Fort Sanders Regional Medical Center v. American Anesthesiology of Tennessee, P.C., E2023-01340-COA-R3-CV

American Anesthesiology of Tennessee (AATN) employed anesthesiologists and certified registered nurse anesthetists (CRNAs) exclusively serving Fort Sanders Regional Medical Center and Parkwest Medical Center ("Hospitals").
Employment agreements between AATN and Clinicians included 2-year covenants not to compete, barring Clinicians from working at facilities previously serviced by AATN.
AATN requested a large subsidy from the Hospitals, which was denied, leading AATN to announce it would cease services, seriously jeopardizing hospital operations.
The Hospitals and representative Clinicians sought declaratory judgment that the non-compete covenants were unenforceable, alleging critical public health risks if anesthesia services ceased.
The trial court declared the covenants unenforceable, citing lack of legitimate business interest for AATN, hardship on Clinicians, and risk to public interest; AATN appealed the decision.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject Matter Jurisdiction	Hospitals establish justiciable controversy and are third-party beneficiaries; contracts impact their ability to operate.	Hospitals are not parties or beneficiaries; no justiciable controversy since contracts not terminated.	Hospitals properly included; controversy existed due to cessation notice and cease-and-desist letters.
Motion to Intervene	All Clinicians with similar contracts are necessary parties for complete relief.	Intervention untimely; all affected parties not joined, undermining jurisdiction.	Motion to intervene timely and proper; Clinicians have common legal issues, inclusion justified.
Enforceability of Non-Competes	Covenants create undue hardship for Clinicians and harm public interest by endangering hospital function.	Covenants protect against disintermediation and ensure business stability for AATN.	Covenants unenforceable: no legitimate business interest; undue hardship on Clinicians; harm to public.
Equitable Modification	Did not oppose possible equitable reformation if enforceable; central challenge was validity.	Court should modify covenants to be reasonable, not wholly void them.	No modification warranted; any such provisions still contrary to public interest in these circumstances.

Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984) (sets standard for enforceability of covenants not to compete in Tennessee)
Vantage Tech., LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999) (clarifies factors for determining protectable business interest)
Columbus Med. Servs., LLC v. Thomas, 308 S.W.3d 368 (Tenn. Ct. App. 2009) (non-compete agreement enforceability factors)
Alexander v. Inman, 974 S.W.2d 689 (Tenn. 1998) (review standard in Tennessee appellate courts)
S. Constructors, Inc. v. Loudon Cnty. Bd. of Ed., 58 S.W.3d 706 (Tenn. 2001) (appellate review of conclusions of law)
Ganzevoort v. Russell, 949 S.W.2d 293 (Tenn. 1997) (appellate review principles for contract interpretation)