Question: I need help with part one! Basically the four learning objectives at the top of the first picture. Thank you for your help! This is


Restrictive Covenants in Contracts: Neurology Associates, LLP v. Elizabeth Blackwell, M.D. Leaming Objectives After studying this simulation, students who have mastered the material will be able to: 1. Explain the legal doctrines that govern the use of restrictive covenants. 2. Interpret and apply the rules set forth in current case law. 3. Articulate a cogent argument for each party/side in the dispute. 4. Negotiate a tenable solution as an altemative to a judicial forum. 320 SIMULATION EXERCISE 1 I Restrictive Covenants in Contracts her to a number of physicians in hopes of building the referral base for the practice. 4. In July 2015, Cohn approached Blackwell and told her that he needed her to sign an additional document that was supposed to be part of ber contract but that he had neglected to mention during negotiations. He explained that the document was standard procedure in medical practices and that he had been so basy during the negotiation period that he had forgotien to mention it to Blackwell. He went on to explain that Blackwell should sign the document by the end of the workday and that this would "make the lawyers happy." 5. The document was titled "Addendum to ContractRestrictive Covenant and Noncompete Clause" and read in pertinent part Secrion 1: The paries hereby agree, in considertrion of the exchange of good, valuable, and sufficient consideration, to be bound by the following prowision: For a period of three years after the date of her separation from NA, Blackvell agrees that she will not contruct with any prowider of neurological services, nor compere in any way with NA. within a radiars of 50 miles of NA's practice lacation. It is acknowledged that this restriction covers the entirety of the sourdwestern region of Langville. In this simulation exercise, a physician in a health care 6. Blackwell felt that she should have a lawyer review practice becomes involved in a dispute over a provision the document, but Cobn insisted the addendum in her contract that restricted future employment. was normal procedure and she needed to sign it dweta Producions Geety imapes quickly to make things "legal." He emphasized that he would have to have the signed document by the end of the day or, as it was a condition of her employment, Blackwell's payroll check could Cohn was the primary contact and the parties not be processed until the document was signed. agreed to compensation terms, vacation, on-call Blackwell reluctantly signed the documeat and duties (after bours), and a fringe benefit peckage. submitted it to Cohn. The employment agreement included an arrbitra- 7. In August 2015, Blackwell began to have conflicts binding arbitration in the with Cohn and, to a lesser extent, Valjean. While tion clause requiring that the parties agree to nonfrom the agrement- Cohn and Valjean took frequent vacations during well to have paid time off to the summer, Blackwell was left to staff the practice examinations required to becol alone. She felt overwhelmed and met with Cohn in neutology NA to discuss a more equitable work schedale. Cohn in neurology. NA agreed to a $1,000 payment to be refused any negotiation, explaining that Blackwell used for a course intended to help prepare candi-_ was hired as a "workhorse" and that her salary was dates for the test. Blackwell began her employment fair given the size of the practice and market. Cohn with NA on June 1, 2015. urged Blackwell to continue her hard work and not 3. Immediately after hiring Blackwell, NA paid for to complain about her work schedule. Eventually, Blackwell to accompany the partners to a medical explained Cohn, Blackwell would become a partconference at which they were scheduled to speak. ner in the practice and would enjoy the fruits of At the conference, Cohn and Valjean introduced her laboc. 8. In September 2015, Blackwell continued to handle Pert 2: Scave of Longville Case Law a very heavy caseload, seeing almost twice as many patients as Cohn or Valjean. In response to BlackWellspan Hospital and Medical Group well's plea for additional staff, NA hired a new v. Phillip Bayliss, M.D. physician to help manage the caseload. Although Supreme Court of the State of Longville Blackwell was initially relieved, the situation at work continued to deteriorate. The workload was (2005) such that Cohn kept denying Blackwell's request Facts for time off to prepare for the upcoming board certification exam, advising her to put it off until the - This is the leading case on restrictive covenants/ caseload lightened up a bit. noncompete agreements in the context of medical 9. Blackwell began to receive phone calls from practices in the state of Longville. It has not been recruiters trying to lure her away from the practice modified or reversed since in was decided. to work at a new neurology clinic in Galway Hos- a Wellspan is a not-for-profit healh care system pital (located in the city of Galway). The recruitlocated in Colurnbus County in the southeastern ers offered a significant amoant of moncy because portion of the state of Longville. Bayliss is a physithere was a substantial shortage of neurologists cian specializing in OB/GYN services. in the southwest region of Longville. However, - Wellspan hired Bayliss as its medical director in Blackwell never pursued these opportunities 2000, at which time Bayliss signed an employment because she believed the restrictive covenant pre- agreement that included a restrictive covenant under vented her from working in Galway. Which Bayliss agreed not to engage in medical prac- 10. In January 2016, Blackwell was granted her paid tice in Columbus County and five other contiguous leave to prepare for her board certification, and she counties (this covered the entire southeastern region took the exam in February 2016. However, after of Longville) for a period of two years after the she returned to the practice, she began to feel even separation of employment between Wellspan and more isolated from the other physicians. Bayliss. 11. On March 1, 2016, Blackwell, fed up with NA, - Wellspan invested over $1 million in equipping announced that she was giving NA 60 days' notice Bayliss's practice, hiring additional physicians, and that she was leaving the practice to join Galway undertaking promotional strategies intended on Hospital and that her resignation would be effoc- marketing the practice and increasing the number of tive on May 1, 2016. She anticipated starting at referrals. Galway on June 1, 2016. Galway was forming a I Relations between Wellspan and Bayliss deterionew neurology practice group, and it had offered rated when they disagreed over Wellspan's expanto employ Blackwell as one of the founding physi- sion strategy. In February 2004, Bsyliss resigned his cians in the group. position at Wellspan and established his OB/GYN 12. Cohn immediately sent Blackwell a letter inform- practice only five miles from the Wellspan practice. ing ber that be accepted her resignation but that This was within the area covered under the restricshe had responsibilities under her contract that pre- tive covenunt. vented her from accepting a new position with a I The state's highest court considered the enforceabilcompetitor. ity of Wellispan's restrictive covenant against Beyliss. POINTS OFLAW AND OPINION EXCERPTS Polnt (a) The Longville state courts will enforce a restrictive covenant only if it is reasonably necessary to protect the legitimate interests of the employer, and courts either msy strike down a covenant altogether or may reform (known as bluelining) a covenant if it is overbroad in some way
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