A physician signed a non-compete covenant, agreed to be enjoined if he breached, and allegedly did breach. But when his former employer asked a Providence, Rhode Island Superior Court judge to enter an injunction, the judge refused to prevent patients from being treated by a doctor of their own choosing, reports Paul E. Freehling of Seyfarth Shaw on the firm’s Trading Secrets blog.

The case involved a physician employed by a provider of health care services principally to nursing home residents. He signed an employment agreement with a non-competition covenant but several years late, he left the employer but continued treating its clients.  The company sued him and sought an order preventing him from competing with the provider.  The judge ruled, however, that the requested order would violate Rhode Island public policy.

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An office of Economic Policy Report published in March 2016, entitled “Non-Compete Contracts: Economic Effects and Policy Implications,” estimates that 18% of all workers, or nearly 30 million people, are covered by non-compete agreements, reports Barry J. Waters on the website of Murtha Cullina. The Treasury Department is concerned that the prevalence of these agreements raises important questions about worker welfare, job mobility, business dynamics, and economic growth.

The article reports on the conclusions reached by the Treasury Department.

And it offers five take-aways for lawyers and employers.

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Buying or selling a business is a detail-intensive ordeal, and one of the most crucial parts of the final sales agreement is the non-compete agreement, according to an article posted by Brad Denton of Denton Peterson, PC.

“A non-compete agreement is a contract where the seller agrees not to compete directly with the buyer within mutually agreed-upon parameters. Clearly, any potential buyer is obligated by common sense to have this agreement set in stone before completing a big transaction. If no non-compete agreement is in place, nothing prevents the seller from setting up shop next door with the same product right after the sale is finalized,” the article says.

He covers such topics as geographic limitations, time period restriction, blue pencil rule, step-down provisions, and selling businesses vs. employment contracts.

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A recent case from the Massachusetts Superior Court presents a stark reminder that whether conduct is viewed as a “mere breach” or part of a deceptive or unfair course of conduct can be in the eye of the beholder, writes Shep Davidson in The In-House Advisor blog, published by Burns & Levinson LLP.

“In American Translation Partners, Inc. v. Lahey Clinic Hospital, Inc., ATP entered into a three-year contract with Lahey to provide interpreters to assist Lahey’s medical professionals in their interactions with non-English speaking patients,” he writes. The contract stated that Lahey would not hire interpreters who had worked for ATP within the past 24 months. ATP later sued, claiming Lahey had breached that rule.

The Superior Court wrote:

“Did Lahey intentionally breach the contract and did it do so to either punish ATP or to gain a financial benefit? Persuasive evidence will have to be offered that Lahey knew that it was likely breaching the Services Agreement but decided to do so anyway either as a lever in its ongoing contract negotiations with ATP or to simply reap unfair benefits. On this record, summary judgment in favor of Lahey must be denied.”

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