ARTICLE
By: Joshua Massingill, Esq. In The E-Myth Revisited, Michael E. Gerber describes what he calls the “fatal assumption” of many small business owners: the belief that if you understand the technical work of a business, you therefore understand how to run a business that performs technical work. According to Gerber, this assumption often leads skilled professionals to strike out on their own—only to discover that technical proficiency alone is not enough. Entrepreneurial Doctors of Chiropractic frequently encounter this problem firsthand. Their extensive—and expensive—education prepares them exceptionally well to deliver patient care, but offers little guidance on how to manage employees, comply with labor laws, or build scalable systems. The result is a practice that may be clinically excellent but operationally fragile. Gerber’s proposed solution is to think of your business as a franchise from the outset. This mindset encourages the development of repeatable systems that improve efficiency, consistency, and profitability. One of the most important—and most overlooked—of these systems is human resources. Many entrepreneurs dream of being the boss. Far fewer aspire to be the HR director. Yet any practice that hires, manages, or terminates employees must grapple with employment law. A basic understanding of the rules, coupled with thoughtful systems, can help retain good employees while reducing legal exposure. Employment Agreements Not every hire requires a formal written employment contract. However, for key or hard-to-replace employees, a well-drafted employment agreement can provide meaningful benefits. For example, an agreement may require advance notice of resignation, giving the practice time to recruit and train a replacement without disrupting operations. It is important to remember that an enforceable employment agreement must be supported by consideration. In practice, this often means providing a defined term of employment or limiting the employer’s ability to terminate the employee without cause. Without these elements, the agreement may offer little real protection. Employment agreements may also include restrictive covenants, such as covenants not to compete. These provisions are most appropriate for employees who will receive confidential or proprietary information, including associate doctors. Among Doctors of Chiropractic, there is a persistent belief that non-compete agreements are unenforceable in Texas. That belief is incorrect. While Texas law imposes specific requirements, covenants not to compete can be enforceable if they are reasonable in scope, duration, and geographic area and are tied to a legitimate business interest. Texas courts also apply the so-called “blue pencil” rule, which allows a judge to reform an otherwise enforceable non-compete that is overly broad. In other words, aggressive drafting does not automatically doom an agreement—but precision and restraint are far more effective. In recent years, non-compete agreements have attracted significant political and regulatory attention. In 2024, the Biden administration—acting through the Federal Trade Commission—announced an aggressive attempt to impose a nationwide ban on most non-compete agreements. That proposal generated considerable uncertainty and media coverage, but it ultimately did not take effect. Federal courts blocked the rule before implementation, and it is not currently enforceable. The practical takeaway for Texas employers is straightforward: non-compete agreements remain lawful and enforceable when properly drafted. Providers should not assume that restrictive covenants are prohibited or outdated based on federal proposals or headlines alone. Employment Manuals In addition to contracts, practices should strongly consider maintaining a written employee handbook. This is especially important for at-will employees. A well-crafted handbook clarifies expectations, standardizes procedures, and can significantly reduce liability exposure. Many practices operate smoothly based on informal norms and unwritten rules. While that may work in the short term, it offers little protection when disputes arise or new employees are hired. Committing policies to writing improves onboarding, promotes consistency, and strengthens the employer’s legal position. Independent Contractors Another frequent source of risk is worker classification. Employers must correctly determine whether individuals providing services are employees or independent contractors. This distinction has significant tax and legal consequences. Some business owners attempt to sidestep payroll obligations by labeling workers as independent contractors or having them sign “independent contractor agreements.” Unfortunately, labels and contracts are not determinative. The IRS and other agencies apply a fact-intensive analysis that focuses on behavioral control, financial arrangements, and the nature of the relationship. If the practice controls what work is done, how it is done, and when it is done, the worker is likely an employee—regardless of the title used. Misclassification can result in substantial penalties, back taxes, and interest, making this an area where professional guidance is essential. A solid HR system does not eliminate all risk, but it dramatically reduces uncertainty and prevents small issues from becoming expensive problems. With thoughtful planning, entrepreneurial doctors can build practices that are not only clinically strong, but legally and operationally sound. This article is intended as legal education, not legal advice. You should consult with a qualified attorney regarding your specific circumstances. This article is courtesy of Joshua Massingill, TCA Attorney and Lobbyist of Statecraft, LLC and TCA Affiliate Member Massingill Attorneys and Counselors at Law.
By: Joshua Massingill, Esq.
In The E-Myth Revisited, Michael E. Gerber describes what he calls the “fatal assumption” of many small business owners: the belief that if you understand the technical work of a business, you therefore understand how to run a business that performs technical work. According to Gerber, this assumption often leads skilled professionals to strike out on their own—only to discover that technical proficiency alone is not enough.
Entrepreneurial Doctors of Chiropractic frequently encounter this problem firsthand. Their extensive—and expensive—education prepares them exceptionally well to deliver patient care, but offers little guidance on how to manage employees, comply with labor laws, or build scalable systems. The result is a practice that may be clinically excellent but operationally fragile.
Gerber’s proposed solution is to think of your business as a franchise from the outset. This mindset encourages the development of repeatable systems that improve efficiency, consistency, and profitability. One of the most important—and most overlooked—of these systems is human resources.
Many entrepreneurs dream of being the boss. Far fewer aspire to be the HR director. Yet any practice that hires, manages, or terminates employees must grapple with employment law. A basic understanding of the rules, coupled with thoughtful systems, can help retain good employees while reducing legal exposure.
Employment Agreements
Not every hire requires a formal written employment contract. However, for key or hard-to-replace employees, a well-drafted employment agreement can provide meaningful benefits. For example, an agreement may require advance notice of resignation, giving the practice time to recruit and train a replacement without disrupting operations.
It is important to remember that an enforceable employment agreement must be supported by consideration. In practice, this often means providing a defined term of employment or limiting the employer’s ability to terminate the employee without cause. Without these elements, the agreement may offer little real protection.
Employment agreements may also include restrictive covenants, such as covenants not to compete. These provisions are most appropriate for employees who will receive confidential or proprietary information, including associate doctors.
Among Doctors of Chiropractic, there is a persistent belief that non-compete agreements are unenforceable in Texas. That belief is incorrect. While Texas law imposes specific requirements, covenants not to compete can be enforceable if they are reasonable in scope, duration, and geographic area and are tied to a legitimate business interest.
Texas courts also apply the so-called “blue pencil” rule, which allows a judge to reform an otherwise enforceable non-compete that is overly broad. In other words, aggressive drafting does not automatically doom an agreement—but precision and restraint are far more effective.
In recent years, non-compete agreements have attracted significant political and regulatory attention. In 2024, the Biden administration—acting through the Federal Trade Commission—announced an aggressive attempt to impose a nationwide ban on most non-compete agreements. That proposal generated considerable uncertainty and media coverage, but it ultimately did not take effect. Federal courts blocked the rule before implementation, and it is not currently enforceable.
The practical takeaway for Texas employers is straightforward: non-compete agreements remain lawful and enforceable when properly drafted. Providers should not assume that restrictive covenants are prohibited or outdated based on federal proposals or headlines alone.
Employment Manuals
In addition to contracts, practices should strongly consider maintaining a written employee handbook. This is especially important for at-will employees. A well-crafted handbook clarifies expectations, standardizes procedures, and can significantly reduce liability exposure.
Many practices operate smoothly based on informal norms and unwritten rules. While that may work in the short term, it offers little protection when disputes arise or new employees are hired. Committing policies to writing improves onboarding, promotes consistency, and strengthens the employer’s legal position.
Independent Contractors
Another frequent source of risk is worker classification. Employers must correctly determine whether individuals providing services are employees or independent contractors. This distinction has significant tax and legal consequences.
Some business owners attempt to sidestep payroll obligations by labeling workers as independent contractors or having them sign “independent contractor agreements.” Unfortunately, labels and contracts are not determinative. The IRS and other agencies apply a fact-intensive analysis that focuses on behavioral control, financial arrangements, and the nature of the relationship.
If the practice controls what work is done, how it is done, and when it is done, the worker is likely an employee—regardless of the title used. Misclassification can result in substantial penalties, back taxes, and interest, making this an area where professional guidance is essential.
A solid HR system does not eliminate all risk, but it dramatically reduces uncertainty and prevents small issues from becoming expensive problems. With thoughtful planning, entrepreneurial doctors can build practices that are not only clinically strong, but legally and operationally sound.
This article is intended as legal education, not legal advice. You should consult with a qualified attorney regarding your specific circumstances.
This article is courtesy of Joshua Massingill, TCA Attorney and Lobbyist of Statecraft, LLC and TCA Affiliate Member Massingill Attorneys and Counselors at Law.