PHYSICIAN NONCOMPETE NOT ENFORCED
This report comes to us from Iowa, the Iowa Court of Appeals to be exact. The decision in The University of Iowa v. Dr. Thomas Warren, does have some relevance to Virginia as the court applied the same rationale typically utilized by Virginia courts in determining the validity of non-compete agreements.
Dr. Thomas Warren was employed as an assistant professor with the College of Medicine at the University of Iowa. He was primarily engaged in research, but saw patients one day each week at Cancer Care of Iowa City. He signed a non-compete agreement which prohibited him from practicing medicine within two years or fifty miles after he left the University.
Dr. Warren came to realize he was not going to achieve tenure and resigned his position with the University. He then became employed with Iowa Blood and Cancer Care, P.L.C., in Cedar Rapids. The University filed an action against Dr. Warren seeking an injunction to prohibit him from practicing medicine in violation of the non-compete agreement. The trial court denied the University’s request for an injunction and the appellate court agreed.
The Iowa Court of Appeals ruled the University has not met its burden to show the restriction was reasonably necessary for the protection of the University’s business. Dr. Warren had limited contact with patients while at the University and did not attempt to solicit the patients of Cancer Care. Further, the court held the University had not shown it suffered or will suffer a loss of business due to the practice of medicine by Dr. Warren. Finally, the appellate court found that public policy prevented the enforcement of the noncompete agreement.
Kudos for Iowa…and, for the most part, the same principles of law apply in Virginia!