LEGAL
Restrictive Covenants versus Public Interest
Karlin and a subsequent decision of the court rendered in a separate case, The Community Hospital Group Inc. v. More, 183 N.J. 36 (2005), indicate that restrictive covenants will not be enforced if enforcement would be con- trary to the public interest. In Karlin, the court said that issues
such as the demand for services ren- dered by a departing physician, the like- lihood that other physicians can provide the service and the ability of existing patients to continue treatment should all be considered. (77 N.J. at 424.) In More, the court specifically lim- ited the breadth of the restrictive cov- enant because the hospital where the departing physician was
practicing
was in need of his neurosurgical ser- vices. In this case, the public interest at stake was the patient’s right to choose the physician who would deliver his or her medical care.
In the interest of the patient’s right, counsel for the departing physicians had two potential courses of action: 1) to advise the physicians to notify their patients of their new contact informa- tion and face an action by the Medi- cal Practice; or 2) to file a declaratory judgment action in the Superior Court asking a judge to declare that notifica- tion was appropriate. The counsel rec- ommended the latter and the departing physicians agreed. To impress the court with their good
faith, the verified complaint and order to show cause that the physicians submit- ted to the court asked the court to order the Medical Practice to send written notice of the departing physicians’ new contact information to the patients they had treated previously, instead of asking to send the letter themselves. On court day, the judge called the attorneys into his chambers before hearing arguments
14 ASC FOCUS OCTOBER 2015
In the matter of enforcement of anti-solicitation clauses, enforcement should be subject to the overriding principle of patient choice.”
—Joseph M. Gorrell, Brach Eichler LLC
and convinced the parties to mediate their dispute.
At the mediation, the Medical Prac- tice initially took the position that:
if a patient contacted the practice asking for an appointment with one of the departing physicians, it would provide the new contact information;
the departing physicians had no right to contact their patients because of the anti-solicitation provision; and
the Medical Practice had no obliga- tion to notify the patients. Recognizing that patients have a right to know how to contact their physicians, however, the Medical Practice’s position against informing the patients was nixed. The parties reached a mediated agreement as fol- lows: 1) the Medical Practice would send a letter to patients treated pre- viously by the departing physicians stating that they could obtain those physicians’ contact information by calling the medical practice; 2) the departing physicians would cover the cost of sending the letter; and 3) any patient who contacts the Medi- cal Practice to seek treatment by a departing physician would be given the new office address and telephone number of that departing physician. The mediation agreement, how-
ever, did not address whether the departing physicians could call the patients they had treated previously; nor did it prohibit the Medical Prac- tice from soliciting the patients treated previously by the departing physicians. In addition, there was nothing in the agreement regarding
sanctions if the Medical Practice did not provide the contact information for the departing physicians when requested by a patient. After the physicians departed, all of those issues arose and caused consid- erable confusion for the patients as:
the Medical Practice solicited the patients in hopes of diverting them away from the departing physicians; and
when patients called to schedule appointments with one of the depart- ing physicians, the Medical Practice attempted to schedule appointments with a remaining physician. Initially, the Medical Practice also
provided the departing physicians’ contact information only when the patient was persistent. Only after coun- sel strongly demanded adherence to the terms of the mediation agreement did this conduct cease.
In the matter of enforcement of anti- solicitation clauses, enforcement should be subject to the overriding principle of patient choice. Notwithstanding the financial interests of the physician, the public interest demands that when a phy- sician leaves a medical practice, patients are informed of their physician’s new location and contact information so that the patient’s right to be cared for by the physician of his or her choice, and the continuity of the patient’s care, are respected and retained.
Joseph M. Gorrell is a member at Brach Eichler LLC,
www.bracheichler.com, within its Health Law Department. Write him at
jgorrell@bracheichler.corn.
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