Physician’s Noncompete Unenforceable After He Dissents To Merger

By Mark Wiletsky Are physician noncompete agreements enforceable? They can be, depending on the circumstances, though there are few reported decisions in Colorado analyzing such agreements. In one recent case, the Colorado Court of Appeals concluded that, following a merger, the surviving physicians entity could not enforce a noncompete provision against a dissenting shareholder-physician. The Court also concluded that an amount of damages calculated under a liquidated damages clause in the agreement must be reasonably related to an actual injury suffered by the entity as a result of the physician’s departure and competition, not simply a prospective injury estimated at the time the contract was created. Crocker v. Greater Colorado Anesthesia, P.C., 2018 COA 33. Noncompete and Liquidated Damages Provision Anesthesiologist Michael Crocker was a shareholder in, and employee of, Greater Colorado Anesthesia, P.C. (Old GCA). In April 2013, Dr. Crocker signed a shareholder…

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