Restrictive Covenant Between a Doctor and His Professional Corporation
In Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999) a case invalidating a restrictive covenant between a doctor and his professional corporation, our supreme court analogized the medical profession and a patient's right to the doctor of his/her choice to the legal profession and a client's right to the attorney of his/her choice. Id. at 368-69, PP16-18, 982 P.2d at 1282-83.
The court concluded that public policy required that the special doctor-patient relationship, like the attorney-client relationship, was entitled to unique protection, and could not be unduly restricted. Id. at 369, P19, 982 P.2d at 1283.
In Valley Medical, the Arizona Supreme Court analyzed a restrictive covenant between Steven Farber, a doctor, and the professional corporation where he worked, Valley Medical Specialists ("Valley Medical").
That covenant precluded Dr. Farber from competing with Valley Medical for three years within a five mile radius of any of the corporation's offices, and also prohibited him from asking any present or future patients of Valley Medical to leave Valley Medical, from disclosing the identity of those patients to other Valley Medical competitors, and from providing medical care to any of Valley Medical's former patients. Id. at 365, P3, 982 P.2d at 1279.
The agreement allowed Valley Medical to obtain an injunction against Dr. Farber, as well as liquidated damages, for any violation of those restrictions. Id.
Accordingly, the agreement restricted Dr. Farber's right to practice medicine.