Dr. Safadi & Assocs. v. McColley

1

2023-Ohio-1234

Dr. Safadi & Associates, Inc. Appellant v. Dana M. McColley, C.N.P. Appellee

No. L-22-1182

Court of Appeals of Ohio, Sixth District, Lucas

April 14, 2023

Trial Court No. CI0202202687

Roman Arce and Franceska N. Edinger, for appellant.

Jared J. Lefevre and Charles E. Hatch, for appellee.

DECISION AND JUDGMENT

ZMUDA J.

{¶ 1} This matter is before the court upon the appeal of appellant, Dr. Safadi & Associates Inc.,^[1] challenging the judgment of the Lucas County Court of Common Pleas, denying Dr. Safadi's request for a permanent injunction and granting judgment in favor of appellee, Dana M. McColley, C.N.P. on each of appellant's claims. For the reasons that follow, we affirm.

I. Background and Procedural History

{¶ 2} In 2016, McColley accepted a position with Dr. Safadi to provide nurse practitioner services to Dr. Safadi's allergy and immunology practice. Dr. Safadi is the sole physician in the practice and he employs physician assistants and nurse practitioners to provide almost all of the direct patient care. McColley had prior experience, working in an emergency room as a nurse and for a family practice as a certified nurse practitioner (C.N.P.). As part of the employment agreement with Dr. Safadi, the parties negotiated a non-solicitation/non-competition provision, as follows:

8.1 The Employee acknowledges and agrees that prior to her employment under this Agreement that she did not have any experience working with patients with allergy or immunology problems and as a result of this employment, will receive training that would enable her to compete with the Employer's practice if this Agreement is terminated. The Employee further acknowledges and agrees that as a result of this employment, she will obtain knowledge of trade secrets, patients, patients' needs, and medical information, et al., which, if used by her subsequent to her termination, could endanger Employer's ability to properly and profitably function. Finally, the Employee acknowledges and agrees that as a result of this employment, she will be afforded the opportunity to meet and ingratiate herself with the Employer's patients, which, in the event of the termination of this Agreement, would provide her with the opportunity to appropriate goodwill belonging to the Employer. Therefore, in the event of the termination of this Agreement by either party for any reason, the Employee agrees that she will not do any of the following as an employee, agent, partner, member, shareholder, consultant or in any other capacity, for a period of three (3) years from the date of termination within thirty (30) miles of any office operated by the Employer at the time of termination:

8.1.1 Directly or indirectly provide services involving the medical field of allergy or immunology to anyone or solicit, on behalf of anyone, patients with allergy or immunology problems; and

8.1.2 Use or divulge any information obtained while she was an Employee, including but not limited to, names of patients, patients' needs, patients' addresses or other contact information, any medical information whatsoever concerning any patient and/or any and all other knowledge in the nature of "trade secrets" of Employer.

{¶ 3} In early 2022, McColley sought out a new position, intending to leave Dr. Safadi's practice. McColley submitted her resume to The Toledo Clinic on May 2, 2022, after hearing of an opening in the practice of Dr. Christopher Perry, D.O. McColley confided in her friend and coworker, Meghan Simpson, regarding her job search. In a text exchange, prior to her meeting with Dr. Perry, McColley expressed concern regarding the non-compete provision of her employment agreement.

{¶ 4} Soon after applying, McColley interviewed with Dr. Perry. Dr. Perry is board certified in otorhinolaryngology, commonly referred to as ear, nose, and throat (ENT), and facial plastic surgery. After this meeting, McColley followed up with Terri Gingery, the office manager for human resources at The Toledo Clinic, providing notice of the non-compete provision in her employment agreement with Dr. Safadi. McColley emailed Gingery on May 9, 2022, and provided a copy of Dr. Safadi's non-compete provision. She indicated her attorney wished to "understand how the Toledo Clinic foresees addressing the non-compete provision, because I am directly liable for any breach of the non-compete clause." She requested The Toledo Clinic attorneys contact her attorney to discuss the issue.

{¶ 5} On May 12, 2022, McColley resigned her position with Dr. Safadi and gave the 90-day notice required under the Employment Agreement. However, after discussion, the parties mutually agreed that McColley's last day would be June 8, 2022.

{¶ 6} On May 17, 2022, The Toledo Clinic extended a written offer of employment to McColley. On that same date, Terri Gingery emailed McColley, welcoming her to the practice and providing forms McColley needed to sign as part of the hiring process.

{¶ 7} Following this offer, McColley exchanged text messages with Meghan Simpson regarding the non-compete. On May 23, 2022, McColley told Simpson she needed to decide whether to risk "30-40 grand" in legal fees, should Dr. Safadi pursue legal action, or to re-apply for other jobs. McColley and Simpson discussed the situation, and McColley stated, "Well [Dr.] Perry said that I can't work there and do nothing allergy. [I]t just wouldn't work."

{¶ 8} That same day, McColley notified Dr. Safadi that she had accepted a position with The Toledo Clinic ENT, effective June 20, 2022, working for Dr. Perry.

{¶ 9} Once McColley had given notice to Dr. Safadi, she exchanged text messages with Dr. Perry regarding the non-compete provision. Dr. Perry indicated:

I haven't heard anything from [Dr.] Safadi yet. Just wanted to give you a heads up though. You should be receiving an employment contract soon. Also, you should receive another contract that spells out what would happen in the worst case scenario in the unlikely event that [Dr.] Safadi sues and wins your case. But the bottom line is that you will not be liable for any damages or attorney fees past this point.

The Toledo Clinic ultimately entered into a written agreement with McColley, providing for a legal defense "of any breach of contract claim brought against you by Dr. Safadi & Associates, Inc. ("Former Employer") with respect to the non-compete and nonsolicitation provisions" within Dr. Safadi's Employment Agreement.

{¶ 10} On June 14, 2022, Dr. Safadi filed a verified complaint in the Lucas County Court of Common Pleas, seeking injunctive relief and monetary damages, alleging a breach of the non-competition and non-solicitation agreement by McColley. Dr. Safadi also filed a motion for a temporary restraining order. On June 15, 2022, McColley filed a brief in opposition to a temporary restraining order. The trial court granted the motion for a temporary restraining order on June 16, 2022, temporarily preventing McColley from commencing her employment with The Toledo Clinic ENT.

{¶ 11} On June 30, 2022, McColley filed an answer to the verified complaint, asserting defenses that included a lack of breach of contract, in that the non-competition agreement did not "apply to services in the medical field of otolaryngology (ENT)." Alternatively, McColley asserted that the non-competition agreement "is unreasonable and unenforceable under Ohio law in its scope, length, and geographic restriction."

{¶ 12} On July 1, 2022, the parties agreed to consolidate hearing on the preliminary injunction with a trial on the merits, and the matter was tried to the court pursuant to Civ.R. 65(B)(2). In an order issued July 5, 2022, the trial court denied Dr. Safadi's request for an injunction, dissolved the temporary restraining order issued June 16, 2022, and found in favor of McColley on Dr. Safadi's claims, ordering Dr. Safadi's complaint dismissed. The trial court's order indicated a written opinion would follow.

{¶ 13} On August 4, 2022, the trial court entered an opinion and judgment entry, providing findings of fact and conclusions of law. Among other facts, the trial court found that Dr. Safadi's practice and Dr. Perry's ENT practice involve separate fields, and that Dr. Safadi and Dr. Perry held different board certifications, Dr. Safadi in pediatrics and allergy and immunology and Dr. Perry in the ENT specialty and in facial plastic surgery. The trial court also determined that there was very little overlap between Dr. Safadi's and Dr. Perry's practice that involved the treatment of allergy patients, and Dr. Perry used different methods and treatments. As a result, Dr. Perry would need to train McColley for six months before she could provide any services to The Toledo Clinic ENT patients.

{¶ 14} After addressing the law governing non-competition agreements, both generally and for medical services, the trial court found the non-competition agreement was unreasonable as to the geographic restriction, without consideration of reasonable terms that would preserve the parties' bargain. The trial court then found that Dr. Safadi failed to demonstrate that McColley breached her Employment Agreement by accepting employment with Dr. Perry and The Toledo Clinic ENT, with no analysis regarding this finding. The trial court entered judgment in favor of McColley as to Dr. Safadi's verified complaint.

{¶ 15} Dr. Safadi filed a timely appeal from the judgment.

II. Assignments of Error

{¶ 16} Dr. Safadi argues three assignments of error on appeal:

(1) The trial court erred by depriving [Dr. Safadi] of the benefit of the pre-hire bargain reached with [McColley] because during pre-hire negotiations for an Employment Agreement, [McColley] agreed to a three-year post-employment

...