TO: Stacy Warner, Esq. FROM: Rajvir Goomer RE: Dr. Lisa Cuddy Restrictive Employment Covenant DATE: February 10, 2009 Facts: Dr. James Wilson owns Pediatric Place in Princeton, Iowa. Many of Dr. Wilson’s patients were adolescent girls who wanted a female physician. Dr. Lisa Cuddy was hired by Dr. Wilson to work at Pediatric Place in April 2007. Dr. Cuddy was required to sign a twenty five mile, five year restrictive covenant. A full time assistant was the only other employee at that time. Dr. Cuddy had full access to all patient files and became acquainted with many of her patients’ parents. Dr. Cuddy resigned on November 21, 2008 and joined Davenport Pediatrics in Davenport, Iowa as a full-time pediatrician. Davenport Pediatrics was twenty-three miles from the Pediatric Place. Dr. Cuddy did not solicit any of her former patients, however, Davenport Pediatrics advertised her employment and she provided medical care to three of her former patients that saw the newspaper ad. Dr. Cuddy’s sole source of income was her employment as a pediatrician. Dr. Cuddy received a complaint filed by Dr. Wilson in Iowa District Court on December 23, 2008. Question Presented: Whether a five year restriction in a restrictive employment covenant is enforceable. Short Answer: No. Courts have enforced restrictive covenants but have modified them to shorten the term to two to three years. Discussion: Dr. Wilson filed a complaint against Dr. Cuddy for violation of the restrictive covenant she signed when under his employment. Whether a time restriction in a restrictive covenant is enforceable the court considers: “(1) Is the restriction reasonably necessary for the protection of the employer’s business; (2) is it unreasonably restrictive of the
employee’s rights and (3) is it prejudicial to the public interest?” Phone Connection, Inc. v. Harbst, 494 N.W.2d 445, 449 (Iowa Ct. App. 1992)....