Trial Court Questions Appropriateness of Medical Non-Compete Agreement
Non-compete provisions are fairly standard in employment contracts for many professionals. These contracts typically impose restrictions on where and for for whom a departing employee can work. Despite the fact that such contract provision can significantly limit an employees ability to find another job in their field without relocating, Indiana generally enforces these contracts so long as they are reasonable in their scope.
So when 2 Evansville cardiologists recently parted ways with Ohio Valley HeartCare, Inc., and tried to get a court to rule that the non-compete clause in their employment contracts should not be enforced, the trial court upheld the agreements, at least to some extent:
Though finding for Ohio Valley, [Vanderburgh Superior Court Judge Wayne] Trockman significantly rolled back the noncompete restrictions, finding that Millsaps and Morera will be prohibited from practicing cardiology only in Vanderburgh, Posey, Gibson and Warrick counties, and in Henderson County, Ky., for two years.
Link.
Noting that Indiana law has long upheld the validity of such non-compete agreements, he also noted that other states have raised concerns, at least in the medical field, about whether such provisions are in the public interest:
In his 17-page decision, Trockman noted that the American Medical Association opposes such noncompete agreements. “When restrictive covenants are enforced, they force discontinuity of care, and physician-patient relationships are involuntarily terminated,” Trockman wrote. “The implications that flow from the disruption caused by enforcing covenants include increased costs of care, decreased quality of care and decreased patient satisfaction.”
The doctors attorney said they are taking their fight to the court of appeals, and are requesting that the trial court stay the enforcement of the provision pending that appeal.
I doubt that they will have much luck with the court of appeals. A change in the existing law of such magnitude based on public policy should come from the legislature. Invalidating such provisions would make building a medical provider rather difficult, as the high profile employee doctors could split off and likely take most of their patients with them.
I am seeing non-compete clauses in more and more employment agreements as companies try to limit even low-level employees from turning into competitors. Generally, you should understand what you are getting into when you sign one of these things.
March 9th, 2006 18:03
Someone very close to me works for a company that forces everyone, even the lowest level employees, to sign noncompetes. These are very low paid positions, no benefits, no access to “trade secrets” (the very idea of a trade secret in this particular industry is ludicrous), and no involvement in marketing or sales. Seriously, it’s at the level of Burger Joint A suing burger flippers who defect to work at Burger Joint B.
Aren’t there some lower limits to this sort of idiocy? When you’re dealing with non management hourly employees, noncompetes are simply taking away the person’s ability to scrape out a meager living in the same field.
In this case, the effect has been that management can now get away with just about anything, since they can not only fire you, they can take away your ability to make a living for two more years. And even if you don’t get fired, you are prevented from getting another job in the same field, so you’re right back to square one.
And, of course, the people who need to fight this crap don’t really have the options or money to do so — if they leave, they get a nasty letter, a nasty lawsuit, and presto — instant bankruptcy. The very definition of barratry.