Granger v. Craven
| Citation | 199 N.W. 10,159 Minn. 296 |
| Decision Date | 09 May 1924 |
| Docket Number | 23,895 |
| Parties | CHARLES T. GRANGER v. LAWRENCE L. CRAVEN |
| Court | Supreme Court of Minnesota (US) |
Action in the district court for Olmsted county to restrain defendant during the pendency of the action and permanently from engaging in the practice of medicine and surgery in the city of Rochester and within 20 miles thereof for a term of three years. From an order, Callaghan, J., granting a temporary injunction, defendant appealed. Affirmed.
Covenant by assistant not to compete with employer, in case former leaves, reasonable.
1. It is but a reasonable protection of a legitimate interest for a professional man, about to employ another in such manner as to give him access to the acquaintance and confidence of patients, to require of the employe a covenant not to enter into competition with the employer for a reasonable time after the relationship is terminated.
Such covenant may be enforced by injunction.
2. Where, in such a case, the assistant covenants, in the event of the termination of the employment, not to open an office in the same city (containing not over 20,000 population), nor within 20 miles thereof, for a period of 3 years, the protection afforded the employer's good will is reasonable and the covenant may be enforced by injunction.
When irreparable damage will be presumed from breach of covenant.
3. Where a professional man is employed to take over an entire department of the employer's practice, it is so clear that he will acquire the confidence and adherence of many of the patients that irreparable damage to the employer will be presumed to arise from the employe's breach of his covenant not to establish a competing practice for a period of 3 years after the termination of the employment.
Relief granted notwithstanding right of either party to terminate contract.
4. Relief in such a case will not be denied because the employer had the right to terminate the contract at any time upon 30 days' notice, the employe having the same right and the contract having been performed and the employment under it continuing for over two years.
Oscar C. Ronken and A. J. Rockne, for appellant.
Granger & Clemens, for respondent.
Defendant appeals from an order granting a temporary injunction restraining him "from engaging in the practice of medicine and surgery, or any of the branches thereof, either directly or indirectly * * * in the city of Rochester Minnesota, or within twenty miles thereof."
Both plaintiff and defendant are physicians and surgeons. For nearly 30 years, plaintiff has been engaged in the practice of his profession in Rochester, a city of not over 20,000 population. There and in the adjacent territory he has an extensive practice. For some time it has been his custom to employ other physicians and surgeons as his assistants.
On August 29, 1921, defendant entered his employ under a written contract whereby he was to take charge of the ear, nose and throat department in plaintiff's office; perform all services that might be required therein, and devote his entire time and attention thereto; plaintiff to provide office room, instruments and other equipment. In consideration of the performance of the contract by defendant, plaintiff agreed to pay him, as collected, 50 per cent of the receipts from that department. The contract was subject to termination by either party on 30 days' written notice. It further stipulates, and out of this provision this suit arises, that defendant, after the termination of the contract, would not engage in the practice of medicine or surgery, or any of the branches thereof, directly or indirectly, or as an employe of any one else in Rochester, nor within 20 miles thereof, for 3 years after such termination.
The complaint charges that defendant entered upon the performance of the contract and treated many of plaintiff's patients; made many outside calls, not only within his specialty but for patients suffering from other ailments, and continued in that work continuously until October 1, 1923, having treated more than 3,000 patients during that period. On September 26, 1923, plaintiff served notice of the termination of the contract. On Octotber 2, following, defendant left plaintiff's employ and immediately opened an office in Rochester for the practice of medicine and surgery, and, it is alleged, "caused advertisements thereof to be inserted in the daily papers" of the city of Rochester, and, again quoting from the complaint, "has been and still continues to be engaged in the practice of medicine and surgery thereat."
There being no denial of these averments, the learned trial judge ordered a temporary injunction. The appeal from the order seems to present the whole case on its merits. Counsel for appellant take position squarely upon the argument that, notwithstanding the contract, "plaintiff is not entitled to be protected against competition by defendant," and that all that he should have is protection "against the misuse by defendant of some advantage obtained by him while in" plaintiff's employ.
Thus there is presented this single question: May a physician and surgeon, having a long-established practice, condition his employment of an assistant by requiring the latter, in the event of a termination of the employment, to refrain for a reasonable period from entering into competition with him? The case for appellant is put thus:
We cannot take that view of this case. We cannot agree that public policy so limited plaintiff's right to say on what conditions he would admit defendant to his employment. We decline to adopt a rule so abridging the right of contract, which is no small part of the liberty of the citizen. We do not so far forget that the usual and most important function of courts of justice is rather to maintain and enforce contracts than to enable parties thereto to escape their obligation on the pretext of public policy, unless it clearly appears that they contravene public right or the public welfare. James Quirk Milling Co. v. Minneapolis & St. L.R. Co. 98 Minn. 22, 107 N.W. 742, following Baltimore & O.S.W. Ry. Co. v. Voight, 176 U.S. 498, 20 S.Ct. 385, 44 L.Ed. 360.
We consider that public policy requires the enforcement of this contract as the parties wrote it rather than judicial permission for another surgeon to practice in Rochester. Public policy cannot be said very emphatically to demand the latter result.
Courts scrutinize carefully all contracts limiting a man's natural right to follow any trade or profession anywhere he pleases and in any lawful manner. But it is just as important to protect the enjoyment of an establishment in trade or profession, which its possessor has built up by his own honest application to every day duty and the faithful performance of the tasks which every day imposes upon the ordinary man.
What one creates by his own labor is his. Public policy does not intend that another than the producer shall reap the fruits of labor. Rather it gives to him who labors the right by every legitimate means to protect the fruits of his labor and secure the enjoyment of them to himself. Eureka Laundry Co. v. Long, 146 Wis. 205, 131 N.W. 412, 35 L.R.A. (N.S.) 119.
In this case we must assume that, when the contract was made, plaintiff had a very substantial practice and the good will of many patients; that, in Rochester and vicinity, he enjoyed a professional establishment of a profitable nature -- the result of nearly 30 years of professional effort. It was an establishment, the maintenance of which was dependent entirely on the continued good will of patients and their consequent adherence to plaintiff.
It is obvious, therefore, that, when he employed defendant as an assistant, plaintiff had a legitimate interest to protect. The presence of such an interest is the first thing to look for when such a contract as this is challenged. Its presence is necessary to uphold the agreement and make it enforceable in equity or at law. Kronschnabel-Smith Co. v. Kronschnabel, 87 Minn. 230, 91 N.W. 892; Williams v. Thomson, 143 Minn. 454, 174 N.W. 307; Mandeville v. Harman, 42 N.J.Eq. 185, 7 A. 37.
The only other inquiry is whether, plaintiff having a legitimate interest to protect, the protection given is itself legitimate, i. e., reasonable. There should be no question there. As to time, a limit of 3 years is...
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