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I have a contract for ownership in a surgery center. I also…

I have a contract...

I have a contract for ownership in a surgery center. I also had a contract for employment by a hospital system. I left system that enforced non-compete. Surgery center is claiming I must sell because I do not meet the 1/3 rule for doing cases at the facility. Which contract wins out. Nothing in the Surgery center contract about abiding by non-compete from the hospital system

Lawyer's Assistant: Have you documented this or discussed it with HR?

Two separate entities

Lawyer's Assistant: Is the employment agreement "at will," union, full time or part time?

Full time employment agreement that was signed after my private group dissolved and became employed by the large hospital system

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Answered in 1 minute by:
11/16/2017
Legal Eagle
Legal Eagle, Lawyer
Category: Legal
Satisfied Customers: 8,364
Experience: Licensed to practice before state and federal court
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Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating (click here for more info) so all that means is that you can count on me to help today. Because I want to provide you with the most accurate answer possible, do you mind if I take a moment to review your question?

Please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

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Customer reply replied 3 months ago
Sure. P

Great, thank you! Bear with me a moment while I review...

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Hi, I haven’t forgotten about you. I’m just wrapping up with another customer and I will be with you shortly.

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Customer reply replied 3 months ago
No rush

Thanks so much for your extreme patience. So, if I understand your situation accurately, the surgery center ownership is saying that you don't meet some 1/3 rule for doing cases at the facility, and they're trying to say that because you have a contract with the hospital system, that is the reason why. Is that correct?

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Customer reply replied 3 months ago
They are claiming I have to sell my interest in the surgery center because I have not met the 1/3 rule for doing cases there. The reason I cannot meet that requirement is that I am under an enforced noncompete from another entity that encompasses the surgery center. The noncompete part of my contract came after I already owned the surgery center. The question is which contract should supersede. I have met all the requirements of membership in the ASC but cannot do cases bc of noncompete. Which contract wins.

Thanks so much for writing back. The contract regarding the 1/3 rule is going to win probably, but only a court or a jury could tell you for sure. If they try to sue you for breach of contract if you decide not to exit, then you could bring up some defenses to the breach such as impossibility of performance or impracticability. You could also argue that they never actually suffered any damages either.

If they continue to try to put pressure on you, then you could argue that this appears to be a violation of the implied covenant (promise) of good faith and fair dealing because they failed to work with you because of the non-compete issue. Under the Uniform Commercial Code Section 1-304, every contract comes with implied promises from both parties that they are going to be acting fairly toward one another. The failure of one party to act fairly toward other can result in a breach of contract. There’s a site that I’ve used in the past where you can find a good template for advising of a breach of contract. It's a bit easier (and cheaper) than going through litigation and I have seen it be effective in the past. If this doesn’t work, sadly, the only other option is to either go through an informal mediation or file a lawsuit in your local court. This website is also pretty cool because they have some state-specific breach of contract forms that you can use as well. Click here to choose your state started.

What other questions did you have for me?

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Customer reply replied 3 months ago
Great. Thanks. P

The pleasure is all mine! There’s just a few other things I’d like you to know before we wrap up this conversation:

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Legal Eagle
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