DOCTORS AND NON-COMPETES: CASE #8
The City of Norfolk Circuit Court provides the next physician non-compete case of interest. The case, Denton Weiss v. E.V.M.S Academic Physicians and Surgeons Health Services Foundation, was decided in 2005.
Dr. Weiss and EVMS entered into an employment agreement which contained a non-compete provision. Problems arose in the employer-employee relationship and Dr. Weiss asserted that EVMS had failed to meet its obligations under the employment/non-competition agreement. Dr. Weiss, while still employed by EVMS, filed suit against his employer asserting what is called the “First Breach Defense” in his attempt to void the non-compete provision of his contract. This defense basically asserts that if an employer first breaches its obligations and duties to the employee under the employment agreement, then the employer is not permitted to hold the employee to his/her obligations under the agreement. This is also sometimes referred to as the “clean hands defense” to non-compete contracts.
Great strategy by Dr. Weiss and his legal team…only one problem. The employment/non-competition agreement contained the following language:
The existence of any claim or cause of action of the Clinician [Dr. Weiss] against EVMS and the Foundation, whether predicated on this Contract or not, shall not constitute a defense to the enforcement by EVMS and the Foundation of the restrictions, covenants and agreements contained herein.
Basically, EVMS took away the first breach or cleans hands defense by inserting language in the employment/non-compete agreement allowing them to do so. The court found that inserting this “no defense clause” into the contract was not unconscionable or in violation of public policy.
My Take:Make certain you read all of the contract and discuss its meaning and impact with an attorney experienced in these matters.