Musto v. OptiCare Eye Health Centers, 2000 Conn. Super. LEXIS 2298
Dr. Anthony Musto owned an eye care services professional corporation with two other doctors from 1973 to 1996. He worked as a private practice ophthalmologist in the greater Bridgeport area until the three doctors sold the practice to OptiCare Eye Health Centers, Inc. on July 31, 1996. Dr. Musto owned one third of the shares of the business, sold them to OptiCare for a profit of $590,000, and signed an employment agreement with OptiCare to work as an ophthalmologist on their payroll. He worked as an OptiCare employee from August 1, 1996 to August 4, 2000, providing management with a one-year written notice of voluntary termination on August 1, 1999. Following his termination, Dr. Musto proceeded to open a private practice office in Fairfield and perform surgeries at Bridgeport Hospital, including three extremely rare procedures: dactocystorhinostomy, blethoroplasty, and removal of eyelid tumors.
Dr. Musto signed a non-compete agreement with OptiCare as part of his employment contract and initialed each page to demonstrate he understood the agreement’s obligations and restrictions. The restrictive covenant stipulated that Dr. Musto be prohibited from engaging in the practice of ophthalmology or ophthalmic surgery for a period of eighteen months following termination with fifteen miles of OptiCare’s Stratford or Bridgeport offices. OptiCare sued to prevent further violations of the non-compete agreement because of Dr. Musto’s new practice in Fairfield, a location clearly within fifteen miles of the identified OptiCare offices. The company sought to enjoin him from performing general ophthalmic surgeries at Bridgeport Hospital, also located within the geographical restrictions, but did not ask the court to prevent him from performing the three rare surgeries since he was the only doctor on staff at the hospital with the requisite expertise and knowledge to perform them. Dr. Musto however argued before the court that the restrictions contained in the agreement were unreasonable and the court should deny OptiCare’s request for their enforcement.
The court held that the non-compete agreement was in fact reasonable and granted OptiCare’s request for its enforcement. The court granted the request, stating, “Where the context of the covenant not to compete is the sale of the good will of an established business, the courts recognize that enforcement of the covenant is necessary to prevent the seller from depriving the buyer of the value of the transaction”. When OptiCare acquired Dr. Musto’s professional corporation, it purchased the asset of continued patronage from people who had been patients of that practice, and the court concluded that OptiCare was entitled to protection of this valuable asset. When determining whether a restrictive covenant is reasonable, the court must determine if it affords more than fair and just protection to the party in whose favor it operates without unduly interfering with public interest. The eighteen-month duration was deemed reasonable because it was short enough not to cause any unwarranted or extreme hardships on Dr. Musto’s ability to start another practice. Additionally the court concluded that the fifteen-mile restriction was reasonable because it was not a distance greater than what was necessary to protect the good will asset that OptiCare acquired from Mr. Musto and his partners.
If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.
Keywords: business, covenant, doctor, eye care, goodwill, hospital, opthalmologist, private practice, sale, surgery, enforcement, franchise, injunctive relief, obligations, prohibitions, valid, attempted solicitation, solicitation, refuse to enforce, reasonably necessary, former employer, previous employer, job responsibilities, binding, classified information, commercial operations, competing, compete, directly, employer’s interest, indirectly, internet-based, protect, reasonable, restricting disclosures, restricting disclosures, similar products, burden of proof, duress, direct competitor, disclosure of trade secrets, employment contract, enforceability, geographic limitations, headquarters, improper competition, injunction, management responsibilities, non-compete covenant, radius, sales representative, time limitations, unreasonable provisions, attorney, attorneys, employment attorneys, bonus, bonuses, companies, company, connecticut, customary practices, Darien, departing employees, directors, employee, employer, employment law, employment at-will, at-will, legal counsel, executives, New York, Fairfield, Fairfield County, Norwalk, Westport, Weston, Easton, Bridgeport, Stamford, Stratford, severance package, Greenwich, harassment, discrimination, hiring, human resources, job offers, lawyer, lawyers, leaving company, leverage, Maya Murphy, negotiated, negotiating severance packages, negotiation, New Canaan, non-compete, non-competition, non-disparagement, non-solicitation, offer, offer agreement, offer letter, P.C., payroll, position, represent, representation, salary, salaries, senior management, manager, separation agreement, severance agreements, severance letters, severance package, termination, vacation, vesting, vesting of stock options, law firm, public interest, monopoly, start own business, voluntary, voluntarily left, mediation, burdensome, excessive, geographical, occupation, practice, territorial, violation, restrictive, proprietary knowledge, scope, narrow, broad, anti-compete, future clients, adequate consideration, competing businesses, confidentiality agreement, conflict of interest, defense, fraud, consideration, oral representations, written approval, commercial, compensation, clients, contracts