Jewett Orthopaedic Clinic, PA v. White

629 So. 2d 922, 1993 Fla. App. LEXIS 11980, 1993 WL 495971
CourtDistrict Court of Appeal of Florida
DecidedDecember 3, 1993
Docket93-220
StatusPublished
Cited by12 cases

This text of 629 So. 2d 922 (Jewett Orthopaedic Clinic, PA v. White) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jewett Orthopaedic Clinic, PA v. White, 629 So. 2d 922, 1993 Fla. App. LEXIS 11980, 1993 WL 495971 (Fla. Ct. App. 1993).

Opinion

629 So.2d 922 (1993)

The JEWETT ORTHOPAEDIC CLINIC, P.A., Appellant,
v.
George M. WHITE, M.D., Appellee.

No. 93-220.

District Court of Appeal of Florida, Fifth District.

December 3, 1993.
Rehearing Denied January 19, 1994.

*923 Darryl M. Bloodworth of Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A., Orlando, for appellant.

Jerry R. Linscott and Todd M. Hoepker of Baker & Hostetler, Orlando, for appellee.

GRIFFIN, Judge.

Jewett Orthopaedic Clinic, P.A. ("Jewett") appeals a final declaratory judgment determining that a covenant not to compete executed by one of its physician shareholders is unenforceable. We reverse.

Jewett is a Florida professional association which specializes in orthopaedic surgery and which operates clinics in Orange and Seminole counties. Jewett services patients from a broad geographic area that includes Orange, Seminole, Osceola, Lake, Volusia and Brevard counties.

Appellee, Dr. George M. White ("Dr. White"), is an orthopaedic surgeon, specializing in hand surgery. He was first employed by Jewett on July 1, 1986. Effective July 1, 1987, he became a shareholder, officer and director of Jewett. His employment was subject to a series of employment agreements, the last of which was executed August 30, 1989.

The dispute in this case concerns an amendment to the Jewett shareholders' employment agreements executed by Dr. White and the other Jewett shareholders on July 25, 1990. The amendment provided:

24. Limitation of Practice: It is specifically agreed that in the event of the termination of this employment with the Corporation, the Employee shall not engage in the practice of medicine or surgery in the field of orthopaedics within Orange, Seminole, Osceola, Lake, Volusia or Brevard counties in the State of Florida for a period of two (2) years from the effective date of such termination. It is understood by the parties that no amount of money would adequately compensate the Corporation for damages which the parties acknowledge *924 would be suffered as a result of the violation of this provision by the Employee. In recognition of the substantial nature of such potential damages, it is agreed that the Corporation shall be entitled to specific performance of this provision, and to injunctive relief, and that the Employee will be responsible for the payment of court costs and reasonable attorney's fees incurred by the Corporation in enforcing the covenant set forth herein, if such a violation occurs. This paragraph shall survive the termination of this Agreement and the termination of the Employee's employment with the Corporation.

Dr. White submitted his resignation to Jewett on or about August 18, 1992.[1] Because his employment agreement provided for 180 days' notice, however, Dr. White was obligated to remain with Jewett until February 15, 1993, unless Jewett exercised its option to accelerate the date of his termination. Jewett did not exercise this option.

On July 21, 1992, prior to the date on which he submitted his resignation, Dr. White filed the instant action seeking a declaration that his covenant not to compete was unenforceable. The grounds asserted by Dr. White in his complaint were: (1) lack of consideration; (2) selective and arbitrary enforcement of the noncompete agreement; (3) lack of a legitimate protectible business interest underlying the covenant; (4) the territorial restrictions were overbroad and unreasonable; (5) the covenant prohibited only the practice of orthopaedic surgery, not hand surgery, and (6) enforcement of the agreement would be contrary to the public health, safety and welfare under section 542.33, Florida Statutes (1991).

Dr. White moved for summary judgment and submitted affidavits in support of his motion. Jewett responded to the motion by submitting affidavits, attempting to put at issue all of the factual allegations made by Dr. White both in his complaint and in his supporting affidavits.

The court held a hearing on the motion and subsequently issued a declaratory decree in favor of Dr. White. In its decree, the court did not directly address any of the grounds for summary judgment raised by Dr. White.[2] Instead, the judgment provided:

The issue in this case is whether the noncompete provisions in paragraph $24 of the July 25, 1990, first amendment to petitioner's employment agreement is enforceable. A decision on that is controlled by whether Dr. White going into practice of orthopaedic medicine in the Orlando area in direct competition with Jewett Clinic's orthopaedic practice would be fair or unfair competition. The answer is that there is not one shred of evidence nor one plausible argument Dr. White's practice of medicine would be any different than the practice of orthopedics by any other doctor in this community. [emphasis in original].

Contrary to the lower court's ruling, the question whether the noncompete agreement is unenforceable does not turn on whether Dr. White's opening a competing practice would be "unfair." The question is controlled by the provisions of the current version of section 542.33, Florida Statutes, (1991),[3] which provides in relevant part:

542.33 Contracts in restraint of trade valid. —
(1) Notwithstanding other provisions of this chapter to the contrary, each contract by which any person is restrained from *925 exercising a lawful profession, trade, or business of any kind, as provided by subsections (2) and (3) hereof, is to that extent valid, and all other contracts in restraint of trade are void.
(2)(a) One who sells the goodwill of a business, or any shareholder of a corporation selling or otherwise disposing of all of his shares in said corporation, may agree with the buyer, and one who is employed as an agent, independent contractor, or employee may agree with his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employers within a reasonably limited time and area, so long as the buyer or any person deriving title to the goodwill from him, and so long as such employer, continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction, be enforced by injunction. However, the court shall not issue an injunction contrary to the public health, safety or welfare or in any case where the injunction enforces an unreasonable covenant not to compete or where there is no showing of irreparable injury. However, use of specific trade secrets, customer lists, or direct solicitation of existing customers shall be presumed to be an irreparable injury and may be specifically enjoined. In the event the seller of the goodwill of a business, or a shareholder selling or otherwise disposing of all his shares in a corporation breaches an agreement to refrain from carrying on or engaging in a similar business, irreparable injury shall be presumed. [emphasis added].

This statute expresses the legislature's intent that covenants not to compete, although validated by the statute, are not enforceable by injunction if the covenant is unreasonable, if enforcement would be contrary to the public health, safety or welfare, or if the proponent is unable to show irreparable harm if the covenant were not enforced according to its terms.[4]

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Bluebook (online)
629 So. 2d 922, 1993 Fla. App. LEXIS 11980, 1993 WL 495971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jewett-orthopaedic-clinic-pa-v-white-fladistctapp-1993.