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In New Jersey, restrictive covenants between physicians are not per se unreasonable and unenforceable. Instead a three-part test called the Solari/Whitmyertest exists: (1) whether the covenant in question protects the legitimate interests of the employer, (2) imposes no undue hardship on the employee, and (3) is not injurious to the public. A non-exhaustive list of relevant factors to consider exists when determining the enforceability of restrictive covenants among physicians. Those factors include the time the employer-physician needs to rebuild the practice following the employee-physician's departure, the reasonableness of the geographic scope, whether the activities the departing physician is prohibited from engaging in are the same as those performed by the employer physician, the hardship on the employee and the reason for the departure, the likelihood that another physician in the area can provide the medical services left vacant by the departing physician, and the effect that enforcement of the covenant would have on the public interest.
Dr. Jay More, a neurosurgeon, had an employment contact with the New Jersey Neuroscience Institute, a non-profit medical care provider created by plaintiff. The employment contract contained a post-employment covenant prohibiting the doctor from certain medical practices in a 30-mile radius of the group's center. When Dr. Moore resigned from the Institute, he became affiliated with another neurosurgeon, Dr. Chimenti, as an employee of Neurosurgical Associates at Park Avenues, P.A. (NAPA), located in Plainfield, New Jersey. In addition, Dr. More received medical staff privileges at Somerset Medical Center (Somerset), which was located approximately thirteen and a half miles from the plaintiff’s location. At the time Dr. Moore joined NAPA, Dr. Chimenti was the only neurosurgeon taking emergency room calls at Somerset. Believing that Dr. Moore was in violation of the employment contract previously signed, plaintiff filed a complaint, seeking, among other things, a preliminary injunction prohibiting him from the practice of neurosurgery with NAPA or Somerset. The trial court denied plaintiff’s request for a preliminary injunction. The Appellate Division reversed the trial court and awarded the plaintiff injunctive relief. The panel found that the evidence supported the conclusion that the restrictive covenant was necessary to protect plaintiff’s patient and referral relationships. On appeal, Dr. Moore argued that restrictive covenants in physician contracts were per se unreasonable and, regardless, the restriction was unenforceable due to the public interest.
The court refused to impose a per se prohibition on restrictive covenants and instead applied the three-part Solari/Whitmyertest test existed to determine reasonableness. The court concluded that the geographic area of the covenant was excessive and had to be reduced to protect the public interest. If the 30-mile area were enforced, the hospital would have only one neurosurgeon for all its patients. The court ordered the area educed to exclude the hospital from its coverage.