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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Merrimack

No. 95-865

CONCORD ORTHOPAEDICS PROFESSIONAL ASSOCIATION

v.

H. JAMES FORBES, M.D.

December 4, 1997

Nelson, Kinder, Mosseau & Gordon, P.C., of Manchester (Martha V. Gordon on the brief and orally), for the plaintiff.

Upton, Sanders & Smith, of Concord (Russell F. Hilliard and David P. Slawsky on the brief, and Mr. Hilliard orally), for the defendant.

Glenn W. Bricker, M.D., of Ashland, by brief, pro se, as amicus curiae.

THAYER, J. Pursuant to Supreme Court Rule 8, we accepted the Superior Court's (Smukler, J.) transfer of the following two questions: First, whether the trial court correctly concluded as a matter of law and public policy that the analysis of a covenant not to compete between a physician and a professional association is no different than that generally applied to such covenants? We hold that it did. Second, whether the trial court erred when it granted Concord Orthopaedics Professional Association's (COPA's) request to enforce the covenant not to compete to the extent it applies to COPA's existing patients, but denied COPA's request to the extent the covenant applies to new patients. We hold that it did not.

The defendant, H. James Forbes, M.D., and the plaintiff, COPA, executed an employment agreement containing a covenant not to compete. In consideration for COPA's obligation to pay Forbes deferred compensation, Forbes agreed not to practice orthopaedic medicine within a twenty-five mile radius of any COPA office for two years following his termination. The pertinent section of the covenant reads:

[I]t is specifically agreed that when the Doctor's employment by the Association is terminated for whatever reason, the Doctor shall not practice orthopaedic medicine within a twenty-five (25) mile radius of any office out of which the Association is conducting a practice at the date of termination . . . for a period of twenty-four (24) months.

In 1995, COPA's board of directors voted to change the deferred compensation formula applicable to all physician-shareholders. Consequently, Forbes resigned, embarked on the establishment of a medical office in Concord, and sought declaration from the superior court that the covenant not to compete was unenforceable. COPA commenced a separate action seeking injunctive enforcement of the covenant. The superior court temporarily restrained Forbes from practicing orthopaedic medicine within twenty-five miles of COPA's offices in Concord, Peterborough, and New London. The superior court later partially enforced the covenant by issuing a preliminary injunction. That order restrained Forbes from treating existing COPA patients within a twenty-five mile radius of Concord for two years with an exception for emergency surgery. The superior court declined to enforce the covenant as to new patients, reasoning that COPA lacked a legitimate interest in preventing Forbes from competing for new patients.

Before proceeding, we note that the covenant's term expired on July 31, 1997. Thus, the matter is technically moot. We recognize, however, valid exceptions to the mootness doctrine where the case concerns important matters of public policy and is "capable of repetition, yet evading review." Royer v. State Dep't of Empl. Security, 118 N.H. 673, 675, 394 A.2d 828, 829 (1978) (quotation and citation omitted); see also Weinstein v. Bradford, 423 U.S. 147, 148 (1975). Covenants not to compete run for various durations. Given that restraints on competition must be narrowly tailored as to duration, see Technical Aid Corp. v. Allen, 134 N.H. 1, 8, 591 A.2d 262, 266 (1991), it is likely that the issues raised here will recur but continue to evade review. Further, the particular questions here warrant attention because the issue of access to physicians greatly affects the public at large.

With respect to the first transferred question, Forbes urges us to declare covenants not to compete involving physicians to be against public policy and per se unenforceable. We decline Forbes' invitation.

Forbes argues that such covenants impermissibly burden the physician-patient relationship. The weight of authority, however, supports enforcement of reasonable covenants not to compete involving physicians. See, e.g., Jewett Orthopaedic Clinic, P.A. v. White, 629 So. 2d 922, 925 (Fla. Dist. Ct. App. 1993); Pittman v. Harbin Clinic, 437 S.E.2d 619, 621 (Ga. Ct. App. 1993); Gillespie v. Carbondale & Marion Eye Ctrs., 622 N.E.2d 1267, 1270 (Ill. App. Ct. 1993); Raymundo v. Hammond Clinic Ass'n, 449 N.E.2d 276, 281 (Ind. 1983); Ohio Urology, Inc. v. Poll, 594 N.E.2d 1027, 1031 (Ohio Ct. App. 1991); see also 54A Am. Jur. 2d Monopolies, Restraints of Trade, and Unfair Trade Practices