Part B Insider (Multispecialty) Coding Alert
Non-Compete Keeps Physician From Setting Up Office Across The Street
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Court rules that doctor can't work within 25 miles of old stomping ground
If you're hiring a physician and you're concerned that he or she may run away with your favorite patients, you have a recourse.
Medical offices can hold doctors to the terms of non-compete agreements the doctors sign, the Nashville, TN Court of Appeals ruled in Murfreesboro Medical Clinic v. David Udom (M2003-00313-COA-R9-CV). Udom signed up for two years at the clinic and agreed to a non-compete saying he wouldn't practice medicine within 25 miles of the clinic for 18 months after leaving.
But Udom was allowed to compete as long as he paid the clinic twelve times his most recent monthly salary. The chancery court granted an injunction enforcing the non-compete but also ruled that Udom could pay the clinic and keep practicing in his new office 15 miles away.
Udom appealed, insisting the injunction was unfair and the non-compete was unenforceable. The appeals court struck down the injunction, since the non-compete already allowed Udom to pay his way out of it. But the appeals court also ruled that the clinic had a genuine business interest in keeping Udom from practicing nearby and Udom had proved he wasn't beset by economic hardships by coughing up his salary.
Finally, the court ruled that while the right of patients to choose their own doctor is an important one, so is the clinic's right to protect its business. So the non-compete wasn't unenforceable, the court insisted.
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Non-Compete Keeps Physician From Setting Up Office Across The Street
Court rules that doctor can't work within 25 miles of old stomping ground
If you're hiring [...]