Or. Psychiatric Partners, LLP v. Henry

Full title: OREGON PSYCHIATRIC PARTNERS, LLP, an Oregon limited liability partnership…

Court: COURT OF APPEALS OF THE STATE OF OREGON

Case no: A162755

Date published: Aug 22, 2018

Fact:

  • Oregon Psychiatric Partners, LLP (OPP) hired defendant, Henry, as a psychiatric nurse practitioner in July 2013.
  • As part of the employment contract, Henry signed a noncompetition agreement stating that she would not provide services to any patients who had received services from her at OPP for two years after termination of her employment within fifty miles of Eugene, Oregon.
  • Henry rejected a proposed modification to her pay structure in 2014 and informed OPP of her intention to quit in February 2015.
  • Upon leaving OPP, Henry opened her own practice in Eugene and continued to treat some patients she had previously treated while working for OPP.
  • OPP sued Henry to enforce the noncompetition agreement, seeking injunctive relief and disgorgement of her earnings from current or former patients of OPP.

Issue:

  • The main issue revolves around whether the noncompetition agreement between OPP and Henry is enforceable under Oregon law, specifically ORS 653.295(4)(b).
  • ORS 653.295(4)(b) provides an exception to certain requirements and limitations for noncompetition agreements, specifically excluding “a covenant not to *** solicit or transact business with customers of the employer.”

Decision:

The appellate court reversed the trial court’s judgment and remanded the case for further proceedings. They concluded that the trial court erred in dismissing OPP’s complaint because the agreement between OPP and Henry was, in part, enforceable as a nonsolicitation agreement under ORS 653.295(4)(b). The appellate court held that OPP could enforce the agreement to the extent that it prohibited Henry from soliciting or transacting business with customers who would reasonably be expected to return to OPP for business. Further proceedings were deemed necessary to determine whether Henry violated the enforceable aspect of the agreement. Therefore, the appellate court overturned the trial court’s decision and sent the case back for additional proceedings based on their interpretation of the law.

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