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injunctionappealtrialwill
appealtrialwill

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Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277, 15 IER Cases 419, 298 Ariz. Adv. Rep. 34

Facts

In 1985, Valley Medical Specialists (VMS) hired Dr. Steven Farber, who later became a shareholder and director. In 1991, a restrictive covenant was included in his employment agreement, which prohibited him from practicing medicine within a five-mile radius of VMS for three years after leaving. After Dr. Farber left VMS in 1994 and began practicing within the restricted area, VMS sought a preliminary injunction to enforce the covenant, which the trial court denied, finding it overly broad and against public policy.

In 1985, Valley Medical Specialists (VMS) hired Dr. Steven Farber, who later became a shareholder and director. In 1991, a restrictive covenant was included in his employment agreement, which prohibited him from practicing medicine within a five-mile radius of VMS for three years after leaving.

Issue

Is the restrictive covenant between Dr. Farber and Valley Medical Specialists enforceable under Arizona law?

Is the restrictive covenant between Dr. Farber and Valley Medical Specialists enforceable under Arizona law?

Rule

Covenants not to compete between physicians will be strictly construed for reasonableness, and such restrictions must not be greater than necessary to protect the employer's legitimate interests without causing undue hardship to the employee or injury to the public.

Covenants not to compete between physicians will be strictly construed for reasonableness, and such restrictions must not be greater than necessary to protect the employer's legitimate interests without causing undue hardship to the employee or injury to the public.

Analysis

The court analyzed the restrictive covenant's reasonableness by considering the public policy implications of restricting a physician's ability to practice medicine. It found that the covenant was overly broad, covering all forms of medical care and not limited to Dr. Farber's specialty. The court emphasized that the public's right to choose their physician and the potential harm to patients outweighed VMS's interests in enforcing the covenant.

The court analyzed the restrictive covenant's reasonableness by considering the public policy implications of restricting a physician's ability to practice medicine. It found that the covenant was overly broad, covering all forms of medical care and not limited to Dr. Farber's specialty.

Conclusion

The Supreme Court of Arizona concluded that the restrictive covenant was unenforceable and vacated the court of appeals' decision, affirming the trial court's judgment.

The Supreme Court of Arizona concluded that the restrictive covenant was unenforceable and vacated the court of appeals' decision, affirming the trial court's judgment.

Who won?

Dr. Steven Farber prevailed in the case because the court found that the public policy implications of the restrictive covenant outweighed the interests of Valley Medical Specialists.

Dr. Steven Farber prevailed in the case because the court found that the public policy implications of the restrictive covenant outweighed the interests of Valley Medical Specialists.

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