Health Care Today | Health Law Blog

This is Part 1 in a two-part series. Part 1 will focus on employee non-compete assignability in asset purchase transactions, and Part 2 will address stock purchase or merger transactions.

Health care employers such as medical groups or hospitals have a valuable stake in protecting their businesses interests by having covenants not to compete in place for important employees such as physicians. Whether these non-competes are assignable by a seller to a buyer can be an important consideration in structuring a business transaction involving the purchase of a health care business enterprise.

Health care transactions can be complex, given the regulatory maze of health care laws and regulations applicable to the entities involved. One way to help mitigate the risks inherent in such transactions is through representations and warranties insurance (“R&W insurance”), which can be purchased by a buyer or seller. R&W insurance is becoming more common in health care transactions as a means to provide buyer and seller more financial certainty in finalizing a deal.