Your Role After the Sale: Employment Terms and Non-Competes

Most buyers of a physical therapy practice want the owner to stay for a while. Your patients know you. Your referral sources know you. The buyer is paying for those relationships and wants time to transfer them.

That means the sale usually comes with two more documents beyond the purchase agreement. One is an employment or transition agreement. The other is a non-compete, often paired with a non-solicitation clause. Both shape your life for years after closing, so they deserve as much attention as the price.

How long you stay

The transition period is the first term to settle. Some buyers want a short handoff of a few months. Others want you treating patients for several years. The right length depends on how much of the practice runs through you personally.

Think about what you actually want. If you plan to retire, a long commitment may feel heavy. If you love treating and dislike the admin, staying on as a clinician may be the best part of the deal. Know your answer before the buyer asks.

Also ask what happens if either side wants out early. Look at how termination works, what counts as "cause," and whether leaving early affects money still owed to you. This matters most when part of your price is in an earnout or a seller note.

Your role and title

Your role will change, even if your title does not. You will no longer have final say on hiring, pricing, payer contracts or equipment. Someone else will set policies you used to set.

Get the role in writing. Spell out whether you are a treating clinician, a clinic director, a regional leader or an advisor. Note who you report to and which decisions stay with you. Vague language here leads to frustration later.

Pay and schedule

Your post-sale pay is separate from your purchase price. It is a salary or hourly rate for work you do after closing. Compare it to what a buyer would pay a non-owner in the same role in your market.

Watch for two common issues. First, some offers move part of the value out of the price and into a higher salary. That shifts risk to you, because salary depends on staying employed.

Second, productivity targets can quietly raise your workload. Ask for visit or revenue expectations in writing.

Schedule matters as much as pay. If you want four days a week, or no evenings, negotiate it now. It is far easier to set boundaries before signing than after.

Questions worth asking about pay and schedule:

• What is the base pay, and how is it adjusted over time?
• Is there a bonus, and what exactly triggers it?
• What benefits, paid time off and continuing education support come with the role?
• What caseload or productivity target applies to you?
• Who sets your schedule, and can it change without your agreement?

Non-compete scope

Nearly every buyer will ask for a non-compete. They are paying for goodwill, and they do not want you opening a clinic down the street. A reasonable restriction is a normal part of an asset sale.

The details are what you negotiate. Look at four things:

• Length. How many years the restriction lasts, and whether the clock starts at closing or when your employment ends.
• Geography. The radius or territory covered, and whether it covers all the buyer's locations or just yours.
• Activities. Whether it bars owning a clinic, treating patients, teaching, consulting or related work.
• Non-solicitation. Whether you are barred from recruiting staff or contacting patients and referral sources.

Pay close attention to the start date. A non-compete that starts when your employment ends can run much longer than it looks. If you stay three years and the restriction runs five years after you leave, you are bound for eight.

Think about the work you might want later. Maybe you want to teach, treat per diem in another town or consult. Ask to carve those activities out now if they matter to you.

Get an attorney's read

Non-compete enforceability varies by state, and the rules change. Restrictions tied to the sale of a business are often treated differently from ordinary employment restrictions. What holds in one state may not hold in another.

That is why you need a transaction attorney to review the employment agreement and the non-compete before you sign. Your attorney can explain how your state treats these terms today. Your CPA should weigh in on how salary and purchase price are taxed.

We help you set priorities and negotiate the business terms. Your attorney handles the legal drafting and advice.

Your next step

Write down three things before you talk to any buyer. How long you are willing to stay. What role you want. What work you want to keep doing after you leave.

Those three answers will guide every term in this post.