Mercy Health System of Northwest Arkansas, Inc. v. Bicak
2011 Ark. App. 341
Ark. Ct. App.2011Background
- Mercy Health System hired Ajdahan Bicak, M.D. in 1998 as a family practitioner in Rogers, Arkansas.
- The employment agreement contained a covenant not to compete with 24-month post-employment restriction and geographic limit of 18 air miles from Mercy facilities.
- Bicak gave notice in 2007 of termination and planned to open a practice in Bentonville in 2008; Mercy sued in January 2008 seeking injunctive relief and damages for breach of the covenant and related torts.
- Bicak moved for summary judgment arguing Mercy lacked a protectable interest, the geographic restriction was overbroad, and he did not misuse confidential information.
- The circuit court granted partial summary judgment for Bicak in June 2010, finding no proof of confidential information misuses, and that the geographic and time restraints were unreasonable; it denied some other claims and certified under Rule 54(b).
- Mercy appealed, and the Arkansas Court of Appeals affirmed, ruling the covenants were not enforceable given Mercy’s asserted interest and the restraints were overly broad or unnecessary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mercy had a valid interest to enforce the non-compete | Mercy asserts it had confidential information and patient lists worthy of protection. | Bicak contends Mercy lacked a legitimate interest; geographic/time restraints are broader than necessary. | Covenant not enforceable; Mercy lacked a sufficient protectable interest. |
| Whether Bicak used Mercy's confidential information for advantage | Evidence suggested potential client list and misuse of information. | Employees left voluntarily; no proof Bicak used confidential info to gain advantage. | No genuine issue; no misuse proven; summary judgment affirmed on this claim. |
| Whether Bicak tortiously interfered with Mercy's business relationships | Bicak opened a competing practice and solicited patients obtaining Mercy’s business. | Interference requires improper conduct and Mercy’s patient base not guaranteed to return; no improper motive shown. | No tortious interference; affirmed. |
Key Cases Cited
- Statco Wireless, LLC v. Southwestern Bell Wireless, LLC, 80 Ark.App. 284, 95 S.W.3d 13 (Ark. App. 2003) (covenants not to compete protect legitimate interests when narrowly tailored)
- Duffner v. Alberty, 19 Ark.App. 137, 718 S.W.2d 111 (Ark. App. 1986) (public policy about physician availability; restraint must be reasonable)
- Dawson v. Temps Plus, Inc., 337 Ark. 247, 987 S.W.2d 722 (Ark. 1999) (restriction on employment must not unduly affect livelihood)
- Rebsamen Ins. v. Milton, 269 Ark. 737, 600 S.W.2d 441 (Ark. 1980) (restraint of trade; contract enforceability requires reasonableness)
- Jaraki v. Cardiology Assocs. of Ne. Ark., P.A., 75 Ark.App. 198, 55 S.W.3d 799 (Ark. App. 2001) (geographic scope tied to trade area; overbroad restraints void)
- Windsong Enters., Inc. v. Upton, 366 Ark. 23, 233 S.W.3d 145 (Ark. 2006) (contingency affects validity of business expectancy claim)
- Baptist Health v. Murphy, 2010 Ark. 358, 373 S.W.3d 269 (Ark. 2010) (improper interference elements and reasonableness in evaluating tortious interference)
- Gunn v. Farmers Ins. Exchange, 2010 Ark. 434, 372 S.W.3d 346 (Ark. 2010) (framework for tortious interference elements and improper conduct)