LEGAL
Anti-Solicitation Clauses in Physician Contracts Tying enforcement to patient choice BY JOSEPH M. GORRELL
Restrictive covenants, meant to protect the employer, may
be included in a
physician’s employment agreement. These covenants:
usually restrict the physician from practicing within a defined geo- graphic area during and after the term of the contract for a period of years;
prohibit the physician from solicit- ing employees of the practice to join him or her at the new practice;
often specify that the medical records of the practice are the property of the practice and may not be removed from the practice by the physician. Typically, such restrictive covenants
have been accepted by the courts, how- ever, their enforcement has been held to be subject to proof of a legitimate business purpose and the absence of undue harm to the departing physician. In the seminal case of Karlin v. Wein- berg, 77 N.J. 408 (1978), the Supreme Court of New Jersey permitted phy- sician restrictive convenants by a 4-3 vote but required trial judges to weigh equitable factors in deciding whether to enforce the covenant. In addition to geographic restric- tions and anti-solicitation clauses relating to employees, employers often include provisions that prohibit solic- itation of patients post-termination. These can be more problematic as they beg the question: Are such pro- hibitions enforceable? A recent case illustrates the problem and the impor- tant issues that employment attorneys must consider. It concerns three urolo- gists who were members of a single- specialty medical practice comprising five offices.
The three physicians announced that they were leaving their existing prac-
12 ASC FOCUS OCTOBER 2015
tice and joining a large multi-specialty group. Their employment agreements at the single-specialty practice con- tained anti-solicitation provisions that prohibited them from soliciting patients from the practice they were leaving (the Medical Practice). The language of the anti-solicitation provi- sion was broad, prohibiting solicitation “directly or indirectly.” The employ- ment agreement, however, did not pro- hibit them from “notifying” patients of their new location and contact infor- mation. This raised two questions: 1. Was notification of patients tanta- mount to solicitation? Solicitation commonly means when one party asks another to do something; in this context it is asking the pa- tient—the recipient of the com- munication—or the referring phy- sician to utilize the services of the physician. Notification connotes
communication of information to a recipient. The Medical Practice maintained that notification of the departing physicians’ contact in- formation constituted solicitation because its purpose was to attract patients to the new practice. The departing physicians contended that they had every right to pro- vide their new contact information as long as they did not request that those patients take an action, such as schedule an appointment or re- quest that their medical records be transferred to the other group.
2. If we assume that notification was tantamount to solicitation, was the anti-solicitation provision en- forceable? Because the case arose in New Jersey, the Karlin case and its progeny were the seminal cases fundamental to the determination of that question.
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