Essay Sample on Medical Practice

Question Presented

Is a doctor, who has been working with one for and has signed the noncompete clause that prohibits him from opening a competing medical office or working for a competing office within 50 miles radius for the next seven years, justified to claim in court that this provision is too broad in geographic area and too long in time?

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Short Answer

Yes, the doctor can challenge this clause in court on the ground that it gave too many restrictions and the period was too long. Normally, the restriction should be made according to the type of contracts and business that the employer offers. For instance, for a company that deals with a contract that lasts for 2 years, then the restriction can be two years long. In this case, the doctor is restricted for seven years, whereas the contracts and services offered in the medical office usually last less than that. Even if the doctor has any confidential information about the medical office, that information will not be valid for seven years. The distance restriction of 50 miles is also too long and should be reduced. Most of the people seek medical attention within their area of residence and very few travels long for the same. The doctor can seek for a better judgment and a change in the clause signed.

Statement of Facts

A medical practice ("The Practice") with its only office in North Ft Myers has been in business for 12 years and has a large number of patients. The Practice hires a new doctor in 2015. His three-year employment contract contains a provision which provides that upon his departure from The Practice, he cannot, for the next seven years, compete with the practice by opening a medical office (or accepting employment with another medical office within 50 miles of The Practice). The employment contract permits the doctor to end his employment on 30 days' notice. Now it is two years later, and the doctor consults informs you that he has found new employment in Naples, FL about 47 miles from North Fort Myers. He asks whether the restriction in his contract with The Practice may be challenged as too broad in the geographic area and too long in time.

Discussion

The Practice had a right to defend their interest when hiring the doctor and the law allows the clause to be effective in cases where a former employee can be a threat to the business. Employment contracts are legally binding between the employer and the employee and the law prevents both parties of the contract. The non-compete clause is a law in which the employee agrees that they will not start a similar business to that of the employer within a span of 50 miles from the place where they are employed and this applies for the next seven years. Therefore, if one leaves their employment, then they have to operate beyond the 50 miles away from the employment place for the next seven years (Norman, 2014). The clause defends the employers from a possibility that when people are employed, they can gain fame and favor from the customers and if they can open a similar business within the area, these customers would follow them. If such a thing happens, then the employer is at a disadvantage because they lose their customers to the employee who quits starting their own similar business.

The Practice required the doctor to remain beyond 50 miles from their business for at least seven years and not to be in any competing medical office but the terms of the contract could be challenged successfully in court. In North Ft Myers, where The Practice h sots only office, and within the State of Florida, the law stipulates that any noncompete restriction that exceeds two years is invalid. It is also applicable in the planning of the business operations like Research and Development, whereby people involved in research activities for the business are not allowed to operate in a way that they can benefit the competing companies with the research data they get from the other companies (Conti, 2014). In the case of The Practice, the restriction for seven years is invalid and can be challenged in court. The doctor should be allowed to work in the new job. The distance of 50 miles is also exaggerated and the law states that in case the court proves that the geographic restriction was not valid, the correction is made but the entire restriction is not invalidated. In Florida, The Practice can also protect its interests to retain its professional assets (Horvitz, 2015). The case is related to several other cases as shown in the rest of the essay.

Examples of Cases

The Case of Thomas Versus Farr Company

In the case named above, Mr. Thomas was working as the managing director of Farr plc, an insurance broker that specialized in working with social companies for housing services. The clause contained in the employment contract was that he could not seek similar employment or compete in any way within the area for the next 12 months after he left the employment. The clause also prevented Thomas from soliciting customers and using the confidential information from the business to run any other businesses. Before the end of the contract, Mr. Thomas resigned after he was demoted and transferred to a subsidiary of the company. After that, he sought to work for a competitor within the area and he claimed for breach of contract in high court. He also sought to dismiss the non-compete clause to make sure that it does not apply to him. The high court chose to handle the clause about the 12 months restriction as a preliminary issue. Mr. Thomas lost the claim in the High Court on the ground that the clause was enforceable. He appealed to the Court of Appeal and this one upheld the decision too (Monkam, 2017). The view was that because he was the managing director in his former employment, he had the access to all confidential data about the former employer and that he had the competitive advantage that could help the new employer to gain unfair competence over the competitor, who in this case is Farr plc.

The above case is an example of the cases where the law upholds the clause if it has the potential to affect the other businesses. Some cases may state that the restriction is too broad and it is not enforceable. For example, when an employee does not have access to confidential data about the business, the clause can be taken to be too broad to be applied. In the case of Mr. Thomas, the court needed to decide whether the clause was no wider than necessary to apply and to be legitimate. The court also had to determine if the 12 months restriction was valid and it held that because most of the insurance contracts took more than 12 months, then it was a valid time for the restriction. However, Mr. Thomas had a chance to work in the industry in any other way that he was not in a competitive position with the former employer. Any confidential information held by Mr. Thomas would not be valid after the 12 months period and this was used by the court to make the ruling.

The Case of McMillan Versus PartyLite Incorporated

In the above-named case, MacMillan used to work for PartyLite Company that sells candles and other home products through the home party plan method whereby they arrange with the clients to supply them with the products through the consultants. The company deals with many customers around their location. McMillan worked as a contractor or a consultant with the company. Together with the rest of the employees, she had signed a contract that required them to avoid doing a similar business and to keep the confidential information about the company a secret. McMillan left the company and started working for Park Lane Jewelry Incorporated. The company also sold products through the home plan and direct consultants who could get the client to buy the products from the comfort of their homes. Even though the new employer sold jewelry and the former employer dealt with home products and candles, they both had the same sales plan. They both used the "home party plan" to reach out to their customers and this way McMillan was in breach of the non-compete contract signed with the former employer.

The case was ruled that McMillan was in breach of the contract because she was in a business that could use the information she had to have a competitive advantage. It was also determined that before leaving PartyLite, McMillan had been in communication with the employees from Park Lane. She also held several meetings with the salespersons from the former employer, within and outside Florida. The court identified that some of the people who met McMillan after she quit working for PartLite followed her to work for Park Lane. She used her position to woe many people to leave Party Lite and to join her new position by referring them to her new boss.

Proudfoot Consulting Company versus Gordon

The case of the Proudfoot Consulting Company versus Gordon is also an example of how courts deal with the cases of the non-compete clause. Gordon had signed an agreement with Proudfoot Consulting Company that barred him from working with the clients of the company within six months after leaving the employment and also from working with a direct competitor. The agreement also barred him from disclosing any confidential information to any of the competitors or clients and also from soliciting the employees of Proudfoot Consulting Company. Proudfoot Consulting Company offers services to companies to help them to improve their performance, to reduce redundancy, to implement better systems of management and to streamline their performances. The company had its headquarters in West Palm Beach in North. America and also has offices in New York and Atlanta. Gordon worked as the Senior Process Consultant for the company between 1999 and 2006. He also worked as a project manager between 2001 and 2005. As a project manager, he was in charge of making sure there is repeat business from the clients, convincing them to make referrals, achieving the results for the clients and making referrals. In his last year at the company, he also worked as a project director, whereby he supervised several projects at a time and was in direct contact with the customers at any given time. From the above explanation, it is evident that Gordon had access to the critical information about the company and the clients that could be used to give competitive advantages to the competitors (Argenbright Rioux, 2017). He had access to a lot of information including the pricing and he retained some of it after he left the company.

In June 2006 he started working for Highlands Consultancy Company located in the United States and he was promoted to a project manager and later to director of operations. The company had clients in the United States, Canada, and Europe, the same area served by his former employer. He was charged by Proudfoot for breach of the contract and the non-compete clause. The court held that he had retained and used confidential information from Proudfoot and had worked for a competing company before the end of the six months. The use of the confidential information had no time limit in the contract (Argenbright Rioux, 2017). The ruling was in support of the non-compete clause and is used as a precedent in other similar cases.

Medi-Weightloss Franchising USA, versus Medi-Weightloss Clinic of Boca Raton, Llc

In the case above, Medi, a franchisor of weight loss clinics, signed an agreement with Dr. Martinez and Medi-Boca to open clinics under their name. The agreement included the non-compete clause that stated that they should not use the confidential data from the clinic to run a similar business and that they should not run or work for a similar business within 25 miles from where the Medi-Boca clinic was located. They were also restricted from usi...