RESTRICTIVE COVENANT UNENFORCEABLE
BY SURVIVING SPOUSE
The Virginia Supreme Court ruled that a medical practice corporation, ownership of which had transferred from the deceased sole physician shareholder to his spouse and which was converted to a business corporation by state law, could not enforce a restrictive covenant because it could not practice medicine and had…
Restrictive covenants are often the most complicated clauses in a physician employment contract. Medical practices and their lawyers are constantly striving to make these non-competition agreements more protective, more comprehensive and more enforceable. Sometimes this "more is better" approach backfires!
Continue Reading Should You Have A Liquidated Damages Provision as Part of Your Restrictive Covenant?
The District Court of Appeal of the State of Florida affirmed a lower state court holding that certain aspects of a restricted covenant were not enforceable. In Florida Hematology and Oncology v. Rambabu Tummala, M.D., the Practice had terminated Dr. Tummala allegedly after he began questioning certain billing practices. Although Dr. Tummala was subject to a restrictive covenant prohibiting competition for two years within fifteen (15) miles of any office of the Practice, Dr. Tummala immediately opened a competing practice within the proscribed area. The Practice sought an injunction forcing the restrictive covenant. Continue Reading FLORIDA STATE COURT INVALIDATES RESTRICTIVE COVENANT
In MurfreesboroMedical Clinic vs. Udom, the Tennessee Supreme Court ruled that restrictive covenants are not enforceable against physicians, unless specifically prescribed by law. In handing down this decision, the Court overturned an appellate court decision enforcing the restrictive covenant. Although restrictive covenants are otherwise enforceable in Tennessee, the Court found that interfering with patient…
In WellSpan Health v. Bayliss, the WellSpan Health System, the primary components of which are York Hospital and Gettysburg Hospital, attempted to enforce a restrictive covenant against a physician in all counties listed in the non-compete section of an employment contract, despite the fact that WellSpan had no physical presence in three of the counties.…
