Valley Medical Specialists v. Farber
982 P.2d 1277 · Arizona Supreme Court · 1999
Facts
Dr. Steven Farber, a pulmonologist, left Valley Medical Specialists (VMS) and began practicing within the geographic and temporal scope of a restrictive covenant in his employment agreement. VMS sought an injunction to enforce the covenant, which prohibited Dr. Farber from providing any medical care to former patients within a 5-mile radius of VMS offices for three years. The trial court found the covenant unreasonable and against public policy, but the court of appeals reversed, modifying the covenant to make it enforceable.
Issue
Is a restrictive covenant between a physician and a medical group enforceable when it restricts the physician's ability to practice medicine, considering public policy concerns and the covenant's scope?
Holding
No, the restrictive covenant between Dr. Farber and VMS is not enforceable. The court vacated the court of appeals' opinion and affirmed the trial court's judgment, finding that public policy concerns outweighed VMS's protectable interests.
Rule
Restrictive covenants between physicians are strictly scrutinized due to strong public policy concerns regarding patient care and choice. Such covenants are unenforceable if they are greater than necessary to protect the employer's legitimate interests or if those interests are outweighed by the hardship to the employee and the likely injury to the public. Courts will not rewrite overly broad covenants to make them enforceable.
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