Delli-Gatti v. Mansfield
| Decision Date | 17 September 1996 |
| Docket Number | A96A1522,Nos. A96A1414,DELLI-GATTI,s. A96A1414 |
| Citation | 223 Ga.App. 76,477 S.E.2d 134 |
| Parties | , 1997-1 Trade Cases P 71,746 v. MANSFIELD. MANSFIELD v. |
| Court | Georgia Court of Appeals |
Don E. Snow, Thomaston, for appellant.
Adams, Barfield, Dunaway & Hankinson, Ronald Barfield, Nancy C. Barfield, Thomaston, for appellee.
In Case No. A96A1414, appellant/defendant Kevin L. Delli-Gatti, M.D. appeals from the order of the superior court declaring unenforceable the non-compete clause in a medical services agreement, entered between appellant and appellee/plaintiff Kathy Mansfield, M.D. In Case No. A96A1522, cross-appellant Dr. Mansfield appeals from the superior court's order, asserting the trial court erred in failing to find the non-compete clause unenforceable because of abandonment of agreement and breach of the agreement by cross- appellee Dr. Delli-Gatti.
This is a suit for declaratory judgment brought by appellee Dr. Mansfield, praying for a declaration of rights as to the enforceability of a non-compete clause in a medical services agreement. The non-compete clause provided the following upon termination of the medical services agreement or the employee relationship created thereby: "Dr. Mansfield ... covenants that she shall not provide pediatric services or other medical care as a physician within Upson County or provide said services at the Upson Regional Medical Center for the twelve (12) months immediately following the said termination." Subsequently, Dr. Mansfield exercised her contractual right to give notice and terminate the agreement.
The trial court made the following pertinent findings of fact: Held:
1. The executed agreement created a contract of employment with a future option to form a partnership in the event certain conditions were met and the partnership terms were agreeable to both parties; at the time the agreement was terminated no partnership had been formed. Unlike a contract in general restraint of trade, a restrictive covenant in an employment contract is considered to be in partial restraint of trade and will be upheld if the restraint imposed is not unreasonable, is founded upon valuable consideration, and is reasonably necessary to protect the interest of the party in whose favor it is imposed, and does not unduly prejudice the interests of the public. Whether the imposed restraint in an employment contract is reasonable is a question of law for court determination, which considers the nature and extent of the trade or business, the situation of the parties, and all the other relevant circumstances. W.R. Grace & Co., etc. v. Mouyal, 262 Ga. 464, 465(1), 422 S.E.2d 529; Dougherty, McKinnon, etc. v. Greenwald, Denzik, etc., 213 Ga.App. 891, 893(2), 447 S.E.2d 94. A " ' "helpful tool" ' " in determining the reasonableness of a particular restraint provision is to apply the three-element test of duration, territorial coverage, and scope of activity. Id. In considering the reasonableness of restrictive covenants in an employer/employee agreement, strict appellate scrutiny is required; whether the restraint was reasonable presents an issue of law. McAlpin v. Coweta, etc., Assoc., 217 Ga.App. 669, 672(1), (2), 458 S.E.2d 499.
2. The record reveals that, while completing her residency in pediatrics, appellee was contacted by representatives of the local Upson County hospital and invited to come to the county to practice medicine; appellee was given three separate career options, only one of which would have resulted in her entering a medical services agreement with and becoming an employee of appellant. Thus, even if her negotiations failed, appellee still had other professional employment options open to her. Further, after appellant's attorney drafted the agreement, appellee reviewed the document and successfully negotiated the amendment of the document so as to change favorably the vacation time to be allotted and the length of time required to obtain a partnership option, and to add certain health and disability insurance benefits. Moreover, although the non-compete clause appeared in the original draft of the agreement, there exists no evidence of record that appellee ever attempted to negotiate this provision or that she objected to its inclusion in the agreement. In fact, appellee testified that appellant had made all the changes to the agreement which she had requested. Appellee admitted in court that she had read and understood the terms of the agreement, and by executing the agreement had agreed to abide by the terms of the non-compete clause. Assuming without deciding whether, as found by the trial court, some degree of disparate bargaining position existed between appellant and appellee, we are satisfied that it was not so significant as to impair appellee's ability to negotiate the terms of the medical services agreement effectively.
3. The duration and territorial coverage limits of the noncompete clause were not unreasonable per se; the elements of duration and territorial coverage were specific and did not deter Dr. Mansfield's ability to determine with certainty the area within which her post-employment activities were restricted and the exact duration of the restriction. The controlling issue is whether the trial court erred in concluding the non-compete clause, because of the scope of its coverage, "was not reasonably necessary for the protection of the defendant" and was overbroad, unreasonable, and unenforceable under the attendant circumstances.
The pertinent portion of the non-compete clause purports to limit, within Upson County, Dr. Mansfield's practice of not only pediatrics but of all "other medical care as a physician." In determining reasonableness, consideration must be given to the employee's right to earn a living. The covenant not to compete was not so restrictive as to deprive Dr. Mansfield of her right to earn a living practicing medicine, except in Upson County for a period of 12 months.
Regarding the provision in the covenant not to compete restricting appellee's use of the Upson Regional Medical Center, the parties in this case have neither argued nor provided citations of authority as to the effect of such a provision, and the record is devoid of any detailed information regarding the location, if any, of other hospitals or medical centers in the counties immediately surrounding Upson County. Thus, on appeal any issue as to the unreasonableness of the provision limiting the use of the medical center has been abandoned. Court of Appeals Rule 27(c)(2).
Viewing the non-compete clause in its totality, we find it reasonable in regard to its relatively limited duration (for 12 months immediately following termination); further, the clause does not limit appellee from practicing any form of medicine and treating any person, whether or not a former patient of appellant, when such medical care is provided other than in Upson County. (Note: Appellant also continues to maintain an active practice in both Pike and Lamar Counties.) Yet in regard to the practice of pediatrics or the providing of medical care as a physician within the boundaries of Upson County, it is...
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