Michael I. Weintraub, M.D., P.C. v. Schwartz

• Decision Date: 15 June 1987
• Citation: 516 N.Y.S.2d 946,131 A.D.2d 663
• Parties: MICHAEL I. WEINTRAUB, M.D., P.C., et al., Appellants, v. Kenny SCHWARTZ, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 946

516 N.Y.S.2d 946

131 A.D.2d 663

MICHAEL I. WEINTRAUB, M.D., P.C., et al., Appellants, v. Kenny SCHWARTZ, Respondent.

Supreme Court, Appellate Division Second Department.

June 15, 1987.

Walsh Maroney and Ponzini, Tarrytown (Matthew D. Arkin, of counsel), for appellants.

John M. Hockfelder, New York City, for respondent.

Before MOLLEN, P.J., and BRACKEN, NIEHOFF and LAWRENCE, JJ.

MEMORANDUM BY THE COURT.

In an action for a permanent injunction and damages based on the alleged breach of a covenant not to compete, the plaintiffs appeal from an order of the Supreme Court, Westchester County (Martin, J.), entered October 3, 1986, which denied their motion for a preliminary injunction.

ORDERED that the order is affirmed, with costs.

The plaintiffs herein, both professional corporations, have been engaged in the practice of neurology in the area of Westchester and Putnam Counties for the past 15 years. The defendant, a licensed neurologist, entered into a two-year written employment contract with the plaintiffs, effective August 1, 1984. The terms of the contract provided for set salaries and bonuses during the two-year period and required the plaintiffs to give the defendant written notice before the end of the first year indicating whether they were desirous of forming a partnership with the defendant at the expiration of his two-year employment term. The contract also contained a restrictive covenant which provided as follows;

"Upon termination of Dr. Schwartz's employment under this Agreement for any reason, Dr. Schwartz shall not engage in the practice of neurology or open his own office for the practice of neurology or associate himself with another physician within a five (5) mile radius of the office of the Corporations or a five (5) mile radius of any hospital at which Dr. Schwartz has worked on behalf of Corporations for a period of one (1) year after the effective date of termination".

In July 1985 the defendant was orally informed that he would not be offered a partnership in the plaintiffs' practice at the end of his employment contract. In December 1985 the defendant was notified, in writing, that his employment contract would not be renewed and that he would not be offered a partnership.

Thereafter, in August 1986 the defendant established an office for the practice of neurology in Irvington, New York which is located approximately six miles from the plaintiffs' offices, but within five miles of Phelps Memorial Hospital where the defendant had worked on the plaintiffs' behalf. The plaintiffs commenced the instant action against the defendant to enforce the restrictive covenant in the parties' contract and enjoin the defendant from breaching the contract.

The plaintiffs' motion for a preliminary injunction was denied by the Supreme Court. In reviewing the restrictive covenant, the court determined that the provision restricting the defendant from practicing neurology within five miles of the plaintiffs' offices was reasonable and enforceable. However, the portion of the covenant prohibiting the defendant from practicing within a five-mile radius of any hospital where the defendant had worked on the plaintiffs' behalf was overly broad and oppressive and thus unenforceable. Since the plaintiffs failed to adduce any evidence to establish that the defendant was practicing neurology within five miles of their offices, the Supreme Court denied their motion for preliminary injunctive relief. We affirm.

It is axiomatic that restrictive covenants such as that at bar provoke judicial disfavor in view of the "powerful considerations of public policy which militate against sanctioning the loss of a man's livelihood" (Purchasing Assoc. v. Weitz, 13 N.Y.2d 267, 272, 246 N.Y.S.2d 600, 196 N.E.2d 245, rearg. denied 14 N.Y.2d 584, 248 N.Y.S.2d 1027, 198 N.E.2d 270; Reed, Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 307, 386 N.Y.S.2d...