The appellant, Dr. James R. Rash, is a former member of the appellee partnership for medical practice in Toccoa, Georgia. Article X, Par. II of the articles of partnership, signed by Dr. Rash when he became a member in 1979, provides: “As part of the consideration for
When the appellant gave the partnership the required written notice of his resignation from the partnership effective November 1, 1983, he expressed his intention to open a practice of obstetrics and gynecology in Demorest, Georgia (which is within 25 miles of Toccoa) in January of 1984, and to treat any patients who seek his services, including patients he has treated at the Toccoa clinic. The appellee partnership obtained an injunction which enjoined the appellant from violating the provisions of the articles of partnership quoted herein-above, from which judgment Dr. Rash appeals.
1. Contracts which are against the policy of the law cannot be enforced, and contracts in general restraint of trade come within such classification. 1983 Ga. Const., Art. III, Sec. VI, Par. V; OCGA § 13-8-2. In determining whether covenants not to compete are such contracts in general restraint of trade, hence unenforceable, the appellate courts of Georgia have consistently held that neither the constitutional nor the statutory provisions pertinent to this subject impose an absolute bar against every kind of restrictive agreement.
Howard Schultz & Assoc. v. Broniec,
There is a line of cases in this state beginning with
Rakestraw v. Lanier,
Then, in
Raiford v. Kramer,
In
Carroll v. Harris,
2. Counsel for the defendant-appellant seeks to distinguish the aforesaid cases by saying, among other things, that they are outdated in light of a trend toward more strict interpretation in cases (none of which deals with medical partnership agreements) such as
Singer v. Habif, Arogeti & Wynne, P.C.,
First,
Singer
did not contain a strict territorial limitation, in that the covenant there prohibited the employee (an accountant) from accepting employment or remuneration of any kind from, by, for, or in behalf of any clients of HAW (the employer) “within the territorial limitations of the Atlanta metropolitan area
or any other county (in or out of the state) in which clients of HAW are located.”
(Emphasis supplied.) The enforcement of this covenant would restrict the former employee from a certain amount of practice anywhere in the country,
We are dealing here not with an employment contract but with a partnership agreement. Although it does not appear that the appellate courts of this state have had occasion to clearly distinguish between the two types of agreements, there are obvious differences. In a partnership agreement such as the one here, as opposed to an employment agreement, the consideration flows equally among the contracting parties. For example, when an employee agrees to subject himself to possible future restrictions, he does so in exchange for the opportunity to have the job. He really gets nothing other than the opportunity to work in exchange for giving up this aspect of his freedom. On the other hand, here a partner has not only restricted himself, but he has also exacted from each of the other contracting parties a like restriction. When Dr. Rash signed this partnership agreement, eighteen other physicians made the same concession and gave the same assurance to him as he was giving them. Had Dr. Rash decided to stay, and had one of these other doctors who had gained popularity and a good professional reputation while working at the clinic been dissuaded from going into competition with the clinic and taking paying patients with him, Dr. Rash would have been benefited. In a similar case, the Supreme Court of Oregon upheld such a covenant, calling attention to the mutual benefits and burdens involved in such an agreement. McCallum v. Asbury,
The next distinction between employment agreements and partnership agreements is that it is generally true in the employer/employee relationship that the employee goes into a transaction such as this at a great bargaining disadvantage. Such would not be expected to be the case in a professional partnership arrangement, and it certainly was not the case here. See Stern, “Enforceability of Restrictive Covenants in Employment Contracts,” Ga. State Bar Journal, Vol. 17, No. 3. Medical doctors are in demand. Medical doctors in the field of
Since the employee who agrees to the covenant may have done so from an inferior bargaining position, and since the covenant may seriously impair his ability to earn a living, the courts have traditionally given greater scrutiny to restrictive covenants within employment contracts, as opposed to such covenants contained in business sales agreements. In the present case, however, neither unequal bargaining status nor impaired ability to earn a living is present. Seen in this context, the covenant does not appear to be unreasonable.
Significantly, certain of our sister states except restrictive covenants contained within partnership agreements from statutes which preclude such covenants in connection with employment agreements. See McCray v. Blackburn, 236 S2d 859 (La. 1970); Akey v. Murphy, 238 S2d 94 (Fla. 1970); Odess v. Taylor, 211 S2d 805 (Ala. 1968). That inequality of bargaining power is a determining factor in judging the reasonableness of a restrictive covenant, is illustrated by our recent decision in
White v. Fletcher/Mayo/Assoc.,
3. If it be argued that the enforcement of this restrictive covenant would be contrary to public policy because it would limit the right of potential patients in the Demorest and Habersham County area to avail themselves of Dr. Rash’s services, it can be argued with at least equal conviction that this would afford countless other people in other areas, both in and outside of the state, the opportunity to have a physician in their areas. There is no reason to conclude that the obstetrical and gynecological needs of persons within a 25-mile radius of Toccoa are any greater than in many other areas of this and other states, nor is there any reason to conclude that the need for the appellant’s services, in the context of this case, is sufficient to outweigh the law’s interest in upholding and protecting freedom to contract and to enforce contractual rights and obligations. See, e.g., Willman v. Beheler,
4. One of the appellant’s contentions is that the covenant is un
6. With respect to the remedy, the plaintiff-appellee takes the position that it has no adequate remedy at law, and thus it has appealed to a court of equity for an injunction. We agree. Damages would be difficult to calculate, and even the awarding of same would not properly vindicate the plaintiff’s rights. Injunctive relief has repeatedly been found appropriate in cases where covenants such as this have been found to be enforceable.
The trial court did not err in its judgment granting the injunction.
Judgment affirmed.
