Baugh v. Columbia Heart Clinic, P.A. (Summary)

NON-COMPETITION CLAUSES

Baugh v. Columbia Heart Clinic, P.A., No. 5074 (S.C. Ct. App.  Jan. 16, 2013)

The South Carolina Court of Appeals reversed a trial court’s award under the state’s Wage Payment Act (“Act”).  Two interventional cardiologists sued their former medical practice.  Their agreements with the practice included two non-compete provisions.  One prohibited the cardiologists from practicing within 20 miles of their former practice for one year or forfeit certain financial rights.  The second prohibited any direct or indirect competition with their former practice within a 20-mile radius for one year.  In April 2006, the cardiologists left the practice.  In May, they opened a new clinic within 300 yards of one of their former practice’s offices.  The cardiologists then sued their former practice, seeking a declaratory judgment that the non-compete provisions were unenforceable, as well as injunctions against their enforcement and alleging violations of the Act.  The trial court held the non-compete provisions unenforceable and awarded the cardiologists unpaid compensation under the Act.

The appellate court reversed.  It found that both of the provisions were reasonable, since they did not place unreasonable geographic prohibitions on the cardiologists.  Also, it found that by violating the non-compete provisions, the cardiologists forfeited the financial rights that they sought under the Act, and that the former practice had not violated the Act in denying them those rights.