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NYC Litigation Blog

Monday, June 29, 2015

I've won! Can we please continue to litigate this case?

Uh . . . probably not.  Today's case is a recent trial court decision in Suffolk County. 

Tamai was employed by SAA as an anesthesiologist in Suffolk County.  Her contract with SAA had a restrictive covenant prohibiting her from holding medical staff privileges at four hospitals, including St. Charles and Mather Hospitals, for three years after leaving SAA.  She decided to leave SAA and accept a position at LIAP, which provided anesthesiology services at St. Charles and Mather.

SAA sent a letter to Tamai and LIAP, threatening legal action if she violated the restrictive covenant.  Tamai sued for declaratory, injunctive and other relief on February 25, 2015, after LIAP withdrew its offer of employment. She also moved for a temporary restraining order, which was granted in part, and a preliminary injunction, which was set down for a hearing on June 8, 2015. SAA cross moved for summary judgment dismissing the complaint. In a letter dated April 14, 2015, Tamai informed the Court that she had found other employment that did not require her to maintain medical staff privileges at any of the four hospitals named in the restrictive covenant. She also advised the court that she was seeking leave to discontinue this case against SAA without prejudice. SAA objected to discontinuing the case and argued that any discontinuance should be with prejudice. Tamai then moved to discontinue the action without prejudice.

The Court held that the case would be discontinued without prejudice because: (1) the case was mooted after Tamai obtained a job that didn't violate the restrictive covenant; 2) the action had not progressed far enough to prejudice defendant in any way.  The Court reasoned that even though this controversy was capable of repetition in the next three years or so, there was no novel legal question presented because it is well-settled that such restrictive covenants for anesthesiologists are subject to the same analysis of reasonableness in duration, location and so on as those for other professionals. 

In dictum, the Court discussed SAA's motive for seeking to continue the case.  It speculated that the motive was to seek a ruling affirming the viability of the restrictive covenant and then using that as a sword against Tamai and other employees in the future should the need arise.  Going slightly further, I suspect that a favorable decision would also be used as a "moat" to prevent or discourage valuable anesthesiologists from leaving the employer's "castle" for higher pay, better benefits, etc.  In any event, the Court declined to gild SAA's victory by bestowing the gift of an advisory opinion it did not need to write.

http://www.nycourts.gov/reporter/3dseries/2015/2015_50885.htm

 


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