Court of Appeals Division II
State of Washington

Opinion Information Sheet

			

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                       DIVISION  II

ROBERT EMERICK,                                                  No.  41597-6-II

                             Respondent,                   UNPUBLISHED OPINION

       v.

CARDIAC STUDY CENTER, INC., P.S.,

                             Appellants.

       Armstrong, P.J.  --  When Dr. Robert Emerick joined Cardiac Study Center's specialty 

practice, he signed a covenant not to compete with Cardiac if he left the practice.  Cardiac 

terminated Emerick, and he filed this action seeking a declaration that the covenant was 

unreasonable and thus unenforceable.    The trial court agreed and granted Emerick summary 

judgment, invalidating most of the covenant's provisions.  On appeal, Cardiac argues that the trial 

court misapplied Washington law in granting the summary judgment.      We agree and, therefore, 

reverse and remand. 

                                            FACTS

       Cardiac is a medical practice group of approximately 15 cardiologists.  The practice has 

provided care to patients with heart disease in Pierce County since 1966.  The practice has four 

offices, each near a hospital.  The hospitals serve as a referral source for Cardiac.

       Dr. Robert Emerick practiced medicine in Memphis, Tennessee for approximately three  

No. 41597-6-II

years before joining Cardiac.  In February 2002, Cardiac hired him as an employee.  In February 

2004, Emerick became a shareholder of Cardiac.  At that time, Emerick signed a shareholder 

employment agreement, which included the covenant not to compete at issue here.  The covenant 

states that if a doctor leaves the group, he promises not to practice competitively in Pierce County 

or Federal Way for a period of five years.  The covenant specifically provides:

       (e) Non-Competition. . . . The Employee further recognizes and acknowledges that 
       because the goodwill of the Corporation's business is a valuable asset, and because 
       the solicitation of patients of referral sources or persons or entities with whom the 
       Corporation contracts, by the Employee, after the Employee has ceased to be 
       employed by the Corporation, will cause irreparable harm to the goodwill of the 
       Corporation, the Corporation would not continue to employ the Employee unless 
       it is assured that such solicitation will not occur.  The Employee therefore agrees 
       and covenants that during the        Employee's employment by the Corporation 
       and for sixty (60) full months after termination of such employment for any reason, 
       the Employee will not, directly or indirectly, (i) anywhere within Pierce County 
       and Federal Way, Washington ("Restricted Area") engage in the practice of 
       cardiac medicine in any manner which is directly competitive with any aspect of the 
       business of the Corporation as presently conducted or as said business may evolve 
       in the ordinary course of business between the date of this Agreement and the 
       expiration of this covenant not to compete, whether or not using any Confidential 
       Information, (ii) anywhere in the Restricted Area, have any business dealings or 
       contracts, except those which demonstrably do not relate to or compete with the 
       business or interests of the Corporation, with any then existing patient, customer 
       or client (or party with whom the Corporation contracts) of the Corporation or 
       any person or firm which has been contacted or identified by the Corporation as a 
       potential customer or client of the Corporation; or (iii) be an employee, employer, 
       consultant, agent, officer, director, partner, trustee or shareholder of any person or 
       entity that does any of the activities just listed.  Provided, however, nothing herein 
       shall preclude a patient from selecting a provider of their choice.  

Clerk's Papers (CP) at 19-20.

       During oral argument below, Cardiac conceded that Emerick should be allowed to 

practice in Federal Way; Cardiac suggested a geographic restriction of a five-mile radius around 

the existing Cardiac centers.  Cardiac also conceded that Emerick should be allowed to see his 

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No. 41597-6-II

former patients from Cardiac. 

       Emerick specializes in interventional cardiology.1  He explained that Cardiac has six other 

interventional cardiologists.  Approximately five other interventional cardiologists practice in 

Pierce County, and three practice in Federal Way.  Cardiac submitted evidence that the distinction 

between interventional cardiologists and non-interventional cardiologists is not critical in 

determining an appropriate physician-to-population ratio.  Further, Cardiac presented evidence 

that Pierce County and Federal Way have an excess of cardiologists for the population's need.2

       In August 2005, patients and other medical providers began to complain to Cardiac about 

Emerick's conduct (CP at 522 (stricken)).3    Because of Emerick's conduct, some physicians 

stopped referring patients to Cardiac (CP at 137 (stricken)).   Cardiac's Professional Conduct 

Committee met with Emerick to address the complaints (CP at 137 (stricken)).     The Committee 

1 Interventional cardiology provides patients with a nonsurgical alternative to coronary bypass 
surgery.  Often, patients participating in interventional cardiology, rather than surgical options, 
will need longer term care and periodic adjustments to treatment.   

2 The studies cited show (1) for every 100,000 persons, there is a need of 2.6 to 4.22 
cardiologists; and (2) the Pierce County and Federal Way area has approximately 4.4 cardiologists 
per 100,000 persons.

3 Emerick moved to strike Cardiac's declarations setting forth its history with him.  The trial court 
struck as hearsay large portions of Cardiac's declarations explaining why it terminated Emerick.  
Cardiac does not assign error to this evidentiary ruling, but it indirectly challenges the ruling 
because it claims the court should have considered the parties' history.  Most of the assertions in 
these declarations do  not appear to be hearsay  ("a statement, other than one made by the 
declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the 
matter asserted.").  ER 801(c). Rather, the statements simply document the complaints Cardiac 
received about Emerick and Cardiac's responses to the complaints.  Accordingly, we report the 
history for the same purpose, noting the parts the trial court struck.  The truthfulness of the 
complaints is not an issue in our resolution of the case.    

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No. 41597-6-II

met again after more complaints were received, yet Emerick's behavior did not change (CP at 137-

40 (stricken)).  In February 2009, the Conduct Committee recommended that the Board discipline 

Emerick (CP at 147 (stricken)).  On July 1, 2009, Cardiac's Board of Directors terminated

Emerick (CP at 147 (stricken)).  

       Emerick remained a shareholder until September 30, 2009.  

                                           Procedure

       Emerick sued Cardiac seeking a declaration that the covenant was unenforceable.  

Emerick moved for summary judgment, arguing that the covenant was void as against public 

policy.4 In March 2010, the trial court granted Emerick's motion, ruling that the covenant was 

unenforceable because it violated public policy.  Although the trial court's ruling appeared to void 

the covenant in its entirety, the court also ordered Emerick not to solicit Cardiac patients.  And 

the court ordered the parties to remedy the effects of a letter Cardiac sent to patients regarding 

Emerick leaving the practice.  Then, on December 3, 2010, the trial court entered findings of fact 

and conclusions of law, concluding in part that the covenant's  temporal scope was "overly 

broad."  CP at 1389.  The court permanently enjoined Cardiac from enforcing the covenant, 

which "bar[s] Dr. Emerick from serving patients whom Dr. Emerick does not solicit, and has not 

solicited." CP at 1390.  The trial court awarded Emerick fees and costs totaling approximately 

$60,000.    

4 Cardiac also moved for summary judgment. 

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No. 41597-6-II

                                          ANALYSIS

                                     I. Standard of Review

       We review summary judgment de novo.  Trimble v. Wash. State Univ., 140 Wn.2d 88, 92-

93, 993 P.2d 259 (2000).  Whether a covenant not compete is reasonable is a question of law.  

See Alexander & Alexander, Inc. v. Wohlman, 19 Wn. App. 670, 684, 578 P.2d 530 (1978).

                                 II. Noncompetition Provision

       Courts will enforce a covenant not to compete if it is reasonable and lawful.  Wood v. 

May, 73 Wn.2d 307, 312, 438 P.2d 587 (1968).  We test reasonableness by asking (1) whether

the restraint is necessary to protect the employer's business or goodwill, (2) whether it imposes 

on the employee any greater restraint than is reasonably necessary to secure the employer's 

business or goodwill, and (3) whether enforcing the covenant would injure the public through loss 

of the employee's service and skill to the extent that the court should not enforce the covenant, 

i.e., whether it violates public policy.  Perry v. Moran, 109 Wn.2d 691, 698, 748 P.2d 224 

(1987), judgment modified on reconsideration, 111 Wn.2d 885 (1989).  

       If the trial court determines that certain terms of the covenant are unreasonable, the entire 

covenant does not fail.  Wood, 73 Wn.2d at 312.  The court should still seek to enforce the 

covenant to the extent reasonably possible to accomplish the contract's purpose.  Wood, 73 

Wn.2d at 312-13.    Specifically, the court considers "whether partial enforcement is possible 

without injury to the public and without injustice to the parties."   Wood, 73 Wn.2d at 313 

(distinguishing Washington law from the so called "blue-pencil test," which requires the changes 

to the contract to still be grammatically viable).  

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No. 41597-6-II

A.     Necessary for Employer

       A restrictive covenant protects an employer's business as warranted by the nature of 

employment.  Wood, 73 Wn.2d at 310 (citing 9 A.L.R. 1467-68).  An employee who joins an 

established business gains access to his  employer's customers and "'acquire[s] valuable 

information as to the nature and character of the business. . . . '"  Wood, 73 Wn.2d at 310 

(quoting 9 A.L.R. 1467-68).  This exposure to the employer's clients and business model allows 

the employee to compete with his employer after he leaves the employment.  Wood, 73 Wn.2d at 

310 (citing A.L.R. 1467-68).  To protect the employer's business, equity allows the employer to 

require the employee to sign a noncompetition agreement.  Wood, 73 Wn.2d at 310.

       Specifically, an employer has a "legitimate interest in protecting its existing client base"

and in prohibiting the employee from taking its clients.  Perry, 109 Wn.2d at 700.  In Perry, our 

Supreme Court considered an accounting firm's restrictive covenant with a newly hired

accountant.  Perry, 109 Wn.2d at 692. Moran, the new accountant, had worked as an accountant 

for a significant period of time before joining the firm.  Perry, 109 Wn.2d at 692.  The court 

recognized the firm's legitimate interest in protecting its client base after Moran left.  Perry, 109 

Wn.2d at 700; see also Knight, Vale & Gregory v. McDaniel, 37 Wn. App. 366, 369-70, 680 

P.2d 448 (1984) (recognizing a firm's interest in maintaining a client base built over many years).  

Courts also consider an employer's investment in training a newly minted professional.  See 

Ashley v. Lance, 75 Wn.2d 471, 475-77, 451 P.2d 916 (1969) ("'A young professional man may 

be willing to trade his future right to compete in a given community for an immediate and 

lucrative share in an established practice.'") (quoting McCallum v. Asbury, 393 P.2d 774, 777 

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No. 41597-6-II

(1964)), affirmed on other grounds in Ashley v. Lance, 80 Wn.2d 274, 493 P.2d 1242 (1972); 

Wood, 73 Wn.2d at 310-11 (discussing the substantial investment the master horseshoer made in 

training the apprentice).  

       When the trial court made its oral ruling, it did not discuss Cardiac's protected interest in 

its client base or its investment in Emerick.    In its subsequent written conclusions of law, 

however, the trial court found that Cardiac was entitled to "minimal" protection  under the 

covenant because Cardiac did not teach Emerick his skills and knowledge.  CP at 1388.  Similar 

to Perry, where Moran was already trained as an accountant, Emerick was a trained cardiologist 

before he joined Cardiac.  But the trial court's focus on Emerick's medical training in analyzing 

Cardiac's protected interest was too narrow.  Cardiac provided Emerick with an immediate client 

base and established referral sources when he moved to the area.  Moreover, Emerick had access 

to Cardiac's business model and goodwill.  These are all protectable business interests that the 

trial court should have considered in assessing the covenant's enforceability.

B.     Scope of Restraint

       The second reasonableness factor focuses on the extent to which the covenant adversely 

affects the employee's ability to earn a living.  See McDaniel, 37 Wn. App. at 370 (a court 

carefully considers a restrictive covenant because of a concern about freedom of employment).  

Generally, a court determines the reasonableness of a covenant by analyzing its geographic and 

temporal restrictions.  See Wood, 73 Wn.2d 311-12.  

       Having determined that Cardiac had only minimal interests to protect, the trial court 

concluded without explanation that the covenant's temporal scope was too broad and that the six 

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No. 41597-6-II

months Emerick had not practiced was "ample time" to protect Cardiac's financial interests and 

allow it to hire a replacement.  CP at 1389.  The trial court's discussion of the geographic 

restriction was equally brief, concluding that "[the covenant] would bar Dr. Emerick from 

practicing in countless cities throughout Pierce County and in Federal Way, where Dr. Emerick 

never worked as a [Cardiac] doctor; and it would bar Dr. Emerick from practicing cardiac 

medicine." CP at 1388-89.  

       The trial court's analysis of the scope of the covenant is flawed for several reasons.  As we 

stated, the court erred in determining that Cardiac had only minimal interests to protect. And this 

error allowed the court to dispose of the scope analysis without balancing Cardiac's actual 

protectable business interest against the time and geographic restrictions on Emerick's ability to 

earn a living.  Moreover, the court made no attempt to save as much of the covenant as could 

reasonably and fairly be enforced.  Wood, 73 Wn.2d at 314 (explaining that a covenant should be 

enforced to the extent it is reasonable).  

C.     Public Policy

       Finally, public policy requires a court to consider possible harm to the public from 

enforcing the covenant.  McDaniel, 37 Wn. App. at 369.  Such harm may include restraint of 

trade, limits on employment opportunities, and denial of public access to necessary services.  

Organon, Inc. v. Hepler, 23 Wn. App. 432, 436 n.1, 595 P.2d 1314 (1979); McDaniel, 37 Wn. 

App. at 370.  But the court must still balance these concerns against the employer's right to 

protect his business.  Wood, 73 Wn.2d at 310; see generally Perry, 109 Wn.2d at 700 ("A bargain 

by an employee not to compete with the employer . . . is valid."); Organon, Inc., 23 Wn. App. at 

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No. 41597-6-II

436 n.1 ("[A]n employer should certainly have the right . . . to condition employment on the 

employee's promise to refrain from certain activities."). 

       In its oral ruling, the trial court explained its public policy analysis:  "I don't think it's fair . 

. . or just to prevent [Emerick] from practicing medicine and the skills that have took [sic] him so 

long to acquire . . . I'm not going to enforce the non-compete agreement." RP (Mar. 5, 2010) at 

23.  The court's conclusions of law are similarly broad:  "[a] non-competition agreement that 

professes to bar a specialized physician from providing care to unsolicited patients has public 

policy implications" and, in enforcing a covenant, "the Court has considered the fairness to the 

public." CP at 1389.  But the court failed to apply these concepts specifically to the covenant at 

issue by addressing, for example, the risk that patients in the geographic area would be denied 

access to physicians practicing in Emerick's specialty.5 Nor did the court attempt to balance these 

concerns against Cardiac's protectable business interest.  Perry, 109 Wn.2d at 698.   

       Emerick argues, in effect, that such balancing is unnecessary, citing cases from other 

jurisdictions that have either declined to enforce or have strictly construed restrictive covenants 

between physicians because of the significant and personal relationship that exists in a doctor-

patient setting.  Ohio Urology, Inc. v. Poll, 594 N.E.2d 1027 (Ohio  1991);  Valley Med. 

Specialists v. Farber, 982 P.2d 1277 (Ariz. 1999); Intermountain Eye & Laser Ctrs., v. Miller, 

127 P.3d 121 (Idaho 2005).  Some states have legislatively precluded restrictive covenants in a 

medical setting.  See Colo. Rev. Stat. § 8-2-113(3); Del. Code Ann. tit. 6, § 2707; Mass. Gen. 

Laws ch. 112, § 12X.  Emerick also cites an American Medical Association opinion discouraging

5 As stated, Cardiac submitted evidence that the geographic area it served has an excess of 
cardiologists.  

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No. 41597-6-II

restrictive covenants in the medical profession because they interfere with continuity of care.  

American Medical Association Code of Medical Ethics, Opinion 9.02, Restrictive Covenants and 

the Practice of Medicine, June 1998.

       But Washington courts have not yet held that restrictive covenants between physicians are 

unenforceable.  In Ashley, our Supreme Court considered a covenant among physicians where 

four of the five partners in a medical group decided to dissolve the partnership and open a 

competing clinic 300 feet from the original clinic.  Ashley, 75 Wn.2d at 473.  The court explained 

that restrictive covenants are common among professionals because they allow a new professional 

to step into an already established practice while protecting the employer from future competition.  

Ashley, 75 Wn.2d at 476 (citing McCallum, 393 P.2d at 777 (Or. 1964)).  Thus, to the extent the 

trial court relied on authority from other jurisdictions, it erred in invalidating the covenant on 

public policy grounds. 

       In conclusion, the trial court erred in evaluating Cardiac's protectable business interest.  In 

part, due to this initial error, the court failed to properly analyze the scope and public policy 

factors included in the test for enforceability, and the court failed to address whether the covenant 

could be saved to some extent.  

       Finally, the trial court's oral and written rulings contain fundamental inconsistencies.  In its 

March oral ruling, the court invalidated the covenant in its entirety on public policy grounds, yet it 

ordered Emerick not to solicit Cardiac patients.  In December, the court's written conclusions 

prohibited Cardiac from preventing Emerick from serving patients he had not solicited, thereby 

implicitly allowing Cardiac to prevent Emerick from soliciting patients in its area.  The court then 

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No. 41597-6-II

concluded that the temporal restriction in the covenant had expired.  But if the covenant was 

invalid on public policy grounds or had expired, there was no reason to restrict Emerick's actions 

or grant Cardiac relief.  The trial court's rulings cannot be reconciled.

       We reverse the order granting summary judgment, vacate the attorney fees award to 

Emerick, and remand for further proceedings.  We also award Cardiac its statutory attorney fees 

on appeal. 

       A majority of the panel having determined that this opinion will not be printed in the 

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040, it 

is so ordered.

                                                 Armstrong, P.J.
We concur:

Hunt, J.

Johanson, J.

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