Labor and Employment attorney Salvatore G. Gangemi provided input on a recent article about a lawsuit involving a restrictive covenant against a physician that was thrown out because the physician was released without cause and the restrictive covenant created undue hardship for the physician.

DecisionHealth’s Part B News wrote an article about a case involving New Jersey pediatric neurosurgeon Timothy Vogel and New Jersey Brain & Spine (NJBS). Vogel moved from Cincinnati to New Jersey in 2016 because NJBS wanted to establish a pediatric neurosurgery practice at Hackensack University Medical Center. He thrived, drew accolades from his peers and was named chief of pediatric neurosurgery at the hospital. NJBS made him a limited partner in the business in 2022, when he earned more than $1.8 million. As part of that agreement, he signed a restrictive covenant barring him from working at Northern New Jersey hospitals for a two-year period after separation from NJBS.

Vogel was fired in 2023. While his contract said he could be fired for incompetence or any of another 11 for-cause reasons, NJBS did not present a reason for letting him go. The court, however, cited evidence showing he was let go because his salary exceeded the amount of money he was bringing into the practice.

Then, the employer tried to hold him to a restrictive covenant that hindered his ability to maintain his lifestyle.

Sal, a member of our Labor and Employment Practice Group, said NJBS might have had a better  chance at enforcing its restrictive covenant if it had terminated Vogel for cause. In the case, NJBS fired him because his practice was not necessarily as profitable as they would have liked through no fault of his own; it was the nature of a pediatric neurosurgery practice. 

He added that an employer needs a good business reason to impose and enforce a restrictive covenant beyond just preferring less competition.

“If you can’t clearly articulate the interest you are trying to protect [with your noncompete], then your noncompete is overbroad…again, noncompetes are not there to prevent competition, noncompetes exist to prevent unfair competition. In the United States, fair competition is far game,” he said.

The entire article has more information on the case. (Subscription required.)