Summary
The court had three realistic options in addressing the legality of the noncompete agreement between a physician and his private employer: (1) it could have evaluated the covenant as it would any other commercial noncompete agreement to examine if it were reasonable under the circumstances;6 (2) it could have applied a special level of scrutiny, specifically for physician noncompete agreements,7 or (3) it could have invalidated the agreement as a violation of public policy.8 The Tennessee Supreme Court, relying primarily upon public policy, patient access to healthcare, and the American Medical Association Code of Medical Ethics, held that such agreements are "unenforceable and void" unless specifically protected by statute.9 In making this decision, the court created a bright-line rule prohibiting noncompete agreements between physicians and thek private employers.
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Extract
Contracts-Murfreesboro Medical Clinic, P.A. V. Udom: Physician Noncompete Agreements Go Under the Knife: The Tennessee Supreme Court Rejects Physician Noncompete Agreements
I. INTRODUCTION
"Public policy is a very unruly horse. Once you get astride it, you never know where it will carry you."1In Murfreesboro Medical Clinic, P.A. v. Udom,2 the Tennessee Supreme Court, relying on public policy, banned noncompete agreements between physicians and their private employers.3 In Udom, a physician signed an employment agreement with a private medical practice that contained a noncompete provision.4 The provision provided that upon termination of the employment agreement the physician would not "engage in the practice of medicine within a twenty-five mile (25) radius of the public square of Murfreesboro, Tennessee for a period of eighteen (18) months."5The court had three realistic options in addressing the legality of the noncompete agreement between a physician and his private employer: (1) it could have evaluated the covenant as it would any other commercial noncompete agreement to examine if it were reasonable under the circumstances;6 (2) it could have applied a special level of scrutiny, specifically for physician noncompete agreements,7 or (3) it could have invalidated the agreement as a violation of public policy.8 The Tennessee Supreme Court, relying primarily upon public policy, patient access to healthcare, and the American Medical Association Code of Medical Ethics, held that such agreements are "unenforceable and void" unless specifically protected by statute.9 In making this decision, the court created a bright-line rule prohibiting noncompete agreements between physicians and thek private employers.The court, however, could have achieved the same objectives without making such a harsh rule. First, rather than filling the perceived legislative silence with its own view and infringing upon the Legislature's domain, the court could have allowed the Tenn...See the full content of this document
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