Physician Partners of America and its top executives agreed to pay $3.3 million to settle allegations that they violated non-compete contract provisions when the surgery center operators hired physicians from area competitors.
Surgery Partners, which operates Tampa Pain Relief Center and Armenia Ambulatory Surgery Center, sued Physician Partners of America after it hired four of its doctors in late 2018 and early 2019. Physician Partners of America and two of its top executives will have to pay its competitors for hiring their former employees while under non-compete contract provisions. A settlement agreement was reached prior to the mid-January injunction hearing and paid Feb. 3.
Non-compete clauses typically restrict physicians from working for competitors within a 15-mile or 25-mile radius for a certain period of time. But the terms of these provisions were unique in that they prevented former employees from working for any competitor that had facilities within a 15-mile radius of their old office, said Alan Rosenthal, lead counsel for Surgery Partners.
"This is the first time a non-compete with that kind of language was enforced by an appellate court," he said, noting the trend of large umbrella companies consolidating physician groups across the country.
The Physician Partners of America did not reply to immediate requests for comment.
Non-compete contract clauses continue to be a focus for state and federal regulators who look to crack down on anticompetitive hiring schemes. President Joe Biden issued an executive order last year that, in part, aims to curtail the use of non-compete clauses in employment agreements, arguing that they could suppress wages.
Florida implemented a law in 2020 that bans non-compete contract provisions in markets, often rural, that have few competitors. Florida state laws tend to favor employers, legal experts said.