More physician employment means more breakup disputes

Thu Sep 1 21:04:46 PDT 2016

July 30, 2016

More physician employment means more breakup disputes

Modern Healthcare

By Lisa Schencker

Like many physicians, Rhode Island gerontologist Dr. Shahzad Khurshid agreed
to certain conditions when he began working for his former practice.

Khurshid agreed in 2009 that when his employment at Medicine and Long Term
Care Associates ended, he would not solicit the practice's employees or
patients for two years or cause any of its employees or patients to leave
the practice, according to court documents.

But after Khurshid left the group in 2014, several of its retirement center
clients decided to leave as well, said his lawyer, Kathleen Hagerty.
Khurshid continued working at those facilities, prompting his former
practice to sue him in state court.

The court sided with Khurshid in March of this year, refusing to keep him
from working with the practice's former clients while the case played out.
The judge wrote that "the strong public interest in allowing individuals to
retain healthcare service providers of their choice" outweighed the benefits
of the noncompete agreement.

Legal experts say similar battles between doctors and their employers are
playing out across the country as physician employment increases and
providers continue to consolidate.

"The graph has gone to a 90-degree angle of increase in the volume of
noncompete and nonsolicitation agreements and disputes over them," said
Joseph Maya, a managing partner at Maya Murphy in New York and Connecticut
who works with employers and employees in such disputes.

The majority of physician employment contracts now contain noncompete and/or
nonsolicitation clauses, he said.

The agreements often say how long a doctor must wait after leaving an
employer before practicing within a certain geographic area that could put
the doctor into competition with a former employer.

Jonathan Pollard, a competition lawyer in Fort Lauderdale, Fla., said
litigation over noncompetes in all types of professions has increased
significantly in the past 15 years, including in healthcare.

"You have these big systems going around gobbling up smaller practices, and
these larger systems are several things." Pollard said.

"No. 1, they're very well capitalized. Two, they're lawyered up. Three,
they're go-ing to protect their interests by any means necessary."

Even when employers don't want to go after doctors for violating the terms,
they often feel they should to avoid setting a precedent, said Maureen
Carlson, a partner at Jux Law Firm in Minneapolis who represents employers
and employees. "Your previous lethargy can hurt you in any subsequent
lawsuit you want to bring forth," she said.

Carlson said legal disputes over the agreements often can be resolved
between attorneys without actually going to court. And many of the disputes,
she said, don't involve physicians who work too close to their former
employers.

Rather, they're about what doctors are allowed and not allowed to tell
patients when they leave a job. "I've seen disputes over wording in a
letter, timing of letters, letting patients know what's going on," she said.

When the disputes do go to court, however, their outcomes can vary largely
based on the laws in their particular states, said Robert Horton, head of
the labor and employment practice at Bass Berry & Sims. California, for
example, generally doesn't enforce noncompete agreements between employers
and employees while Tennessee is among the stricter states, he said.

Courts also see disagreements over noncompetes as different from other types
of contract disputes, Horton said. In a normal contract dispute, a court
tries to decide what the parties intended.

But in disputes over noncompetes, courts often weigh a number of issues,
such as whether the business or company trying to enforce the noncompete
really needs protection and whether, as the judge concluded in Khurshid's
case, enforcing a physician noncompete would affect patient care or access
to medical services.

"These are end-of-life patients and continuity of care is crucial to them
both emotionally and just to ensure they get the care they deserve," said
Hagerty, Khurshid's lawyer. Neither the practice nor its attorney responded
to requests for comment. The case over whether Khurshid's noncompete
agreement is valid and enforceable and whether the practice is entitled to
any damages is ongoing.

In ruling on the injunction, however, the judge "chose to agree with us that
the patients' right to choose to have a physician of their choosing was
important and it superseded anything this noncompete may have provided for."

That's not to say, however, that other judges would agree with that
reasoning. "Courts have become more accustomed to enforcing noncompete
agreements," Horton said. "They've become more routine in states where
they're enforceable."

Jeff Wells
Deputy Editor, CAL/AAEM News Service

Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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