Morris James Blogs
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Delaware Superior Court Enforces Noncompetition Covenant Against Physician Placed on “Garden Leave” Following Notice of voluntary Termination of Employment
The Delaware Superior Court has rejected the effort of a physician, bound by a noncompetition covenant with his former practice group, to argue that the covenant was unenforceable because the practice placed him on “garden leave” during the final four-and-a-half months of the contract’s mandatory six-month notice period. During a typical garden leave, the departing physician would get paid, but he or she could not practice.
The Court ruled that the physician’s effort to repudiate his noncompetition obligations by bringing suit against his former practice constituted an anticipatory breach of the physician’s obligation to pay liquidated damages as a result of going into prohibited competition with the practice following his departure. This case sets a new Delaware precedent, as no Delaware court has formerly decided garden leave could be used when the covenant did not authorize it expressly, but rather gave the practice broad enforcement authority. More ›