Non-reinstallation clause: when your former medical practice sues you for competition

Imagine yourself in Capbreton, after having practised for years in a medical practice with partners. You decide to leave, to create your own practice a few kilometres away, perhaps in Parentis-en-Born. But then your former partners threaten you with legal action, arguing that you are "taking" patients from them. What should you do? Can they really prevent you from working freely?

This situation, very real, is at the heart of a major decision by the Cour de cassation. Every healthcare professional, but also any owner or tenant of professional premises, asks this question: how far can the protection of clientele go? The magistrates' answer is clear and deserves to be known.

In 2015, the highest French judicial court recalled an essential principle: non-reinstallation clauses (clauses that prohibit a professional from setting up practice in a defined geographical area after leaving a structure) are to be interpreted strictly. In other words, they cannot be given a broader scope than what they explicitly state. A decision that protects both the freedom to practise and patients' choice.

The facts: a story as happens every day

The story begins like so many others in the world of liberal professions. Three nurses, whom we will call for example Ms A, Ms B and Ms C, decide to form a partnership. They create a société civile de moyens (a structure that allows sharing premises, equipment, expenses, without merging their own clienteles). Their practice is located in a commune we could imagine to be Mimizan, on the Landes coast.

In their articles of association, they insert a non-reinstallation clause. This clause stipulates that if one of them leaves the company, she will not be able to set up practice to exercise her activity in the same commune for a certain period. The objective? To protect the remaining patientele from the former partners. A common practice, but one that often hides pitfalls.

The years pass, and Ms A decides to withdraw. She transfers her shares (her rights in the company) to her former partners, as planned. Then, she opens her own practice... but not in the same commune. She chooses a neighbouring commune, let's say for our territorial anchoring, that she sets up in Parentis-en-Born while the initial practice was in Mimizan. Logically, she thinks she is outside the scope of the clause, since it only targeted the original commune.

But her former partners do not see it that way. They sue her, considering that by continuing to visit patients residing in the original commune (Mimizan), she has "disregarded the spirit" of the clause. For them, it does not matter where the new practice is located; what matters is where the patients live. The court of appeal rules in their favour, condemning Ms A. She then appeals to the Cour de cassation, and that is where the case takes a decisive turn.

The court's reasoning — analysed

The Cour de cassation, in its judgment of 4 February 2015, quashes the court of appeal's decision. Its reasoning rests on two fundamental legal pillars, which must be understood to grasp the full scope of this decision.

First pillar: Article 1134 of the Civil Code. This article provides that "agreements legally formed take the place of law for those who have made them". In plain terms, what you have signed, you must respect. But — and this is crucial — this article also imposes a strict interpretation of contracts. One cannot add obligations that are not included. The Court thus recalls that non-reinstallation clauses, because they restrict the freedom to practise a profession, must be interpreted literally. If the clause prohibits setting up in commune X, it does not prohibit setting up in commune Y, even if neighbouring.

Second pillar: Article R. 4312-8 of the Public Health Code. This text specifically concerns healthcare professions and enshrines the principle of freedom of establishment and practice. It recalls that any hindrance to this freedom must be justified and proportionate. The Cour de cassation emphasises that the contentious clause, in this case, only targeted the original commune. Extending it to the neighbouring commune would amount to creating an unforeseen restriction, therefore excessive.

But what exactly does this change? The Court criticises the court of appeal for having held that Ms A had "disregarded the spirit" of the clause without characterising any element demonstrating a diversion of patientele. In other words, it is not enough to say "she visits patients from the old commune"; one must prove that she actively sought to divert them, for example through direct solicitation. Without this proof, the mere fact of continuing to treat patients who naturally follow her does not constitute a violation.

This reasoning marks a confirmation of prior case law. It reminds lower court judges that they cannot "invent" contractual restrictions. A clause must be applied as written, not as one might wish it to be. undefined, I have encountered cases where former partners attempted to use such clauses to stifle any competition, well beyond what was reasonable. This decision sets the record straight.

What this changes for you — concretely

This decision has direct implications for several profiles, whether you are an owner, tenant, healthcare professional, or even a simple citizen.

If you are a healthcare professional (nurse, doctor, physiotherapist, etc.) considering leaving a partnership or group practice: you must examine with extreme attention the non-reinstallation clause in your contract or articles of association. Check its precise geographical scope. Is it limited to a commune? A neighbourhood? A radius of X kilometres? If it only mentions the current practice commune, you can set up in a neighbouring commune without violating it, even if you retain patients from the old area. However, be careful: this does not authorise you to actively solicit the former patientele. For example, if you are a physiotherapist leaving a practice in Capbreton to set up in Parentis-en-Born, you can continue to treat Capbreton patients who come to see you spontaneously, but you cannot send them targeted leaflets.

If you are a landlord of professional premises: this decision affects the value and attractiveness of your properties. Premises located in a commune where such clauses are common may see their demand modified. Imagine premises in Parentis-en-Born: a healthcare professional leaving a partnership in Mimizan might see an opportunity there, knowing that a clause restricted to Mimizan would not prevent them from setting up there. This can influence rents and speed of letting. In tourist areas like the Landes, where the density of healthcare professionals is crucial, this aspect must be taken into account.

If you are a patient or resident: your freedom of choice is strengthened. The Court reminds: these clauses must not infringe patients' freedom of choice. If your preferred nurse moves her practice a few kilometres away, you have the right to continue consulting her, unless she herself renounces it. This guarantees continuity of care and a preserved trust relationship.

Concretely, the financial stakes are real. An alleged violation of such a clause can lead to significant damages, often calculated on the basis of commercial prejudice suffered. In areas like the south of the Landes, where patientele can be numerous (seasonal workers, permanent residents), the sums at stake can easily exceed €10,000 to €20,000. Not to mention procedural costs, which can add €3,000 to €8,000 depending on complexity.

Four tips to avoid this type of dispute

• Draft precisely: If you insert a non-reinstallation clause in a partnership contract or articles of association, be extremely precise about the geographical scope. Prefer "within a radius of 5 kilometres around the practice address" rather than vague terms like "in the region". Also indicate the duration (for example, 2 years) and any possible exceptions (relocation for family reasons).
• Have it checked by a professional: Never sign such a contract without having it reviewed by a lawyer specialised in company law or health law. An investment of €200 to €500 for a consultation can save you years of proceedings and tens of thousands of euros in damages.
• Document any departure: When you leave a structure, draw up a minutes of departure specifying the conditions, the transfer of shares, and mutual recognition that the non-reinstallation clause applies within the strict contractual limits. This cuts short any subsequent "extensive" interpretation.
• Avoid any aggressive behaviour: If you set up nearby, refrain from any proactive steps to "recover" the former clientele. Do not engage in targeted advertising, do not send letters to former patients. Let them come to you naturally. This significantly reduces the risk of being accused of clientele diversion.

Deepening: related case law and developments

This decision fits into a consistent line of case law. Already, in a judgment of 8 July 2003 (No. 01-10.947), the Cour de cassation had recalled that non-competition clauses (of which non-reinstallation clauses are a variant) must be limited in time, space, and activity, on pain of nullity. The 2015 judgment specifies this requirement for the geographical aspect: no extension beyond the text.

However, there are divergent decisions in slightly different contexts. For example, when the clause is included in a contract for the sale of a fonds de commerce (the set of elements that allow the operation of a business, such as clientele, equipment), judges may be stricter in its interpretation, because the buyer pays to acquire a protected clientele. But between professional partners, as in this case, freedom of practice prevails more.

The trend of the courts is clear: to protect freedom of work and access to care. With medical desertification in some rural areas, like certain parts of the Landes department, this orientation is crucial. It means that, in the future, overly restrictive clauses risk being systematically annulled or interpreted restrictively. A professional wishing to re-establish in an under-served area will have less to fear from former partners.

What you must absolutely remember

To summarise the essentials of this decision, here is a 5-point checklist:

• 1. Strict interpretation: A non-reinstallation clause only applies within the exact limits of its text. If it targets a commune, it does not extend to neighbouring communes.
• 2. Proof of diversion: For there to be a violation, one must prove active behaviour of clientele diversion (solicitation, targeted advertising). The mere fact of treating former patients who come spontaneously is not sufficient.
• 3. Double protection: The clause must respect both the professional's freedom of practice (Article R. 4312-8 of the Public Health Code) and patients' freedom of choice.
• 4. Contractual verification: Before signing any partnership contract, have restrictive clauses checked by a lawyer. Poor wording can cost you dearly.
• 5. Documentation: Upon departure, formalise the conditions in writing to avoid subsequent misunderstandings.

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How to react if you are faced with such a situation? Do not panic. First analyse the contract. If the clause is clearly limited and you have set up outside its scope, you have strong arguments. Quickly consult a lawyer to assess your position and, if necessary, initiate an action to assert your rights.

Do you find yourself in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →