Brief Fact Summary. This case deals with the strong public policy against upholding non-compete clauses in employment contracts, particularly when they may inhibit the physician-patient relationship.
Synopsis of Rule of Law. While a term in an agreement may not be facially unconscionable, it may still be regarded as contra bonus mores, and be considered unenforceable as such.
The determination of reasonableness is a fact-intensive inquiry that depends on the totality of the circumstances.View Full Point of Law
Issue. Can a restrictive covenant be enforced when doing so would inhibit the doctor-patient relationship, in violation of public policy?
Held. No. Reversed. Trial Court’s judgment reinstated.
In reversing the judgment of the intermediate appellate court, the Arizona Supreme Court held that the public policy implications (i.e. restriction on the practice of medicine) outweighed the Plaintiff’s protectable interest the restrictive covenant. Particularly, any covenant restricting the practice of a physician also has a negative impact on a patient who is depending on that physician. Therefore, while a restrictive covenant may protect the interest of an employer, it will not be upheld to the extent that it prejudices the interest of a patient.
Discussion. When a non-compete agreement applies to a physician, it can have the impact of restricting the practice of medicine, which can be adverse to a patient. Such a restrict covenant will be enforceable to the extent that it does not affect an innocent third party, but not beyond that threshold.