Legal Flashcards
Sherman Antitrust Act 1890
Contracts that unreasonable restrain trade are illegal under rule of reason . Also outlaws price fixing
What 4 situations spark exception to employee restrictive covenants
Agreement short-term employees
Specialist
TIed to hospital sale
partnership or corp formed or dissolved
How does AVMA define solicitation
Solicitation does not include general press releases, advertising public at large, telephone listings
Advertising intentionally directed to specific individuals
How long are the Employee Antisolicitation clauses for
typically limited to 1 year
Blue Pencil doctrine
allows the court to Blue line out those areas of the contract unreasonable rather than the entire contract
Short term vet employees and non competes.. When will they be valid
If DVM terminated 4-6 months after start, non compete not bound however if resign 4-6 month, non compete may be enforced
What are some aspects buyers and sellers of practices should consider
Presence of employment contracts. seller has with existing staff DVMs
Presense/absense non-compete clause with staff DVM
Whether these contracts carry over to purchasing DVM
Whether buyer can cancel/negotiable new contract with staff DVM
catchment areas or practices trade
distance around vet practice where majority clients come from
geopgraphic limitations pertains to what % of cleintele
GEOGRAPHIC CONSTRAINTS OF 80-85% CLIENTTELE
What do courts consider looking at geographical limitations in non competes
practice type
pop density
community size
Distance of clientele in general from practice
urban small animal= 8 miles
rural small = 19 miles
Equine= 27 miles
Food Animal= 23 miles
In lieu of notice pay (guilt) $
$ provided departing employees (severance) rather than allow them work through end of contract
Name types of approaches in defining geographical limitations
80 85% clients
reviewing radius system against actual practice clientele using data and maps- look at hwy and mountains,
Restatement (2nd) of contracts
States in ongoing transaction, a promise of non compete maybe made and ancillary as long as supported by consideration and meets requirements of enforceability
Can you tell a client where departing staff DVM went to
Yes- they entitled to honest answer- Employers who prior deceptive answers are violating Principles of VEt Ethics
Material Breach
violation of contract terms so subtantial it invalidates the contract ex. not paying staff DVM and then expecting to adhere to restraint
Liquidation damages (pre-set)
relieves court of calculating figure and hopefully constitutes reasonable estimate of anticipated damage
Who can develop competition practicing more easily specialist or generalist
Specialsit- only need to bond to referring hospitals not large number of clients
Do courts frown upon employee retrictrive covenants for 2 years
yes
Do courts consider length of employment in restrictive covenants
yes
When are restrictive covenants reasonable in time
no longer than necessary to protect employee, do not impose undue hardship on former employee and not injurious public
covenants- when drafting against employees
When drafting employee restrictions, business should be fair and allow staff dvm to work in roles that dont compete directly
Why are sales restrictive covenants enforced by courts even though they are generally higher
courts view these convenant as accurate manifestation of both parties intents, both received consideration and were not forced
what do courts consider in the reasonableness of covenants
1) relationship among parties
2) scope of rrestrictiion
3) time limitations
4) geopraphic constraints
5) adequancy of consideration
frequent convenant problems
1)employer creaaeting too strict contract and cant get anyone hired
2) some states unenforceable
3) employers have unfair advantage in $ to fight
4)excessive restrictions
5)hard feelings
6)fighting in court is big decision with risk
7) puts huge emotional finacial risk on employee
8) contract written in air miles make hard dvm employee get work
when is new owner interests at risk
1) when staff dvm opens own practice in trade area
2) when owener put practice up sale (value goes down with dr leaving)
3) partnership dissolves
Does AVMA enforce tangible interests as protectable assets
yes
Trade secret
any formula informatio which gives business advatage over competitior who do not kknow it
client goodwill
combo of practice and profession goodwill
professional goodwill
depth of doctor-client relationship strenthen by Dr personal traits
Practice goodwill
practice reputation with community and among collegues/staff
Unreasonalbe restraint- what do courts look at here in Shermans ACT for restrictive covenatn
employers need protection
hardsjip on employee
effect trade has on public
What aspects of interstate commerce regarding element of Sherman Act do Vets carry
Practice near boarder town
Volume suppies shipped practice out of state-most practices have this
hosp that tx patients moving interstate
does practice spend $ travel outside state or health certs
Conspiracy
combo of 2 people planning active secretly for unlawful purpose
What are 4 basic requirements of Sherman ACT
Must be at least 2 persons under contract
restraint involves trade or commerce
restraint involves interstate commerce
restraint is unreasonalbe
Controlled Substance Act requires anyone who ________,____,______ must register with DEA
manufacturers, distributes or dispenses
how many locations can DVM prescribe controlled drugs
4 different location owned by the same business owner
DVM can prescribe controlled if
registered at some principle place of busness
DVM can adminsiter or dispense if
classified as employees of the registrant or they must register at each facility where they are employed