More physician employment means more breakup disputes

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.”