Takeaway: A noncompete agreement that a veterinarian signed in conjunction with the sale of her veterinary practice to another practice was enforceable, even though, after the sale, the veterinarian continued to work for several years at the purchasing business.
A noncompete agreement that a veterinarian in El Cajon, Calif., signed in conjunction with the sale of her veterinary practice to another practice was enforceable, a California appeals court recently ruled.
Although contractual provisions that prevent a person from engaging in a profession, trade or business are generally void in California, there is an exception to this general rule when a noncompete agreement is connected to the sale of a business, the court said. The exception applied in this case even though the veterinarian continued to work at the business for several years after the sale, the court concluded.
When the veterinarian sold her practice, she executed a noncompete agreement as required by the purchase agreement. She agreed that she would not work with an animal hospital within a 20-mile radius of her former practice. She also agreed not to solicit employees or customers to leave the practice. The agreement specified that it would last for five years following the last date on which the veterinarian worked for the practice.
After the larger practice bought her individual practice, the veterinarian continued to work at the larger practice for several years until she announced that she was retiring....
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