Leashed: How Veterinarian Noncompetes Accelerated Industry Consolidation

By Logan Wilke

The veterinary services industry, once characterized by locally-owned general care providers, has been rapidly consolidating into one dominated by multinational conglomerates. These corporate consolidators leverage their size and capital both to fund acquisitions and to attract debt-laden veterinary school graduates with above-market starting salaries. Whether they join a corporate practice through entry-level hiring or an acquisition, veterinarians typically become bound by employment contracts containing restrictive noncompete provisions. Regardless of their specific terms, legal enforceability, or actual enforcement, these noncompetes appear to keep young associates from leaving to competitors until later than they otherwise would have. These provisions serve to withhold scarce labor from competitors, which has increased pressure on independent veterinarians to sell their practices and accelerated consolidation.

In detailing the effects of veterinary consolidators’ use of noncompetes, this Note lends support to a broad federal rule prohibiting these provisions without an exception based on income or job function. A rule eliminating all veterinarian noncompetes except those covering practice owners or those used in the sale of a practice can best foster more equitable and sustainably competitive growth in the veterinary services industry.

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