Sanford Health, based in Fargo, N.D., and Sioux Falls, S.D., is planning to appeal a July decision by a South Dakota county judge that would restrict the system’s ability to include noncompete clauses in its contracts, according to an Argus Leader report.
Judge Doug Hoffman ruled that noncompete agreements in Sanford’s physician contracts clashed with state law because they have the potential to interfere with physician-patient relationships. The ruling was part of a wrongful termination suit filed by JoAnn Ormand against Sanford.
In South Dakota, noncompete agreements can legally restrict departing physicians from working within 20 miles of their previous office for two years after their employment ends. Judge Hoffman said such restrictions may create an undue burden, such as increased travel, for patients who want to continue seeing their physician after an abrupt termination.
Sanford has said noncompete agreements are so widely used that the judge’s ruling questions the terms under which many members of the state’s medical community work every day, according to the report.
Sanford wants Judge Hoffman to issue a final order on the noncompete agreement portion of the ruling, which would let Sanford appeal to the state Supreme Court.
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