DOJ urges state court to use antitrust principles to invalidate noncompetes

Noncompete agreements between employers and their employees traditionally are governed by state law. But that didn’t stop the Antitrust Division of the U.S. Department of Justice (DOJ) from recently filing a statement of interest encouraging a Nevada state court to consider federal antitrust principles to invalidate noncompete agreements between a large medical group and its physician-employees. Taken together with other recent actions by the president and federal enforcement agencies, the DOJ’s decision to file the statement signals a more aggressive approach to noncompete enforcement at the federal level.

Facts

The lawsuit was filed by a group of anesthesiologists and employees of Pickert Medical Group, which employs approximately two-thirds of all permanently employed anesthesiologists in Northern Nevada. Under the terms of a professional services agreement (PSA), Pickert is the sole supplier of anesthesiologists for Renown Regional Medical Center, which has the only trauma center in the region and is the sole provider of complex surgical care.

As part of their Pickert employment agreements, the anesthesiologists are subject to a two-year, postemployment noncompete restraint that prohibits them from providing anesthesiology services within 25 miles of Renown or at any other facility where they worked for the two years before termination of their employment.