Legal Question in Employment Law in Missouri
Enforcement of physician non-compete agreement
I am physician employed by a large hospital corporation in their Occupational Medicine division. The occ. med. company was purchased by the hospital corp. 18 months ago and our old contracts were assumed. The corporation is now selling off the Occupational Medicine division and will no longer be involved in Occ. Med. Their was a non-compete agreement in my original contract restricting me for 3 years and 60 miles. I have not signed any agreement with the company that is making the purchase and taking over our clinics. They are not assuming our old contracts. I have accepted a postion with a third occ. med. company in town, and have given my notice to take effect the day prior to the day of takeover by the new company.
My current company is stating that by doing so I am violating my non-compete agreement. They are getting out of the occ med business completely. Can they enforce a non-compete agreement when there is no company to compete against? What would I be competing against, when the current company will no longer exist? Can they enforce the non-compete just because it is in my contract? Do contracts cease to exist when companies are sold?
Thanks,
Steve
2 Answers from Attorneys
Re: Enforcement of physician non-compete agreement
Yes, in my opinion, the new owners likely took over the contracts. These provisions are enforceable if they are reasonable in time, scope, and geography. Given that that your current employer is no longer in the occ. med. business, it MAY be a good argument that scope of the agreement or the geography of the agreement is no longer reasonable.
The problem in these cases is that you may end up having to spend quite a bit in legal fees to get the answer. The other side may also try to enjoin you from your new job, then you are also not able to work.
Please consult with an attorney for further information.
Good luck with your situation.
Best regards,
Todd D. Epp, Esq.
Licensed in Kansas and South Dakota
Re: Enforcement of physician non-compete agreement
These types of covenants are enforceable unless unreasonable, and the benefit of the covenant can pass to another business, though one would want to look at the language of the agreement. I would suggest that you have a competent attorney review the language of the agreement and your specific circumstances to determine if the agreement would be enforceable. If you violate the agreement, you might find yourself in expensive litigation. It also is possible that you could negotiate your way out of the agreement. Feel free to contact me further if you would like to purssue your issue in more detail.
Michael Shultz
866-385-9955
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