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From: cosy
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Re: [Subject]

Synopsis of the Case

After receiving a doctorate in medicine in May 2008, Doctor Elizabeth Blackwell was

offered a chance to work with Neurological Associates, LLC. This offer transformed

into employment opportunity seeing her start working as an employee with Neurological

Associates on June 1, 2008. Blackwell received a notification, a month after hiring, from

Neurological Associates through their primary contact, Dr. Richard Cohn, requiring her

to sign a standard Restrictive Covenant and Noncompete Clause. To Blackwell,

reviewing the addendum by a lawyer before the signing was crucial, but before that,

Cohn pressurized her into signing it before the end of the day or else her payroll would

not be released. Blackwell decided to leave Neurological Associates after going through

various hardships. In March 2013, Blackwell stated in a notice of leaving the practice in

sixty days and join Galway Hospital instead. Galway Hospital was Neurological

Associates’ competitor practice located to the north. In reply to the Blackwell’s notice,
NA responded through Cohn, stating acceptance of her resignation but reminded her of

responsibilities she withheld under her contract with NA preventing her acceptance to

Galway hospital’s position due to her sign on the Restrictive Covenant and Noncompete

Clause.

Synopsis of Phillip Bayliss, M.D. v. Wellspan Hospital and Medical Group.

This marks the leading restrictive covenants and Noncompete agreements’ case in

Longville state for medical practices. Phillip Bayliss, an OB/GYN services’ specialist,

had a Wellspan Hospital’s sign on a restrictive covenant. Wellspan Hospital is not-for-

profit healthcare with its Longville state. As per the agreement, Bayliss had an

agreement of not engaging in medical practice for five years after separation in Columbus

Country, the location of Wellspan. Wellspan invested over $1MM in practice of Bayliss

during his time. There was deterioration in the relationship between the two after four

years which led to the resignation of Bayliss from Wellspan and later opening his practice

of OB/GYN only a few miles away from Wellspan practice. According to the

determination of the Longville state Supreme Court, the restrictive covenant of Wellspan

against Bayliss was found enforceable.

Synopsis of Regional General Hospital v. Anaesthesiology Associates, Inc.

Both certified registered nurse anaesthetists and physicians are employable by the

Anaesthesiology Associates, Inc. An agreement of the provision of services to Regional’s

patients between AAI and Regional General Hospital was made. A post-employment

restrictive covenant was contained in the AAI’s agreements which had a prohibition on

employees from contract signing with any facility which provides services of AAI then or

else had provided such services previously. The enforcement of the agreement was two

years and one year respectively. From this period, separation of an employee from

Anaesthesilogy Associates, Inc. followed after that. Several employees from AAI were

sought after by Regional after the expiry of the agreement between AAI and Regional

General Hospital. Regional Hospital filed the suit against AAI with a statement of their

unenforceable restrictive covenant-keeping in mind of AAI’s restrictive covenant with its

employees. After hearing the case on both sides, the case was ruled in favour of AAI and

ultimately lost to Regional General Hospital.

Potential Legal Issues

Legitimate Business Interest

According to the statement of Wellspan at Point (a), that the Longville state, “ will

enforce a restrictive covenant only if it is reasonably necessary to protect the legitimate

interests of the employer..” The signed agreement by Blackwell may be described as

enforceable nonetheless, although she was forced by Cohn to sign the noncompete clause

and the restrictive covenant. A look of the required threshold as Wellspan states at Point

(b), “ the legitimate interests of an employer as recognized by the Longville courts are,

trade secrets/confidential information, customer goodwill, or investments in the

employee.” There was a less monetary investment into Blackwell by Neurological

Associates, LLC unlike the case of Wellspan v. Bayliss, where there was a sizeable

investment in terms of money by Wellspan into Bayliss and his practice. Provision of $

1000 for a course to cater to Blackwell’s certification onboard and paid leave was the

only NA’s investment in Blackwell. Besides, Blackwell had no trade secrets through

Neurological Associates.

Medical Practice Referral Base

An Excerpt (c), referral base is protected interest as Wellspan states, “protecting the

investments required to develop such a base is consistent with (Wellspan’s) holding.”

The referral bases for a patient are integral and “analogus to a physician’s patient

relationship.” NA paid Blackwell in order to accompany Valjean and Cohn at a medical

conference in the Blackwell’s one month in employment at Neurological Associates. In

anticipation of the expansion of NA’s referral base, Blackwell was introduced to a

massive crowd of physicians by Cohn and Valjean.

Threshold Balancing Test.

Meeting the above stated protectable business interests, analysis of and application of the

two balancing test as per Wellspan as stated in Point (d). Are “the employee and

employer’s interests (lying) with public interests?” Lack of public harm and no evidence

in lack of OB/GYN in the located area led to enforcement of the restrictive covenant and

failure of Bayliss, as stated in the excerpt (d2). Substantial shortage of neurologists in the

region of the southwest of Longville state influenced the interests of Galway Hospital to

hire Blackwell. Blackwell declined a colossal sum of money from Galway believing

working with them would be impossible due to the signed restrictive covenant.

Protection of Reasonably Necessary Interests

According to Regional’s Point ( b), a restrictive covenant may be termed unenforceable

“if an employer does not compete in a particular geographic area” meaning, “any

restriction that is overly broad in geographic scope…renders (the covenant)

unenforceable. ” Blackwell agreed with not signing any competitor or provider to NA

within a radius of fifty miles of the location of NA’s practice as per the restrictive

covenant between Neurological Associates and Blackwell. The entire region of the

southwest of Longville is included in the fifty radius mile radius meaning Galway
Hospital is included in this location since its 20 miles north of NA’s location of practice

and at the largest city of Galway in Longville.

Conclusion of the Case

Various instances are available constituting enforceability of the actions taken by

Blackwell and restrictive covenant and signed with Cohn on NA’s behalf in the case of

Neurology Associates, LLP v. Elizabeth Blackwell, M.D. Despite Cohn coercing

Blackwell into the signing of the agreement; it is critical to note the enforceability topics

of the agreement. The case’s outcome summarizes these discussion topics. The topics

include; business interests withheld by NA in the agreement is upholding, the effect of

the outcome of the case on referral base of the medical practice, protection of the

practice’s reasonable interests by NA and level of satisfaction of the tests following

application of threshold balancing test.