Valley Medical Specialists v. Farber

982 P.2d 1277 · Arizona Supreme Court · 1999

Facts

Dr. Steven Farber, a pulmonologist, left Valley Medical Specialists (VMS) and began practicing within an area restricted by a non-compete clause in his employment agreement. VMS sued to enforce the covenant, which prohibited any medical practice for three years within a five-mile radius of any VMS office, covering 235 square miles. The trial court found the covenant unreasonable and against public policy, but the court of appeals reversed.

Issue

Is a restrictive covenant in a physician's employment agreement, prohibiting any medical practice for three years within a 235-square-mile area, enforceable given public policy concerns regarding patient access to care?

Holding

No, the restrictive covenant is not enforceable. The public policy concerns regarding patient access to medical care outweigh Valley Medical Specialists' protectable interests in enforcing the agreement, and the covenant was unreasonably broad in scope and duration.

Rule

Restrictive covenants between physicians are strictly scrutinized for reasonableness, requiring the restraint to be no greater than necessary to protect the employer’s legitimate interest and not outweighed by hardship to the employee and likely injury to the public. Courts will not rewrite overly broad covenants to make them enforceable.

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Case brief last reviewed 2026-05-06. Prepared by CaseReader from the published opinion.