In Oct. 2008, a district court ruled in favor of seven physicians who sued the clinic for what they considered an illegal non-compete clause because it essentially forced qualified physicians to leave the area or quit practicing medicine if the physicians chose to leave the clinic, according to the report.
Great Falls Clinic’s contract bars physicians who leave the clinic from practicing in Cascade County or any surrounding county for three years if they want to receive full profits and partnership from the clinic.
The physician-owned clinic’s compensation structure allows that profits from the clinic as well as some fees for service to be held in clinic-managed accounts for each physician. The physician may only withdraw money from the account upon disability, death, retirement or relocation. The clinic’s contracts also state that if a physician were to break the non-complete clause, he or she would not be eligible to receive the money kept in these accounts, according to the report.
The Supreme Court reversed the district court’s ruling that the former Great Falls Clinic physicians were entitled to their partnership shares plus interest.
The Supreme Court determined that the non-competition clause did not prohibit physicians from practicing their profession. Rather, it stipulated that if they chose to practice in Cascade or surrounding Counties, they risk their profits and partnership.
Five of the physicians signed a written separation agreement upon leaving the clinic. The separation agreement stated that the physicians would received reduced profits upon leaving the clinic, and because of this, the court ruled that they may not pursue a re-trial. The other two physicians who did not sign a separation agreement may pursue a re-trial, according to the report.
Read the Great Fall Tribune’s report on the Great Falls Clinic non-compete case.
