MIAMI NON-COMPETE AGREEMENTS: PUBLIC POLICY EXCEPTION TO ENFORCEMENT BASED ON CONTINUITY OF PHYSICAN CARE

Physicians have sometimes challenged their non-compete agreements on the grounds that continuity of patient care is an “overriding public policy reason.” Physicians have argued that public policy allows the physician to care for his patients after termination of his employment, even when the wording of the restrictive covenant bars the physician from continuing to treat those patients. Over the years, Florida courts have wrestled with this issue. Florida non-compete covenant law has changed over the years based on various statutes that were re-written and amended. Florida’s statutory scheme governing restraints on competition significantly changed on July 1, 1996, the effective date of Florida’s current non-compete statute. Peter Mavrick is a Miami non-compete attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm also represents businesses and their owners in business litigation (including claims of breach of contract and related claims of fraud and other business torts), trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state trial courts, appeals, and in arbitration.

Under Florida law, a trial court that refuses to enforce a restrictive covenant based on public policy must specify in its findings the compelling reasons why enforcement is not in the public interest. In TransUnion Risk and Alt. Data Sols., Inc. v. Reilly, 181 So.2d 548 (Fla. 4th DCA 2015), Florida’s Fourth District Court of Appeal explained that “[u]nder section 542.335(1)(i)[Florida Statutes], a trial court must specifically articulate an overriding public policy reason if it refuses to enforce a non-compete covenant based on public policy grounds.”

In the recent case Joseph Spine, P.A. v. Moulton, M.D., 346 So.3d 154 (Fla. 2d DCA 2022), a physician, Dr. Moulton, sought to avoid compliance with his non-compete contract on the grounds that the non-compete violates public policy. Dr. Moulton, had been employed by a Joseph Spine, P.A. and argued he should be released from his non-compete covenant, at least with respect to his right to continue to serve patients to whom he had provided medical services before ending his employment with Joseph Spine, P.A. Dr. Moulton, argued that “continuity of care is an ‘overriding public policy reason’” and used as an example a particular patient “who was dissatisfied with his care at Joseph Spine and elected to leave that practice.” The appellate court referenced the fact that the the trial court Judge had “expressed concern at the [court] hearings … that enforcing the restrictive covenants would adversely affect patients’ continuity of care, freedom in choosing physicians, the bearing of risk between physicians after surgery, and the proximity of follow-up care for patients relative to where their procedures were performed.” The appellate court did not agree with the trial Judge, explaining that “despite the trial court’s findings that its public policy concerns were limited to ‘this case, with these facts,’ the record does not indicate any unique or special circumstances distinguishing continuity of care with the patients affected here from other patients who are generally affected by restrictive covenants enforced against physicians practicing in Florida.” Section 542.335(1)(i), Florida Statutes requires a trial court to explain why a patient’s continuity of care “substantially outweighs” Florida’s long-established precedent of protecting legitimate business interests. The appellate court’s decision in Moulton relied on its observation that “the trial court’s brief mention of protecting patients’ continuity of care does not explain why this concern substantially outweighs enforcement of the restrictions against Dr. Moulton.” Accordingly, the appellate court in Moulton reversed the trial Judge’s decision and entered a temporary injunction barring Dr. Moulton from competing against his former employer.

The Moulton decision left open the possibility for physicians to argue for release from their non-compete agreements on public policy grounds. In this regard, Moulton explained, “Dr. Moulton failed to present evidence that patients in this geographic area are underserved or otherwise unable to obtain the healthcare he provides.” The Moulton decision makes clear that there have to be unique or special circumstances to use public policy as a persuasive legal basis for overriding physician restrictive covenants.

Peter Mavrick is a Miami non-compete lawyer, and represents clients in Fort Lauderale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.