its confidentiality. Those employees not having an employment agreement should be subject to the same obligations contained in your employee handbook, which they have agreed are binding on them as a condition of their employment. This should be documented by each of these employees in a written acknowledgement signed by them.
Theses obligations, whether contained in an employment agreement or employee handbook acknowledgement, will enable you to sue this former employee for breach of contract and seek damages for the loss of business resulting from this illegal use of your patient contact information. You should also consider pursuing other claims, including tortious interference, unfair competition, conversion, misappropriation, etc.
Michigan’s Uniform Trade Secrets Act (MUTSA) (MCL 445.1901 et. seq.) may also provide a remedy if you are able to establish that your patient contact information is a “trade secret.” MUTSA provides injunctive relief (a court order preventing the use of the patient contact information) in addition to money damages for your loss of business. MUTSA only applies to a “trade secret” defined by MUTSA as information having been “the subject of efforts that are reasonable and under the circumstances to maintain its secrecy.”
Read the complete Q&A in the Journal of the Michigan Dental Association on page 22.
About the author:
Daniel J. Schulte has more than 25 years of experience helping clients solve tough problems and capitalize on opportunities that require a blend of business and legal expertise. His practice focuses on addressing the legal, business, licensing, and regulatory challenges of health care professionals, organizations, and facilities. Dan understands how legal issues impact business objectives and, as a result, offers his clients practical, results-oriented advice. He is a Certified Public Accountant, former managing partner and current executive committee member of the firm. Dan also serves as co-chair of the firm’s Health Care Practice Group.
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