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