BURSON Et Al. v. MILTON HALL SURGICAL ASSOCIATES, LLC.
343 Ga. App. 159
| Ga. Ct. App. | 2017Background
- MHSA sued three former employees (physicians Burson and Heindel, and PA Askew) for trade-secret misappropriation, breach of duty of loyalty/unfaithful agent, breach of employment contracts (Count III), and attorneys’ fees. The appeal challenges denial of a motion to dismiss Counts II and III.
- Burson’s and Heindel’s employment agreements were executed in 2010 and thus governed by pre‑May 11, 2011 law (no judicial reformation/blue‑penciling). Both contained 2‑year, 10‑mile noncompete territories and a provision allowing a written amendment to redefine the territory if the physician moved.
- The physicians’ agreements also contained a non‑solicitation clause prohibiting solicitation or any communication “with a view to” providing services to MHSA patients with whom the physician had material contact during the prior two years.
- Askew signed her agreement on April 27, 2011; MHSA pleaded she began employment on that date. Her covenant barred practice within 15 miles of current office locations and stated the list of locations “will be amended without notice.”
- The trial court denied the motion to dismiss; the Court of Appeals reviews de novo and affirms in part/reverses in part.
Issues
| Issue | MHSA (Plaintiff) Argument | Former Employees (Defendant) Argument | Held |
|---|---|---|---|
| 1. Are the physicians’ territorial clauses (including amendment provision) unreasonable/unenforceable? | Territorial clauses are definite and lawful under pre‑2011 standards; amendment language is a permissible process to reform coverage. | The amendment-following provision renders the covenant vague, overbroad, or an unenforceable "agreement to agree." | Held: Clause is not unconstitutionally vague or an agreement to agree; territorial definition and reformation process are acceptable. But other defects (see Issue 2) affect enforceability. |
| 2. Is the physicians’ non‑solicitation clause unenforceable because it bars accepting unsolicited overtures from former patients? | The clause is permissible as protecting MHSA’s patient relationships. | The clause prohibits acceptance of unsolicited patient overtures and thus is an unreasonable restraint on trade and unenforceable. | Held: Non‑solicitation provision is unenforceable because it bars accepting unsolicited patient contacts. That renders the physicians’ restrictive covenants void under pre‑2011 law. Dismissal of Count III as to breach of Section 10 enforced. |
| 3. Is Askew’s geographic covenant sufficiently definite and enforceable? | MHSA argues Askew’s contract is binding and covenant enforceable. | Askew contends the 15‑mile restriction tied to “current office locations” and amendable “without notice” is vague and indefinite. | Held: Covenant is vague/indefinite and therefore unenforceable under pre‑2011 law. Because MHSA pleaded Askew began employment April 27, 2011, pre‑2011 rules apply; Count III as to Askew’s restrictive covenant must be dismissed. |
| 4. Can Former Employees be liable for breach of fiduciary duty based solely on violating unenforceable restrictive covenants (Count II)? | MHSA seeks fiduciary‑duty claims based partly on alleged breaches of the restrictive covenants. | Defendants argue they cannot be liable for breaching unenforceable contracts, so fiduciary claims based on those covenants must be dismissed. | Held: Count II must be dismissed only insofar as it is premised on breach of the unenforceable restrictive covenants. Other fiduciary/duty allegations survive. |
Key Cases Cited
- Penny v. McBride, 282 Ga. App. 590 (standard for motion to dismiss review)
- Coleman v. Retina Consultants, P.C., 286 Ga. 317 (pre‑2011 noncompete law; no blue‑penciling)
- Orkin Exterminating Co. v. Walker, 251 Ga. 536 (analysis of territorial clauses and limits on restricting acceptance of unsolicited customers)
- Orkin Exterminating Co. v. Pelfrey, 237 Ga. 284 (vagueness/indefiniteness principles for covenants)
- Vulcan Steel Structures, Inc. v. McCarty, 329 Ga. App. 220 (non‑solicitation cannot bar accepting unsolicited business)
- White v. Shamrock Bldg. Sys., 294 Ga. App. 340 (employees may plan competition but cannot solicit prior to termination)
- MAPEI Corp. v. Prosser, 328 Ga. App. 81 (formation/assent principles for contracts)
- Del Lago Ventures, Inc. v. QuikTrip Corp., 330 Ga. App. 138 (performance can manifest acceptance and bind unsigned party)