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Wisconsin doctor prevails in battle over non-compete clause

The message at the top of a recent Milwaukee County Circuit Court decision is straightforward: “the Court finds the non-compete provision (in a Wisconsin doctor’s contract) unenforceable.”

Dr. Nikki Allen and her former employer, Aurora Health Care, Inc., disagreed over terms of her contract. Allen, a board-certified family physician, asked the court to declare the non-compete clause in the contract with Aurora void. She said the clause is overly broad and improperly restricts where, when and how she can practice medicine. Aurora insisted in court that the non-compete is narrow and necessary because of all the time and resources the company had devoted to expanding Allen’s client base.

Aurora argued that the non-compete prevents Allen from using Aurora’s investment in her to compete against Aurora.

Although these restrictive covenants are common in employment contracts, Wisconsin law generally disfavors non-compete agreements. To enforce one, the company must show that the agreement is reasonable in its limits placed on geography, time and scope of services are narrow and needed to prevent harm to the business.

Dr. Allen and her attorney argued that because her family practice does not include urgent care services, the non-compete’s limitation on urgent care was unreasonable, making the non-compete itself unenforceable.
Aurora argued that urgent care and family practice overlap. After all, a family doctor is often required to treat a patient in urgent circumstances.

Allen pointed out that she had not provided urgent care services for a decade and that as a family doctor, she sees patients regularly, year after year. Her treatment includes management of long-term health conditions, as well as ongoing diagnostic services and similar medical services.

The court agreed with Allen’s argument, finding that patients who want urgent care services typically seek out a nearby clinic without regard for which physician they will see. Conversely, patients who have a strong relationship with their family doctor will often travel a great distance to see that physician.

Dr. Allen and her attorney also argued that the geographical limitations in the non-compete were also unreasonable. She said the 20-mile restriction prohibited her from seeking employment at 100 health care facilities that are not in competition with Aurora.

Aurora rejected that argument, saying that its agreement would only keep Allen away from three direct competitors.

The court agreed with the doctor, stating that “Dr. Allen has nothing but Aurora’s word that the non-compete clause would not be applied to these employers.”

The court held that the health care network failed to show that the limitations were reasonable in scope to protect the company from harm and therefore the agreement is unenforceable under Wisconsin law.

The decision allows the doctor to provide her services as she and her patients see fit.

Employers often insist that job applicants sign non-compete clauses as part of the hiring process. As in this case, the non-competes are too often unreasonable.

An experienced employment law attorney can help you fight for your freedom and career by challenging an unenforceable non-compete agreement.

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