DOCTORS AND NON-COMPETES:#6

The Circuit Court of Fredericksburg (VA) decided the next important Virginia case involving doctors and non-compete contracts. The case, decided in 1998, was Clara Belle Wheeler v. Fredericksburg Orthopedic Associates and Mid-Atlantic Health Alliance.

Dr. Wheeler (an orthopedic surgeon) and medical practices entered into a written employment agreement for a 12 month period. The agreement required Dr. Wheeler to become “board certified” in the field of orthopedic surgery. The agreement also contained a non-compete provision which prohibited Dr. Wheeler from practicing medicine within a 35 mile radius of the City of Fredericksburg for a period of 18 months if she left her employment.

After 12 months, the employment agreement was never renewed in writing…but both the medical practices and Dr. Wheeler kept working under the same terms and conditions. After failing her second attempt at passing her orthopedic boards, Dr. Wheeler was terminated by the medical practices. She then filed suit against the medical practices requesting the court to find her non-compete unenforceable.

Dr. Wheeler’s sub-specialty was in the field of orthopaedic microsurgery of the hand. There was no other physician in the Fredericksburg, Virginia, area who was engaged in that type of practice. When emergencies occurred which required a physician with Dr. Wheeler’s sub-specialty in the Fredericksburg area and she was unavailable, those patients were transported to either Washington, D.C., Richmond, or Charlottesville, Virginia, cities more than fifty miles from Fredericksburg.

There were several significant issues in the case but two of the most important issues/findings by the judge were the following:

1. The medical practices fired Dr. Wheeler. In doing so, the medical practices, by their own actions, were deprived of Dr. Wheeler’s services, expertise, and net profit. The only damages the medical practices could claim would be their loss of profit through direct competition with Dr. Wheeler. Those damages would be difficult to prove since Dr. Wheeler engaged in a specialty of orthopedic surgery that was not practiced by any of the remaining members of the medical practices.

2. The public would suffer a harm if Dr. Wheeler was not allowed to practice her sub-speciality within 35 miles of Fredericksburg as patients would have to travel substantial distances to find a similarly skilled doctor.

The court granted a temporary injunction against the medical practices which prohibited their interference with Dr. Wheeler’s efforts to practice medicine in Fredericksburg. Apparently, the case settled (presumably upon favorable terms for Dr. Wheeler) before any final rulings by the court.

My Take: First, if the doctor focuses her/his practice in a specific area of medicine not readily served in the geographical area…the non-compete mail fail due to public policy concerns. Secondly, how can an employer prove damages due to the actions of a fired/terminated physician?

Dan Frith

Dan Frith

Dan Frith has over 25 years of experience representing individuals and families in cases of medical malpractice throughout Virginia. He has been named "Best Medical Malpractice Attorney" by Roanoker Magazine and is a member of the Million Dollar Advocates Forum. To speak with Dan, contact him by email at dfrith@frithlawfirm.com.