Cogley Clinic v. Martini - 253 Iowa 541, 112 N.W.2d 678 (1962)

Rule:

It is a firmly established doctrine that a member of one of the learned professions, upon becoming assistant to another member thereof, may, upon a sufficient consideration, bind himself not to engage in the practice of his profession upon the termination of his contract of employment, within a reasonable territorial extent, as such an agreement is not in restraint of trade or against public policy. Such contracts have been held valid where made by physicians, surgeons, and others of the healing profession.

Facts:

Defendant Dr. H.F. Martini was an employee in plaintiff Cogley Clinic, a partnership composed of physicians and surgeons associated together for the practice of their profession in Council Bluffs and surrounding territory. Defendants was one of the several orthopedic surgeons in the area. The defendant’s employment contract contained a restrictive covenant effective upon the defendant’s termination of employment. After the defendant’s employment in the partnership was terminated, he caused a publication in a daily paper announcing the opening of his office for the practice of orthopedic surgery in the same area as the plaintiff’s. Plaintiff filed an action praying for restraining injunction. The trial court found for the plaintiff and enjoined defendant under the provisions of his contract. Defendant appealed. 

Issue:

Was the grant of injunctive relief in favor of the plaintiff warranted under the circumstances? 

Answer:

Yes.

Conclusion:

On appeal, the order of injunctive relief was affirmed. In support of its ruling, the court held that the geographic limitation and time period contained in the agreement were reasonable. Further, the court found that the loss to plaintiff by defendant's current competition could be anticipated, and that the agreement did not exceed what was necessary to protect plaintiff's interests. Finally, the court noted that defendant failed to show that enforcement of the covenant was injurious to the rights of the general public or violated public policy. The records of the case revealed that the lack of resident orthopedic surgeons in Council Bluffs was inconvenient but it did not show that the public welfare necessarily depended on defendant’s practice in Council Bluffs.