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Supreme Court of Arizona
June 18, 1999, Filed
Supreme Court No. CV-97-0488-PR
[*364] [**1278] En Banc
P1 We granted review to determine whether the restrictive covenant between Dr. Steven Farber and Valley Medical Specialists is enforceable. We hold that it is not. Public policy concerns in this [***2] case outweigh Valley Medical's protectable interests in enforcing the agreement. We thus vacate the court of appeals' opinion, affirm the trial court's judgment, and remand to the court of appeals to resolve any remaining issues. We have jurisdiction pursuant to Arizona Constitution article VI, § 5(3) and A.R.S. § 12-120.24.
FACTS AND PROCEDURAL HISTORY
P 2 In 1985, Valley Medical Specialists ("VMS"), a professional corporation, hired Steven S. Farber, D.O., an internist and pulmonologist who, among other things, treated [**1279] [*365] AIDS and HIV-positive patients and performed brachytherapy -- a procedure that radiates the inside of the lung in lung cancer patients. Brachytherapy can only be performed at certain hospitals that have the necessary equipment. A few years after joining VMS, Dr. Farber became a shareholder and subsequently a minority officer and director. In 1991, the three directors, including Dr. Farber, entered into new stock and employment agreements. The employment agreement contained a restrictive covenant, the scope of which was amended over time.
P 3 In 1994, Dr. Farber left VMS and began practicing within the area defined by the restrictive covenant, which at that time [***3] read as follows:
The parties recognize that the duties to be rendered under the terms of this Agreement by the Employee are special, unique and of an extraordinary character. The Employee, in consideration of the compensation to be paid to him pursuant to the terms of this Agreement, expressly agrees to the following restrictive covenants:
(a) The Employee shall not, directly or indirectly:
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
194 Ariz. 363 *; 982 P.2d 1277 **; 1999 Ariz. LEXIS 91 ***; 298 Ariz. Adv. Rep. 34; 15 I.E.R. Cas. (BNA) 419; 138 Lab. Cas. (CCH) P58,653
VALLEY MEDICAL SPECIALISTS, an Arizona professional corporation, Plaintiff-Appellant, v. STEVEN S. FARBER, D.O. and SUSAN H. FARBER, husband and wife, Defendants-Appellees.
Subsequent History: [***1] Counsel Amended June 22, 1999.
Prior History: Court of Appeals No. 1 CA-CV 95-0520 and 1 CA-CV 96-0533 [Consolidated]. Maricopa County No. CV 94-14865. Appeals from the Superior Court in Maricopa County. The Honorable Robert L. Gottsfield, Judge. Opinion of the Court of Appeals, Division One, 190 Ariz. 563, 950 P.2d 1184 (App. 1997).
Disposition: Appeals from the Superior Court in Maricopa County AFFIRMED. Opinion of the Court of Appeals, Division One VACATED.
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