In a lawsuit by former members of a multi-specialty practice, the former members sought an order from the court that would have voided the restrictive covenants in the practice’s operating agreement and allowed them to essentially spin off a whole department from the practice to operate it as their own. Aside from making common assertions of unreasonableness and adverse impact on patient care in support of their desired relief, the plaintiffs claimed that they were never members of the practice, despite their signing its operating agreement, based on a certain technicality and the allegation that they were not treated as members. After months of litigation, three court hearings, and multiple opportunities for plaintiffs to supplement the record and modify their desired relief, the court denied the plaintiffs’ applications for a TRO and a preliminary injunction, which effectively preserved the practice’s right to enforce its restrictive covenants.
Restrictive covenants are essential to securing one of the most valuable assets of a health care entity, its goodwill. By successfully defending the former members’ action, our healthcare litigation team was able to protect the economic integrity of the practice. For assistance in drafting, enforcing or challenging the enforceability of restrictive covenants, please contact us.
These stories are successful case results from our attorneys. Please note that results may vary depending on your particular facts and legal circumstances.