A recent newspaper article from West Virginia reported on a case where a hospital sued a doctor, alleging he broke his non-compete agreement with the hospital. The lawsuit alleges the doctor became a staff physician at Wheeling Hospital on April 1, 2010, and continued until March of this year, when he informed supervisors of his intent to retire from medical practice. However, it was later discovered that, after leaving Wheeling Hospital, the doctor went to work for rival Trinity Health System in Steubenville, Ohio. The doctor’s employment contract with Wheeling Hospital prohibited the doctor from practicing medicine within a 25-mile radius of Wheeling Hospital for a period of three years, after he ceased working with Wheeling Hospital. The lawsuit also alleged the doctor solicited patients and former co-workers to leave Wheeling for Trinity.
We see these types of cases in Virginia all the time and, in our opinion, the hospital should lose the case every time. First, why does the hospital get to determine which doctor a patient can see? There should be a strong public policy to allow patients to select whatever doctor they want when searching for competent medical care. Second, a three year restriction is outrageous. Many courts will uphold a two year limitation on non-compete restrictions but three years is way too long! What reasonable business interest does the hospital have in preventing an ex-doctor from caring for patients within a 25 mile radius for three years?
Finally, read what the American Medical Association (Opinion 9.02 – Restrictive Covenants) says about physician non-competes:
Competition among physicians is ethically justifiable when it is based on such factors as quality of services, skill, experience, conveniences offered to patients, fees, or credit terms. Covenants-not-to-compete restrict competition, can disrupt continuity of care, and may limit access to care.
Physicians should not enter into covenants that:
(a) unreasonably restrict the right of a physician to practice medicine for a specified period of time or in a specified geographic area on termination of a contractual relationship; and
(b) do not make reasonable accommodation for patients’ choice of physician.
Physicians in training should not be asked to sign covenants not to compete as a condition of entry into any residency or fellowship program. (I, II, III, V, VI)
My Take: I am rooting for the hospital…Big Time!