Donald Golden v. California Emergency Physician
896 F.3d 1018
9th Cir.2018Background
- Dr. Donald Golden, an internal-medicine physician who also worked as an ER physician and hospitalist, was terminated by California Emergency Physicians Medical Group (CEP) and sued for employment discrimination; the parties reached an oral settlement but Golden refused to sign the written agreement because of Paragraph 7.
- Paragraph 7 barred Golden from working at any CEP-contracted facility, permitted CEP to terminate him from employment at third-party facilities if CEP later contracted with or acquired rights in those facilities, and barred reinstatement at CEP-owned/managed facilities (with limited exceptions for certain urgent care roles).
- The district court ordered Golden to sign the settlement; this court in Golden I reversed and remanded to determine whether Paragraph 7 placed a “restraint of a substantial character” on Golden’s medical practice under Cal. Bus. & Prof. Code § 16600.
- On remand the district court again ordered enforcement without an evidentiary hearing; Golden appealed, arguing Paragraph 7 violates § 16600 and the court should have held an evidentiary hearing.
- The Ninth Circuit majority (Judge Bates) held Paragraph 7 substantially restrains Golden’s medical practice because it prevents employment at CEP-contracted facilities and allows CEP to terminate him at third-party facilities—and therefore is void under § 16600; the entire settlement is void and the order to sign was reversed.
- Judge M. Smith dissented, arguing the restraint analysis is speculative, the district court’s factual findings should stand, and the agreement did not substantially restrain Golden’s profession given his qualifications and the limited scope of the bar.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Paragraph 7 imposes a "restraint of a substantial character" under Cal. Bus. & Prof. Code § 16600 | Paragraph 7 bars Golden from practicing medicine at many CEP-affiliated and contracted sites and allows CEP to terminate him at third-party facilities, significantly impeding his profession | Paragraph 7 merely bars Golden from working for CEP or at CEP-owned sites; any broader effects are speculative and not a present substantial restraint | Held: Paragraph 7 is a substantial restraint as to CEP-contracted facilities and CEP’s unilateral termination clause at third-party sites, thus void under § 16600; the settlement is unenforceable |
| Standard of review for whether restraint is "substantial" | N/A (substance-focused argument) | CEP urged deference to district court factual findings (clear-error review) | Court treated the question as a mixed law-fact issue: defers to factual findings but reviews de novo whether those facts satisfy § 16600’s legal standard |
| Whether an evidentiary hearing was required on remand | Golden requested a hearing to develop the record showing substantial restraint | CEP argued the record sufficed and district court acted within discretion | Court did not decide evidentiary-hearing issue because it resolved case on § 16600 grounds (finding the provision void) |
| Scope of what constitutes a "substantial" restraint under § 16600 | N/A (relies on California precedent and policy favoring mobility) | CEP argued narrow or speculative restraints should survive | Held: A restraint is "substantial" if it significantly or materially impedes a lawful profession; this is a generally expansive standard protective of open competition and mobility |
Key Cases Cited
- Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083 (9th Cir. 2015) (earlier panel decision remanding to determine whether Paragraph 7 is a substantial restraint)
- Edwards v. Arthur Andersen LLP, 189 P.3d 285 (Cal. 2008) (California Supreme Court rejecting reasonableness and narrow-restraint exceptions under § 16600)
- Chamberlain v. Augustine, 156 P. 479 (Cal. 1916) (early California decision invalidating a partial restraint as a restraint of substantial character)
- Muggill v. Reuben H. Donnelley Corp., 398 P.2d 147 (Cal. 1965) (invalidating penalty-for-postemployment-competition as violative of § 16600)
- USS-POSCO Indus. v. Case, 197 Cal. Rptr. 3d 791 (Cal. Ct. App. 2016) (intermediate appellate decision upholding repayment-for-training clause and treating such clauses as non-restraining)
- Int’l Bus. Machs. Corp. v. Bajorek, 191 F.3d 1033 (9th Cir. 1999) (Ninth Circuit precedent discussed in context of narrow-restraint doctrine)