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HomeMy WebLinkAbout2007-0648 Civil NEPHROLOGY ASSOCIATES OF CENTRAL PENNSYLVANIA, INC., PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. MOHAMED F. ELNOUR, M.D., DEFENDANT 07 -0648 CIVIL TERM IN RE: PLAINTIFF'S PETITION FOR A PRELIMINARY INJUNCTION BEFORE BAYLEY. J. OPINION AND ORDER OF COURT Bayley, J., March 9, 2007:-- On February 2, 2007, plaintiff, Nephrology Associates of Central Pennsylvania, Inc., filed a complaint against defendant, Mohamed F. Elnour, M.D. Ancillary to the complaint, plaintiff filed a petition for a preliminary injunction to enforce a restrictive covenant and a non-compete covenant in a Shareholder Employment Agreement. Hearings were conducted on February 7, 12 and 21, 2007. Nephrology Associates of Central Pennsylvania, Inc., was incorporated in 2001 by two shareholders, Julie Rothman, D.O., and Mohamed Elnour, M.D. Rothman and Elnour are internists who practice solely in the subspecialty of nephrology, which is the treatment of kidney diseases. Prior to their forming Nephrology Associates, Rothman and Elnour practiced nephrology together with Cowley Associates, which was part of the Beacon Medical Group. Nephrology Associates has employed several non- shareholder nephrologists, one of whom, starting on October 1, 2002, was Robert 07 -0648 CIVIL TERM Gradzki, M.D. Gradzki became the third shareholder of Nephrology Associates in October 2004. The physicians in Nephrology Associates practice in all of the hospitals and many dialysis units in the greater Harrisburg area. On December 2, 2005, Rothman, Elnour and Gradzki entered into a new Shareholder Employment Agreement. Paragraph 5(a) provides that the initial term is one year from the date of the Agreement. Paragraph 6 provides: Termination of Employment. (a) This Agreement may be terminated by either party at any time upon ninety (90) days written notice to the other party. (b) This Agreement shall otherwise immediately terminate at any time if the Employee should cease to be authorized to practice medicine in the Commonwealth of Pennsylvania, if Employee dies, retires, or becomes permanently disabled (as defined in Paragraph 8), or if Employee is removed from employment for cause as hereinafter defined. Provided, however, that the provisions of Paragraphs 9,10,11,12,13,14 and 15 hereinafter shall, nevertheless, survive termination of this Agreement to the extent of any obligation existing hereunder on or after the date of termination. (c) For purposes of this Agreement, Employee's employment may be terminated immediately "for cause" for the following types of situations as determined by the Board in its sole discretion: (i) If a limitation or restriction is imposed by a governing body upon any of Employee's licenses; (ii) If Employee engages in materially unprofessional, dishonest, or fraudulent conduct or conduct which is detrimental to the reputation, character, or standing of the Employer; (iii) If Employee abuses alcohol or other substances such that it interferes with hislher ability to render professional judgment on patient care matters; (iv) If Employee violates any material obligation under this Agreement; (v) If Employee fails to obtain and maintain all necessary licenses to practice medicine for Employer upon final action by a professional medical organization; (vi) If Employee pleads guilty or no contest to or is convicted of a -2- 07 -0648 CIVIL TERM felony or is professionally censured; (vii) If Employee's privileges at any Hospital or Dialysis Unit are suspended, revoked or not renewed; (viii) If Employee is excluded from any federal or state health Insurance program; (ix) If Employee embezzles or diverts any of the Employer's funds. (Emphasis added.) Paragraph 12 provides: Restrictive Covenant. (a) The Employee acknowledges that Employer has expended and continues to expend considerable time and effort to develop and maintain its current professional relationships with local physicians, hospitals, and other inpatient and outpatient health care facilities at which Employer now provides or in the future will provide professional services (collectively referred to as the "Facilities"). The Employee further acknowledges these are the primary sources of the employer's ongoing practice success and that Employer has a legitimate business interest in protecting its professional relationship with these Facilities. The Employee further recognizes that Employee's entering into competitive practice would likely deprive the Employer of some or all of these practice sources to the substantial detriment of Employer's ongoing practice. (b) Accordingly, while Employee is employed hereunder and for a period of eighteen (18) months from and after the date the Employee's employment with Employer ends (for any reason), the Employee shall not on behalf of himself or any business or entity: (1) engage in the practice of medicine as a nephrologists to provide services provided by Employer (collectively referred to as "Nephrology Services") within the following restricted area: a fifteen (15) mile radius of any Facility at which the Employer is providing services at the time of termination of Employee. (c) In addition thereto, Employee covenants and agrees that during hislher employment hereunder and for a period of eighteen (18) months from and after the date the Employee's employment ends (for any reason), the Employee shall not manage, operate, control, or participate in the management, operation, and control of, own a proprietary interest in (either as a general partner, a limited partner, shareholder, proprietor, or otherwise) or have a financial interest in any individual partnership, firm, corporation, or institution which provides Nephrology Services in or to any of the Facilities, or which is owned by or operated by any of the -3- 07 -0648 CIVIL TERM Facilities or any affiliates thereof. (d) The Employee and the Employer agree that the covenants and agreements of Employee herein contained are reasonably necessary to protect the interests of Employer in whose favor said covenants and agreements are imposed in light of Employer's medical practice and the professional involvement of Employee in such practice. Employer further covenants and agrees with Employee that all physician-employees hereafter hired by the Employer shall be hired only on the condition that such employees sign the same covenant and agree to the same conditions as herein set forth. (e) Employee acknowledges that if Employee violates this restrictive covenant, it will result in irreparable harm to the Employer, and Employer is empowered to enforce Employee's covenant by obtaining an injunction in court (without having to post any bond). If the Employer does obtain such an injunction, and Employee had practiced competitively in the interim, the eighteen (18) month period will begin to run from the date the injunction is actually granted. (f) Employee agrees that if Employee violates this restrictive covenant, even a grant of injunctive relief may not fully compensate the Employer for the damage suffered from the competitive actions while Employee is in breach of the covenant. Therefore, in addition to an injunction, the Employer may pursue any other available remedies (including, but not limited to, recovery of money damages, court costs, legal fees and the like) as compensation for Employee having competed. (g) In the event that the Employee shall contest the enforceability of this provision of the Employment Agreement, then the period of the restrictive covenant shall be deemed suspended at the time of the filing of such action in which the enforceability is contested. In the event the enforceability of the restrictive covenant is upheld by a court of competent jurisdiction, all periods of appeal relating hereto having expired, then the "remaining portion" of any such time period shall automatically thereafter once again become effective. For purposes of this provision, the "remaining portion" of any such period shall be the difference between the full stated time period of eighteen (18) months less any time that the Employee complied with such provision prior to the filing of the aforesaid action, less any time that the Employee was restrained by any injunction ordered issued by any court of competent jurisdiction from violating any such provision during the pendency of such action or proceeding. (Emphasis added.) Paragraph 13 provides: -4- 07 -0648 CIVIL TERM Non-solicitation Covenant. In furtherance of this Agreement and as an inducement to the Employer to enter into this Agreement, and since the Employer will substantially contribute to the Employee's capacity to practice hislher profession by reason of the Employer's existing and future business relationships and other present and future contracts and arrangements for the provision of Nephrology Services, the Employee covenants that, while Employee is employed hereunder and for a period of eighteen (18) months from and after the date Employee's employment with Employer ends (for any reason), Employee shall not: (1) solicit patients of Employer's practice; or (2) solicit contracts to provide Nephrology Services at any of the Facilities. The Employee acknowledges that the remedy at law for the breach of this covenant shall be inadequate and the Employer shall be entitled to immediate injunctive relief to prevent future andlor continued violations as well as a claim for damage and such other legal or equitable remedies as may be available arising from such violation. In the event of any breach hereof, the time limitation expressed above shall be tolled from the date of said breach. Further, injunction relief shall be available to the Employer without the necessity of posting any bond in cash or otherwise. (Emphasis added.) On September 8, 2006, defendant was served with a Notice of Special Meeting of the Board of Directors of Nephrology Associates of Central Pennsylvania, Inc., to be held on September 11, 2006. The Notice set forth that the meeting was called to "consider the following action:" 1. The termination of the employment of Mohamed F. Elnour, M.D. ("Dr. Elnour") with the Corporation under the terms of the Shareholder Employment Agreement between Dr. Elnour and the Corporation, dated December 2, 2005; 2. The purchase of the shares of stock in the Corporation currently owned by Dr. Elnour under the terms of the Stock Purchase Agreement between Dr. Elnour and the Corporation, dated December 2, 2005; and 3. Such other action that will be deemed by the Board of Directors necessary to effectuate the termination of Dr. Elnour's employment with the Corporation and the purchase of Dr. Elnour's shares of stock in the Corporation. (Emphasis added.) -5- 07 -0648 CIVIL TERM Dr. Elnour appeared at the special meeting and was invited by Drs. Rothman and Gradzki to participate. Elnour would not participate. He asked for some documents and left the meeting. Rothman and Gradzki voted to terminate Elnour's employment with Nephrology Associates. A written Notice of Termination of Employment dated September 11,2006, was delivered to Elnour. It included the following information: . . . your employment with the Corporation has been terminated effective ninety (90) days from the date of this Notice, pursuant to paragraph 6(a) of your Shareholder Employment Agreement with the Corporation, dated December 2, 2005 (hereinafter "Employment Agreement"). You will not be permitted to continue practicing nephrology for the Corporation for that ninety (90) day period. However, the effective last day of employment in accordance with your Employment Agreement will be December 10, 2006 (hereinafter "effective Date of Termination"). The Corporation will continue to pay your salary and benefits during this period. So long as you are not in breach of any of your written agreements with the Corporation or violate their terms, the Corporation will pay to you all other remuneration, less appropriate offsets, that may be due to you under the terms thereof, including those amounts that may be due under the Employment Agreement and the purchase price for your shares of stock in the Corporation in accordance with the Stock Purchase Agreement, dated December 2, 2005. *** Please be advised that your ability to continue to practice nephrology is restricted for a period of 18 months from the Effective Date of Termination under paragraph 12 of the Employment Agreement. Under that paragraph's restrictive covenant, you are prohibited from practicing nephrology within 15 miles of any of the following facilities: 1 . Corporate Offices: (a) 205 Grandview Avenue -6- 07 -0648 CIVIL TERM Camp Hill, PA 17011 (b) 4343 Union Deposit Road Harrisburg, PA 17110 2. Hospitals: (a) PinnacleHealth: (1) Harrisburg Hospital 111 South Front Street Harrisburg, PA 17101 (2) Community General Osteopathic Hospital 4300 Londonderry Road Harrisburg, PA 17105 (b) Holy Spirit Hospital 503 North 21 st Street Camp Hill, PA 17011 (c) Polyclinic Hospital 2601 North Third Street Harrisburg, PA 17110 3. Dialysis Units: a. Bio-Medical Applications of Pennsylvania, Inc. flhlc Fresenius Medical Care Holdings, Inc.: (1) Capitol 1300 Linglestown Road Harrisburg, PA 17110 (2) BMA of Harrisburg 4343 Union Deposit Road Harrisburg, PA 17111 b RCG-Fresenius 75 Evelyn Drive Millerburg [sic], PA 17061 c. RCG-Fresenius 3rd Street Harrisburg, PA d. Renal Treatment Centers -Northeast, Inc. flkla Davita, Inc. 425 North 21 st Street Camp Hill, PA 17011 e. DCA: (1) DCA of Lemoyne 27 Miller Street Lemoyne, PA 17043 (2) DCA of Mechanicsburg -7- 07 -0648 CIVIL TERM 120 South Filbert Street Mechanicsburg, PA 17055 (3) DCA of Carlisle 101 Noble Boulevard Carlisle, PA 17013 4. L-TAC (Long Term Acute Care): (a) Select Medical Corporation 4716 Old Gettysburg Road Mechanicsburg, PA 17055 (b) TriumphlSCCI 2501 North Third Street, 4th Floor Harrisburg, PA 17110 5. HealthSouth Rehabilitation 175 Lancaster Boulevard Mechanicsburg, PA 17055 (Emphasis added.) 1 The Notice set forth that Elnour was terminated pursuant to paragraph 6(a) of the Shareholder Employment Agreement, which provides for termination by either party at any time upon ninety days written notice. Dr. Rothman testified that while Dr. Elnour is one of the best nephrologists she has ever known, his termination resulted from problems she and Dr. Gradzki had with him in the management of their medical practice. She testified that Elnour's behavior had become increasingly erratic. He became less interested in his work; refused some work; often did not respond to pages for hours; did not always make his rounds; would leave racks of patient charts undone for weeks; would sometimes leave the office before his patients had completed 1 The Millersburg facility is in western Dauphin County, north of Harrisburg. The Carlisle facility is in central Cumberland County, west of Harrisburg. All of the other Harrisburg facilities are in western Dauphin County, across the Susquehanna River from the facilities in the eastern Cumberland County communities of Camp Hill, Lemoyne and Mechanicsburg. -8- 07 -0648 CIVIL TERM receiving their medicines; would schedule patients for office visits and, on a whim, decide not to see them; at one point he decided that he would not see new patients in the office, although this changed after his revenues went down. Elnour verbally abused office staff, verbally abused Rothman, and complained about Rothman being president of the corporation. Elnour was upset after an employee in the business office had been terminated for incompetence, because he wanted to give the employee three months salary, which Rothman thought was irresponsible. Elnour complained that requiring Dr. Sbaiti, a physician with Nephrology Associates, to pay back thousands of dollars for the cost of some insurance when he left the practice was not right, another position which Rothman thought was irresponsible. Rothman testified that Elnour would often not communicate with her and Gradzki, and he was generally mean to Gradzki. She testified that Elnour is "very temperamental, you cannot argue with him about anything, he will not listen to you. He never arrives for meetings on time. He never stays in meetings." On one occasion, Elnour argued with Rothman, Gradzki and the office administrator in a restaurant to the point of their embarrassment because he was overheard by other patrons. The issue was whether Elnour should have prepared a discharge summary for a patient at Holy Spirit Hospital. After six months, the hospital was demanding that it be completed. Elnour had previously asked Rothman whether she thought he should do the discharge summary. She told him that he should, and he "stormed out, refusing to do it." Elnour finally did the discharge summary. -9- 07 -0648 CIVIL TERM Rothman testified that "the straw that broke the camel's back" was when Elnour told her that he wanted all of the physician schedules changed so that he would never have to give or take sign-out responsibilities at medical facilities from Gradzki. Rothman testified that "you cannot have a practice where one party refused to talk to another partner." Some of these problems were corroborated by Dr. Gradzki, Carla Arts, a registered nurse who formerly worked for plaintiff, and Cyna McKenzie, the practice administrator. Rothman testified that efforts to address and meaningfully discuss these problems with Elnour went unheeded. Dr. Elnour testified and denied much of this testimony. He called witnesses who corroborated some of his testimony. He denied that he had become less interested in his work. He testified that he did not devote less time to the practice, took less vacation than he used to, did not take fewer calls, and covered for Rothman on many occasions. Elnour testified that he always had his cell phone on. As to missing pages and phone calls, he testified, "I do have my share of not answering, not answering is a misnomer," because sometimes he is not able to answer depending on what he is doing. He knows of no occasion when a patient was caused harm because he was delayed in responding to a page or phone call. As to the discharge summary at Holy Spirit Hospital, Elnour testified it was Gradzki's patient, and that he only saw the patient on the last day. Therefore, he still believes that Gradzki should have prepared the discharge summary. Elnour testified that the employee who was dismissed was not incompetent, but -10- 07 -0648 CIVIL TERM had serious medical problems. Even though he agreed with the termination, he felt that the right thing to do was to pay her some severance for the good work she had done in the past. Likewise, when Dr. Sbaiti left the practice, he did not believe that it was right to require him to pay back some insurance costs that were part of an Employment Agreement. Elnour maintained that he took more consults than Rothman and Gradzki. As to the charts not being done for months, Elnour testified that these were not instances where blood tests were obtained without notification to patients. He ultimately completed his office charts and no patient was ever harmed in any way by the manner in which he did that work. Elnour testified that he never refused to take dialysis rounds, although like any other physician, he was occasionally late in getting to them. He testified that he actually took a disproportionate number of new patients in the office. What he did do was refuse to overbook patients. He testified that he never abused staff. He vehemently denied that his behavior had become erratic. He objected to Rothman being president of Nephrology Associates for life. As to his perception of the issues between him and Rothman, Elnour testified: A. I think it is things built up. This whole thing now projected as work problems were related to issues of disagreement in, A, management, and, B, favoritism and nepotism. One of the second main problems that this decision was taken by Dr. Rothman, that had insisted on bringing on long time friend of hers to the office in a senior job. I resisted that, I opposed to that on many occasions. Within days, if not hours of my departure, that friend of hers came to be the first person or second person in the office. That was another thing, in addition to the situation and Dr. Sbaiti, but the main issue was -11- 07 -0648 CIVIL TERM the presidency. The "issue" regarding the presidency that he refers to is a provision in paragraph 1 of Article VII of the Corporate Bylaws that provides: Executive and Other Officers. The executive officers of the corporation, with the exception of the President and Vice President, shall be chosen by the shareholders and shall be a president, vice president, secretary and treasurer. The president shall be Julie Rothman, D.O., until her resignation, permanent disability, disqualification or death, which position is not subject to vote by the shareholders as long as Dr. Rothman is eligible to serve in that capacity. . . .2 As to the problems between the parties, Elnour summarized by saying that he was "being castigated because of what were disagreements in management." For the three months between September 11, 2006, and the effective date of his termination on December 10, 2006, Elnour did not practice medicine. He was paid $70,000 by Nephrology Associates for the three months, plus he received full benefits.3 In the latter part of December, 2006, Elnour opened up his own nephrology practice, the Center for Kidney Disease and Hypertension, LLC. His office is in Camp Hill, a short distance from the corporate Camp Hill office of Nephrology Associates. Elnour placed an advertisement in a Harrisburg paper announcing the opening of his practice. He sent notification letters to area physicians stating that he would be providing services in the dialysis centers in the Harrisburg area. He testified that he has visited 2 Another provision designates Dr. Elnour as Vice President under the same terms. 3 His annual salary was $270,000. -12- 07 -0648 CIVIL TERM dialysis centers served by plaintiff where he has talked to some of his former patients to "let them know what happened," and that he would accept patients, including former patients. He has given his new business card to people receiving dialysis treatment at these centers. Because of the nature of kidney disease, very few patients consult a nephrologist directly. Ninety-nine percent of the patients of Nephrology Associates are referred by other physicians, mainly primary care physicians, and from hospitals.4 Obligated to comply with patient requests, plaintiff has transferred 43 dialysis patients to Elnour from its Davita unit, and 5 from its Mechanicsburg unit since Elnour has opened his own practice.5 In November 2006, plaintiff had 52 new patient consults, 56 in December, and 27 in January, only six of which were after January 15. Other than Dr. Elnour's current practice, which he just started, the physicians practicing nephrology in the greater Harrisburg area are: 1. Plaintiff, Nephrology Associates of Central Pennsylvania, Inc., with a principal office at 205 Grandview Avenue, Camp Hill, and a satellite office at 4313 Union Deposit Road, Harrisburg. There are four physicians in this practice. One is leaving and another one will start in July 2007. 2. Hershey Kidney Specialists, with offices at 4700 Union Deposit Road, 4 Nephrology Associates accepts all patients even if it is not paid for its services. 5 When defendant worked for Nephrology Associates, he was the director of the Davita dialysis unit. Nephrology Associates has designated one of its physicians as director -13- 07 -0648 CIVIL TERM Harrisburg, 254 East High Street, Carlisle, and 38-42 North Londonderry Square, Palmyra. There are four nephrologists in this practice; one is part-time. There was testimony by Elnour and a nephrologist from Lewistown that they have heard that one of the physicians is leaving this practice. 3. Cummings Associates, PC, at 1617 North Front Street, Harrisburg. Dr. Cummings practices alone. He has hired a nephrologist who will start in October, 2007, and is recruiting another. 4. Cumberland Valley Nephrology, with an office at 64 South West Street, Carlisle, and another office in Chambersburg. There are two nephrologists in this practice. 5. Penn State Nephrology, with offices at the Penn State Milton Hershey Medical Center in Hershey, 121 Nyes Road in Harrisburg, and 101 Erford Road, Camp Hill. There are seven nephrologists in this practice. Some of them may devote significant time to their duties at the Hershey Medical Center. The shareholders of Nephrology Associates have always required their non- shareholder physicians to sign a non-shareholders agreement containing a restrictive covenant and non-compete clause. There have been nephrologists who left plaintiff who have complied with the restrictive covenant and non-compete clause in their employment contracts, one of whom now practices in Lewistown and testified for defendant. to replace defendant. -14- 07 -0648 CIVIL TERM Dr. Elnour started with Cowley Associates in 1992, and Dr. Rothman in 2000. Elnour has practiced nephrology in the Harrisburg area since 1990, and Rothman has practiced nephrology in the Harrisburg area since 1989. Cowley Associates became part of the Beacon Medical Group, of which Elnour and Rothman were shareholders. In 2000, Beacon Medical Group bought out Rothman's restrictive covenant with her prior practice group. When Rothman and Elnour left Beacon Medical Group in 2001, they each bought out their restrictive covenants, Elnour's costing $150,000. LEGAL PRINCIPLES A preliminary injunction seeks to maintain the status quo until the rights of the parties can be finally adjudicated. New Castle Orthopedic Associates v. Burns, 481 Pa. 460 (1978). In T.W. Phillips Gas and Oil Co. v. Peoples Natural Gas Co., 89 Pa. Commw. 377 (1985), the Commonwealth Court of Pennsylvania set forth the well- established standards necessary for the issuance of a preliminary injunction: A court may grant a preliminary injunction only where the moving party establishes the following familiar elements: (1) the relief is necessary to prevent immediate and irreparable harm which cannot be compensated by damages; (2) greater injury will occur from refusing the injunction than from granting it; (3) the injunction will restore the parties to the status quo as it existed immediately before the alleged wrongful conduct; (4) the alleged wrong is manifest and the injunction is reasonably suited to abate it; and (5) the plaintiff's right to relief is clear. (Citation omitted.) As set forth in Piercing Pagoda, Inc. v. Hoffner, 465 Pa. 500 (1976), and Ress v. Barent, 378 Pa. Super. 397 (1988), a restrictive covenant must meet three requirements: -15- 07 -0648 CIVIL TERM (1) the covenant must relate to the contract for the sale of goodwill or other subject property or to a contract of employment; (2) the covenant must be supported by adequate consideration; and (3) the application of the covenant must be reasonably limited in both duration and geographical extent. If the enforcement of a restrictive covenant involves a restraint on a physician, close judicial scrutiny is required. New Castle Orthopedic Associates v. Burns, supra; Herman v. Dixon, 393 Pa. 33 (1958). Where physicians are involved, New Castle and Herman stand for the proposition that there must be urgent necessity for the prevention of irreparable harm in order to justify peremptory relief. One factor to be considered is the effect of such action upon the interest of society as a whole as it relates to the effect upon the consumer who needs the services of a physician. As set forth in New Castle, "[t]his is of particular significance where equitable relief is being sought and the result of such an order or decree would deprive the community involved of a desperately needed service." In West Penn Specialty MSO, Inc. v. Nolan, 737 A.2d 295 (Pa. Super. 1999), an oncologist was employed by plaintiff pursuant to an employment agreement that included non-compete covenants. The covenants restricted the physician from competing with the employer by prohibiting her from practicing within a ten mile radius of the employer's practice "directly or indirectly" during the five year term of the employment agreement and for an additional one year after the expiration of the -16- 07 -0648 CIVIL TERM agreement. Six months into the five year term, the oncologist voluntarily left plaintiff's practice. The Superior Court of Pennsylvania upheld the grant of a preliminary injunction against the physician to enforce a ten mile, five year non-compete clause. The Court noted: "An injury is regarded as 'irreparable' if it will cause damage which can be estimated only by conjecture and not by an accurate pecuniary standard." Sovereign Bank v. Harper [449 Pa. Super. 578, 674 A.2d 1085, 1091 (1996)]. Our courts have held accordingly, that "[i]t is not the initial breach of the covenant which necessarily establishes the existence of irreparable harm but rather the unbridled threat of the continuation of the violation," and incumbent disruption of the employer's customer relationships. John G. Bryant Co. v. Sling Testing and Repair, 471 Pa. 1, 8, 369 A.2d 1164, 1167 (1977). Thus, grounds for an injunction are established "where the plaintiff's proof of injury, although small in monetary terms, foreshadows the disruption of established business relations which would result in incalculable damage should the competition continue in violation of the covenant." New Castle Orthopedic Assoc's, 481 Pa. at 466, 391 A.2d at 1386. The effect of such disruption may manifest itself in a loss of new business not subject to documentation, the quantity and quality of which are "inherently unascertainable." Id. at 8, 369 A.2d at 1167. DISCUSSION I. Dr. Elnour maintains that the restrictive covenants cannot be enforced because there was no adequate consideration to support the restrictive covenant in his Shareholder Employment Agreement. He cites Davis & Warde, Inc. v. Tripodi, 420 Pa. Super. 450 (1992), in which the Superior Court stated that when an employee enters into an employment contract containing a covenant not to compete subsequent to employment, the covenant must be supported by new consideration which can be in the form of a corresponding benefit to the employee or a beneficial change in his -17 - 07 -0648 CIVIL TERM employment status. These are not the facts in the present case. The Shareholder Employment Agreement entered into by Rothman, Gradzki and Elnour on December 2, 2005, set forth that "the parties wish to terminate all prior employment agreements," and "desire to state the terms of Employee's employment with Employer." The Agreement provides that it is being entered into "in consideration of the mutual covenants herein contained." The restrictive covenants are only a part of a comprehensive Agreement. The Agreement is a fully integrated contract setting forth all aspects of their practice of medicine for plaintiff's corporation, which was the consideration.6 In Sidco Paper Co. v. Aaron, 465 Pa. 586 (1976), the Supreme Court of Pennsylvania stated that our courts will permit the equitable enforcement of post- employment restraints which are incident to the employment relation between the parties to the covenant, reasonably necessary for the protection of the employer, and reasonably limited in duration and geographic extent. II. Dr. Elnour, citing paragraph 12 of the Employment Agreement, which provides that if an employee contests the enforceability of the restrictive covenants then the 6 The shareholders signed Stock Purchase Agreements at the same time they signed Shareholder Employment Agreements. The comprehensive Shareholder Employment Agreement contained provisions describing: Employment, Duties, Facilities and Insurance, Full-time Employment, Terms and Conditions which include Term of Employment, Basic Work Schedule, Vacation, Conference and Post-graduate Education, and Emergency Calls, Termination of Employment, Compensation, Disability, Deferred Compensation, Bonus Payments, Business Expenses, Restrictive Covenant, Non-solicitation Covenant, Medical Director Agreements with Dialysis Units, Medical Records, Arbitration, Prior Employment Agreements, and Various, which includes Lack of Assignability by either Employer or the Employee. -18- 07 -0648 CIVIL TERM period of the covenants shall be deemed suspended at the time of the filing of such action in which the enforceability is contested, maintains that the covenants have no force and effect at this time; therefore, plaintiff cannot obtain a preliminary injunction to enforce them. This conclusion is legally flawed. It is not the covenants that are suspended under paragraph 12; rather, it is the period of the covenants. Clearly, plaintiff is not precluded by paragraph 12 to seek enforcement of the covenants by which defendant is not abiding. If a preliminary injunction is issued, paragraph 12 delineates when the eighteen month period of the covenants will commence. III. Dr. Elnour maintains that plaintiff is not entitled to a preliminary injunction because it comes to court with unclean hands due to a flawed termination process relating to (1) there being no "supermajority vote" to terminate him, and (2) the invalidity of the special meeting that was called which resulted in his termination. The doctrine of unclean hands requires that one seeking equitable relief act fairly and without fraud or deceit as to the controversy at issue. See In re Estate of Scharlach, 809 A.2d 376 (2002). First, paragraph 8 of the Second Amended Corporate Bylaws of Nephrology Associates provides: Until the earlier of October 2, 2009, the death, permanent disability or disqualification of Dr. Rothman and Dr. Elnour, a supermajority vote of the Board of Directors, which for purposes of these Bylaws is defined as requiring the agreement of Dr. Elnour and Dr. Rothman (hereinafter "Supermajority Director") to cast their votes on the particular matter in concurrence with one another for or against the matter, shall be required to take any action which would result in a -19- 07 -0648 CIVIL TERM material change in the nature or direction of the business of the Corporation; to agree to any merger or acquisition involving the Corporation; to agree to a material change in an employed- physician's work schedule or allocated vacation time; to take any action to place the Corporation in bankruptcy or litigation, or otherwise terminate the Corporation; to enter into any contractual obligation affecting the clinical performance of the Corporation as an entity or through any of its physician employees; to authorize debt of the Corporation in excess of $100,000; or to authorize expenditures obligating the Corporation in excess of $50,000 . . . . Only the concurrence of the Supermajority Directors is required to materially change the work schedule and vacation time of Dr. Rothman or Dr. Elnour, or to authorize the service of a notice of breach -20- 07 -0648 CIVIL TERM of a physician's employment agreement under Article II of these Bylaws. (Emphasis added.)7 Dr. Elnour argues that his termination involved a material change in direction of the company because he co-founded it with Dr. Rothman, and his termination involved a significant change in his work schedule. Therefore, his vote was necessary as a supermajority member of the board of directors to terminate himself. There was no change in the nature or direction of the business of Nephrology Associates as a result of the termination of Elnour. It is in the same business of the practice of medicine in the specialty of nephrology. To equate the provision "to materially change the work schedule and the vacation time of Rothman and Elnour" in paragraph 8 of the Bylaws as a requirement to terminate under either paragraph 6(a) or (b) of the Shareholder Employment Agreement, is illogical. A change in work schedule and vacation time is a situation where the doctor continues to work for the corporation, not where the doctor is terminated. If the shareholders had wanted to require a supermajority of the founders of the corporation to terminate a founder, they would have added "termination of employment" to paragraph 8 of the Bylaws. The termination of Elnour by the vote of Rothman and Gradzki did not violate paragraph 8 of the Bylaws so as to support his claim that plaintiff is not entitled to relief because of unclean hands. 7 Disqualification is defined in the Bylaws as "the shareholder's material breach of hislher employment agreement with the Corporation after that shareholder receives written notice of such breach and fails to cure the said breach for a period of thirty (30) days following receipt of such notice." -21- 07 -0648 CIVIL TERM Second, Elnour maintains that his termination was improper because the special meeting conducted to serve him with the Notice of Termination was procedurally invalid under paragraph 6 of the Bylaws, which provides: Special meetings of the Board may be called by the president; special meetings shall be called by the president or secretary on the written request by the majority of the directors in office. Defendant argues in his brief: Here, the Notice of the Special Meeting of the Board of Directors was signed by Dr. Gradzki in his capacity as "Secretary" of the NACP. No where on the Notice did Dr. Gradzki indicate that he had obtained the "written request of a majority of the directors in office" as required by the bylaws. Thus, the manner in which the meeting was called was not done so in compliance with the bylaws and, as a result, Dr. Elnour's termination was improper. Because NACP did not terminate Dr. Elnour in accordance with its own bylaws, it did not act fairly. The Notice was simply signed by Dr. Gradzki as secretary of the corporation. Paragraph 6 of the Bylaws does not require that notice of the special meeting must be signed by two shareholders. Under paragraph 6, special meetings may be called by the president alone, in this case, Dr. Rothman. Special meetings must be called by the president, Dr. Rothman, or secretary, Dr. Gradzki, on the written request of the majority of the directors in office. That means two of the three directors, which includes Dr. Elnour. That was not required here. Accordingly, there is no evidence that the Notice of Termination of September 8,2006, was procedurally invalid under the Bylaws sufficient to support the claim of Elnour that plaintiff may not obtain the relief sought because of unclean hands. -22- 07 -0648 CIVIL TERM IV. Dr. Elnour maintains that the restrictive covenants cannot be enforced because he was discharged without cause. He notes that paragraph 6(b) of the Employment Agreement provides: (b) This Agreement shall otherwise immediately terminate at any time if the Employee should cease to be authorized to practice medicine in the Commonwealth of Pennsylvania, if Employee dies, retires, or becomes permanently disabled (as defined in Paragraph 8), or if Employee is removed from employment for cause as hereinafter defined. Provided, however, that the provisions of Paragraphs 9,10,11,12,13,14 and 15 hereinafter shall, nevertheless, survive termination of this Agreement to the extent of any obligation existing hereunder on or after the date of termination. (Emphasis added.) Defendant argues in his brief: However, the plain language of the Employment Agreement provides that the restrictive covenants only apply to "for cause" terminations. As stated above, Paragraph 6(b) deals with "for cause" terminations. Paragraph 6(b) expressly provides that, "the provisions of Paragraphs. . . 12, 13 hereinafter shall, nevertheless, survive termination of this Agreement. . .." Paragraphs 12(b) and (c) contain the non- compete covenant and Paragraph 13 contains the non-solicitation covenant that NACP is attempting to enforce in this matter. But, because Dr. Elnour was not terminated "for cause" under Paragraph 6(d) of the Employment Agreement, the restrictive covenants have no applicability here. This interpretation of the Agreement is further supported by the language of Paragraphs 12(b), 12(c) and 13 which provide that the non- compete covenants will be in effect "for a period of eighteen (18) months from and after the date the Employee's employment with Employer ends (for any reason) . . . . (emphasis added). See App. A, pp. 12, 14. This "for any reason" language refers back to the "for cause" provision in Paragraph 6(b) and 6(c) which enumerates the reasons for a "for cause" termination. Thus, the restrictive covenants will apply regardless of the reason of the "for cause" termination. Because the plain language of the Employment Agreement provides that the restrictive covenants only apply in the event of a "for cause" termination and Dr. Elnour was not -23- 07 -0648 CIVIL TERM terminated "for cause," then the covenants cannot be enforced against him. Plaintiff responds in its brief: Defendant takes the unsupportable position that just because his employment was terminated upon 90 days notice, under paragraph 6(a) of the Employment Agreement, the covenant not to compete (paragraph 12) and non-solicitation covenant (paragraph 13) are not enforceable. Paragraph 6(a) provides that either Plaintiff or Defendant can terminate the Employment on 90 days notice and does not include the term "without cause." Taking Defendant's argument to its conclusion, he could have terminated the Agreement by giving Plaintiff the requisite 90 days notice under paragraph 6(a) and not be bound by the covenants after he left Plaintiff's employ. This argument is both illogical and not supported by the terms of the Employment Agreement since paragraph 12 and 13 expressly apply during the time of employment and when Defendant's employment with Plaintiff ends "for any reason." Confronted with the "for any reason" language of the covenants, Defendant advances the strained argument that the language refers to only the for cause grounds set forth in paragraph 6(b). Defendant cannot point to any such limitation placed upon the covenants within either paragraph 12 or 13. We agree with plaintiff's position as stated. The restrictive covenant is not unenforceable on the wording of paragraph 6(b) of the Employment Agreement because Elnour was terminated under paragraph 6( a). Paragraph 12(b) specifically provides for the covenant to apply "from and after the date of the Employee's employment with Employer ends (for any reason) . . ." (Emphasis added.) v. Dr. Elnour maintains that utilizing the balancing test set forth in WellSpan Health v. Bayliss, 869 A.2d 990 (Pa. Super. 2005), that a preliminary injunction should not issue. This claim requires a thorough review of the Superior Court opinion in WellSpan. The defendant, Dr. Bayliss, a perinatologist, was employed by WellSpan -24- 07 -0648 CIVIL TERM Health, a health care system based in York County that served patients in south central Pennsylvania and northern Maryland. The primary components of WellSpan were at York Hospital and Gettysburg Hospital. WellSpan recruited Dr. Bayliss in 1993. He signed a professional services agreement that included a post-employment non- competition covenant in which he agreed not to engage in the practice of perinatology in York County or its four contiguous counties (Lancaster, Dauphin, Cumberland and Adams) for two years after termination of his employment. In February 2003, Bayliss resigned from WellSpan and sought to practice at a hospital in Lancaster County that was approximately 26 miles from the York Hospital. WellSpan instituted suit against Bayliss and sought a preliminary injunction. The trial judge upheld the restrictive covenant in York and Adams counties, forbidding Bayliss from engaging in the practice of perinatology and from soliciting referrals of perinatology patients from physicians in those counties until June 30, 2005. The court refused to enforce the covenant in Lancaster, Dauphin or Cumberland counties based on its finding that WellSpan did not compete for perinatology patients in those counties. WellSpan appealed the order with respect to the refusal of the trial court to enforce the covenant in Lancaster, Dauphin and Cumberland counties.8 The Superior Court reviewed existing law with respect to non-competition covenants involving health care professionals. It stated that the presence of a 8 Bayliss did not appeal the issuance of the preliminary injunction with respect to York and Adams counties. -25- 07 -0648 CIVIL TERM legitimate protectable business interest of the employer is a threshold requirement for an enforceable non-competition covenant. Citing West Penn Specialty MSO, Inc. v. Nolan, 737 A.2d 295 (Pa. Super. 1999), the Court noted that the erosion of an ex- -26- 07 -0648 CIVIL TERM employer's patient relationships is a factor in the decision to affirm the grant of a preliminary injunction against an oncologist. The court stated: Furthermore, in the context of a non-competition covenant, we think that the referral basis of a specialized medical care institution are analogist to a physician's patient relationships or an employer's customer relationships. Viewed in such a light, recognition of a patient referral base as a protected interest fits squarely within Pennsylvania law. The Court went on to state that, "[i]f a protected interest is found, the court must apply the balance test articulated in Hess [v. Gebhard & Co., Inc., 808 A.2d 912 (Pa. 2002)] giving appropriate weight to the paramount interest of the public. . . ." The Court described that balancing test: First, the court balances the employer's protectable business interest against the employee's interest in earning a living. Then, the court balances the employer and employee interest with the interest of the public. In weighing competing interest of the employer and employee, the court must engage in an analysis of reasonableness. First, the covenant must be reasonably necessary for the protection of the employer. In addition, the temporal and geographical restrictions imposed on the ex- employee must be reasonably limited. *** Although the public interest is sometimes neglected in the balancing of employer and employee concerns, the interests of the public are of paramount importance in the context of non-competition covenants for physicians. Our Supreme Court has made clear that the courts will undertake a "close judicial scrutiny" of non-competition covenants involving physicians because of the value of their services to the public. New Castle Orthopedic, supra at 464, 392 A.2d at 1387. In New Castle Orthopedic, evidence of long delays experienced by patients who attempted to obtain appointment for orthopedic services led the court to conclude that there was a shortage of orthopedic specialists in the geographic area. This was the major factor in the court's decision to reverse the grant of a preliminary injunction against an orthopedic -27- 07 -0648 CIVIL TERM physician-surgeon. In West Penn, this Court concluded that the public interest analysis of non-competition covenants involving physicians requires a determination of the "quantitative sufficiency of physicians practicing in the restricted area. . .." West Penn, supra, at 300-01 (citing New Castle Orthopedic, supra). When patient demand in the geographical region in question exceeds the ability of appropriately trained physicians to provide expeditious treatment, then the public interest predominates over the right to enforce a non-competition covenant by injunction. The West Penn court cited the presence of numerous oncologists in the area and no evidence of a shortage of oncology services in affirming the grant of a preliminary injunction against an oncologist. These cases show that public interest can be the determinative factor in the balancing test which determines enforceability of the non- competition covenant as applied to a health care provider. As our Supreme Court has stated, "[p]aramount to the respective rights of the parties to the [physician non-competition] covenant must be its effect upon the consumer who is in need of the service." New Castle Orthopedic, supra at 469, 392 A.2d at 1387. The court must analyze whether enforcing the covenant would compromise patients' ability to obtain adequate skilled care in the geographical area in which the health care provider is planning to work. In other words, the court must evaluate the likelihood that consumers could be adequately served by existing health care providers, including alternate health care providers that the employer has on staff or can readily hire to meet patient demand. The interests of the public are paramount. Whether the court respects those interests by granting or denying the injunction or by blue lining the restrictive covenant is dependent on the facts of the case and within the discretion of the court. (Footnotes omitted.) (Some citations omitted.) The Court concluded that "WellSpan identified three legitimate protectable interest in its claim - its patient relationships, its referral base and the confidential information pertaining to its past and present patients." However, the Court found: Because WellSpan did not compete in Lancaster County, the trial court found that the non-competition covenant to be unreasonable and hence unenforceable with regard to that county. We agree with the trial court that a non-competition covenant applied to a geographical area in which the employer does not compete is unreasonable. -28- 07 -0648 CIVIL TERM The facts that supported the holding in WellSpan to not restrain Bayliss from practicing in Lancaster, Dauphin and Cumberland counties, are not present in the case sub judice. Pursuant to WellSpan, we must conduct a balancing test on the evidence in this case. (1) Ninety-nine percent of the patients of Nephrology Associates are referred by other physicians and hospitals. That is a legitimate protectable business interest as are the patient relationships with Nephrology Associates. (2) Dr. Elnour is a highly skilled nephrologist who has practiced in the Harrisburg area for seventeen years. He is widely recognized in the medical community as an outstanding nephrologist. The evidence produced by plaintiff and defendant shows that nephrologists are in demand, and that it often takes time to recruit and obtain them. Two nephrologists who were subject to similar restrictive covenants have previously left Nephrology Associates. One is now practicing in Chambersburg and the other in Lewistown. However, whether Elnour can quickly relocate for the year and a half term of the covenants is problematic.9 Enforcing the covenants will adversely affect his interest in earning a living. (3) The restrictive covenants are reasonably necessary for the protection of plaintiff in that it protects its referral business and patient relationships for a limited 9 Other nearby central Pennsylvania communities that are outside of the fifteen mile limit are Lebanon and Lancaster to the east, York to the south, Chambersburg to the west, and Lewistown to the north. -29- 07 -0648 CIVIL TERM period of eighteen months within a fifteen mile radius of the facilities at which plaintiff is providing services. Elnour acknowledged in paragraph 12 of the Shareholder Employment Agreement the reason for entering into the restrictive covenant, subparagraph (a), and that if he violated the covenant, it would result in irreparable harm to Nephrology Associates, subparagraph (e). He acknowledged, in the Non- solicitation Covenant in paragraph 13, that Nephrology Associates "shall be entitled to immediate injunctive relief" upon a violation. (4) Given the number of nephrologists practicing in the Harrisburg area, there is credible evidence of the quantitative sufficiency of the availability of these specialists. Based on the practicing nephrologists previously listed in this opinion, we find that enforcing the covenant would not compromise patients' ability to obtain adequate skilled nephrology care in the Harrisburg area within the geographical limits of the covenant. The evidence shows that given the long-term nature of the care that nephrologists provide to their chronically ill patients, many patients would sorely miss the personal care of Elnour if he does not practice medicine in the Harrisburg area, or if he practices at a location outside of the geographical restrictions of the covenants for which they would be unable or unwilling to travel. Elnour has a large following of dedicated patients which is evidenced by the forty-eight dialysis patients who, since he has opened his new office, have transferred from plaintiff to his practice. However, the public interest test is not whether there are patients who wish to continue with Elnour. The test is whether enforcing the covenants would compromise patients' ability to -30- 07 -0648 CIVIL TERM obtain adequate skilled care of a nephrologist in the greater Harrisburg area which comprises the geographical area protected by the covenant. We find that it would not compromise that ability.10 Balancing plaintiff's business interest against Elnour's interest in earning a living, considering the limited scope of the temporal and geographical restrictions in the restrictive covenants, and considering the public interest in having sufficient availability to treatment and care by nephrologists, enforcing the covenants in the parties' Shareholder Agreement would be reasonable. This analysis, however, does not end our Inquiry. VI. Dr. Elnour cites AII-Pak, Inc. v. Johnston, 694 A.2d 347 (Pa. Super. 1997), and Insulation Corporation of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995), in maintaining that if a termination of employment is not for cause, a restrictive covenant IS not enforceable. In AII-Pak, Inc., where a manufacturer of packaging materials sought a preliminary injunction to enforce a restrictive covenant against its former sales representative, a trial court denied the preliminary injunction because it had been assigned to a new employer and there was no evidence that the employee consented 10 Dr. Elnour, rather than insisting that he continue to practice with plaintiff for ninety days following notice of his termination pursuant to paragraph 6(a) of the Shareholder Employment Agreement, as he was entitled to do, accepted $70,000 and full benefits during that period. There is no evidence that any patients of plaintiff or any other nephrology patients were unable to obtain adequate care during that ninety days he did not practice nephrology. In fact, the evidence is to the contrary. -31- 07 -0648 CIVIL TERM to the assignment. AII-Pak does not hold that a restrictive covenant is not enforceable where a termination is not for cause. However, recognizing that the employer might still seek a permanent injunction, the Superior Court noted that the trial court would need to -32- 07 -0648 CIVIL TERM address the effect of the employee's termination. The Court stated: The trial court concluded that because Johnston was terminated unilaterally, appellant's right to relief in the form of a preliminary injunction was unclear in light of this Court's recent decision in Insulation Corp. of America v. Brobston, 446 Pa.Super. 520, 667 A.2d 729 (1995). In Insulation Corp. of America v. Brobston, an employer sought to enforce a two year restrictive covenant on an employee who had been fired for poor performance. We held that the fact that the employee was terminated, rather than quit voluntarily, was an important factor when considering the enforceability of a restrictive covenant. On the facts in that case, we determined that it was inequitable for the employer to obtain an injunction against the employee.1o We emphasized, however, that the reasonableness of enforcing such a restriction is determined on a case by case basis. Thus, the mere termination of an employee would not serve to bar the employer's right to injunctive relief. Where, for instance, an employee intentionally engaged in conduct that caused his termination, 11 the employer's right to injunctive relief would survive. However, where an employer terminated an employee for reasons beyond the employee's control, the rule announced in Brobston may bar injunctive relief. (Footnote 12 omitted.) 10 As expressed in Brobston: The employer who fires an employee for failing to perform in a manner that promotes the employer's business interests deems the employee worthless. Once such a determination is made by the employer, the need to protect itself from the former employee is diminished by the fact that the employee's worth to the corporation is presumably insignificant. Under such circumstances, we conclude that it is unreasonable as a matter of law to permit the employer to retain unfettered control over that which it has effectively discarded as worthless to its legitimate business interests. Insulation Corp. of America v. Brobston, 446 Pa. Super. 520, 532, 667 A.2d 729, 735 (1995). 11 It is entirely foreseeable that in a given situation, an employee might decide to try to get around a restrictive covenant by deliberating performing in a poor manner at his job, hoping that his employer will fire him so that he would not be found by any restriction on his post- employment activities. This is why this Court held that every case must be evaluated on its own facts. -33- 07 -0648 CIVIL TERM Insulation Corporation of America v. Brobston involved a products manufacturer seeking to enforce a non-competition covenant against an employee who had been its general manager. The employee was terminated because he failed to do his job to increase sales, which the Superior Court categorized as failing to promote his employer's interest. The Court stated that, "It bears noting that there is a significant factual distinction between the hardship imposed by the enforcement of a restrictive covenant on the employee who voluntarily leaves his employer and that imposed upon an employee who is terminated for failing to do his job." The Court stated "to the extent that previous published decisions do not refer to the reason for the termination of the employment relationship, we now hold that this is a factor that must be considered in order to determine whether enforcement is truly reasonable." A "searching inquiry of all the circumstances surrounding the employment relationship and its termination" is required. The Court concluded that employer's proprietary business information was already protected under injunctive enforcement of a non-disclosure covenant in the same employment agreement as a two year, three hundred mile non-competition covenant in the agreement, and imposing the additional burden of the non-competition covenant on the terminated employee tipped the balance of reasonableness away from the protection of the employer's legitimate business interest and into the realm of undo oppression upon the employee's ability to earn a living. Therefore, the Court reversed -34- 07 -0648 CIVIL TERM the order of the trial court enforcing the non-competition covenant.11 The present case is not a situation where Nephrology Associates brought in a non-shareholder physician, provided training and an opportunity to develop a practice, and then the nephrologist left and competed against the practice. Dr. Rothman and Dr. Elnour both had years of experience when they formed Nephrology Associates in 2001 as equal shareholders. Ironically, if Dr. Gradzki had not become a shareholder, Rothman would not have been able to unilaterally terminate the employment of Elnour. The decision of Rothman and Gradzki to terminate Elnour when they could not resolve their practice differences was reasonable from their point of view. They did not feel that they could continue to practice with him without change. Importantly, however, Elnour was not terminated for any of the eleven categories of "for cause" termination set forth in paragraph 6(b) of the Shareholder Employment Agreement. Nor was there any evidence that the practice difficulties that triggered the termination resulted in any reduced revenues to Nephrology Associates. Nor is there any evidence that the practice difficulties adversely impacted patient care or treatment. 12 11 Several years before Insulation Corporation of America was decided, this court entered a preliminary injunction enforcing a restrictive covenant against a physician in a case where the covenant was ancillary to the sale of a medical practice, and the plaintiff later terminated the physician's employment because of differences relating to the management of the practice and continuing financial losses of the practice. Newport Professional Corporation, P.C. v. Tanner, 43 Cumberland L.J. 376 (1991). 12 There was testimony that Elnour and Rothman differed with respect to providing a morphine drip to one terminal patient. That difference did not break up their practice. -35- 07 -0648 CIVIL TERM Elnour's management skills are not the equal of his medical skills. He testified that he was not satisfied with and did not understand some of the provisions in the Shareholder Employment Agreement and Corporate Bylaws. The best that can be said for that is that he proceeded with his eyes wide shut. In his brief, Elnour argues that he had no reason to be concerned about his career until he was served on September 8, 2006, with the notice of the shareholders' meeting on September 11. That is not credible. If he felt that way, he would not have refused to participate in the special meeting "to consider" his termination because, as he testified, he felt that his termination was a foregone conclusion. He knew of his differences with Rothman and Gradzki, and of their discontent, and that he had not resolved those differences with them. He is a proud man, he does not take criticism well, and he is not a compromising man. He let his termination occur without participating in a last best chance to avoid it. We do not believe, however, that this warrants an inference that he wanted to be terminated. This is a breakup over business practices and personal differences with a founder of Nephrology Associates. It is not a for cause termination or a voluntary termination. That leads us to conclude that, even though the enforcement of the covenants in the Employment Shareholders Agreement would otherwise be reasonable, on the facts of this case, the parties should go their separate ways because imposing the additional burden of the covenants on Elnour tips the balance of reasonableness away from plaintiff's legitimate business interests and into the realm -36- 07 -0648 CIVIL TERM that unreasonably affects Elnour's ability to earn a living. Thus, plaintiff has not established that its right to relief is clear. Therefore, its petition for a preliminary injunction will be dismissed. ORDER OF COURT AND NOW, this day of March, 2007, the petition of plaintiff for a preliminary injunction, IS DISMISSED. By the Court, Edgar B. Bayley, J. Matthew E. Hamlin, Esquire Mette, Evans & Woodside 3401 North Front Street Harrisburg, PA 17110-0950 For Plaintiff Robert E. Kelley, Jr., Esquire Lee S. Cohen, Esquire 300 North Second Street, 10th Floor P.O. Box 62003 Harrisburg, PA 17106-2003 For Plaintiff :sal -37- NEPHROLOGY ASSOCIATES OF CENTRAL PENNSYLVANIA, INC., PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. MOHAMED F. ELNOUR, M.D., DEFENDANT 07 -0648 CIVIL TERM IN RE: PLAINTIFF'S PETITION FOR A PRELIMINARY INJUNCTION BEFORE BAYLEY. J. ORDER OF COURT AND NOW, this day of March, 2007, the petition of plaintiff for a preliminary injunction, IS DISMISSED. By the Court, Edgar B. Bayley, J. Matthew E. Hamlin, Esquire Mette, Evans & Woodside 3401 North Front Street Harrisburg, PA 17110-0950 For Plaintiff Robert E. Kelley, Jr., Esquire Lee S. Cohen, Esquire 300 North Second Street, 10th Floor P.O. Box 62003 Harrisburg, PA 17106-2003 For Plaintiff :sal