A $2.3M buyout and an arbitrator's blessing still couldn't save this noncompete
A Connecticut appeals court has upheld a ruling voiding an arbitration award that declared a two-year physician noncompete valid, finding it broke state limits.
The decision, released August 4, 2026, is a clear signal for any employer that leans on restrictive covenants to lock in licensed professionals: a private arbitrator cannot rewrite the boundaries the legislature has already drawn.
Here is how it unfolded. The radiologist was a shareholder and employee at a Hartford radiology practice. In 2021, the practice began talks to sell to Premier Imaging Holdings. In March 2022, he and his colleagues signed a stock purchase agreement, and he walked away with roughly $2.3 million in cash plus additional equity. He also became a part owner of a new company, RAH Equity Holdings.
That deal came with strings. As part of the sale, the physicians signed a Limited Liability
Company (LLC) agreement whose noncompete barred them from competing with RAH Equity for at least two years across a long list of hospitals and imaging centers, plus a 25-mile radius around each.
In June 2023, the radiologist gave notice that he was leaving to join a practice in Middletown. The companies pushed the dispute into arbitration. His case was one of four the companies brought against radiologists they said had breached the noncompete. In August 2024, the arbitrator ruled the noncompete valid and binding and said the new job...
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