Health Law Case Brief: Metroplex Pathology Associates v. Horn

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By Patrick Kilgore

In Metroplex Pathology Associates v. Horn,[1] the Massachusetts District Court interpreted whether two physicians violated certain confidentiality and non-competition clauses within their respective employment contracts.  Ultimately the Court denied plaintiff Metroplex Pathology Associates’ (“Metroplex”) motion for a preliminary injunction restricting defendant physicians Thomas Horn and Lisa Cohen—as well as their employer MGPO Dermatopathology Associates (MDA)—from engaging in activities allegedly prohibited by Horn and Cohen’s respective employment agreements . The court determined that Metroplex was unlikely to succeed on the merits because it could not show that the defendants had in fact violated any provisions of their employment agreements with Metroplex, and suggested that the non-competition and non-solicitation provisions of the employment agreements may even be unenforceable under Mass. Gen. Laws ch. 112 § 12X [2].

Metroplex alleged that that Cohen and Horn signed employment agreements as part of the 2007 sale of their practice to Caris Diagnostics, Inc.  Under the terms of his employment, Cohen agreed not to disclose any confidential information[3] to third parties—for five years following termination. The agreement also included a non-competition provision stating that Cohen could not “directly or indirectly take any action that results or may reasonably be expected to result in owning any interest in, leasing, operating, managing, extending credit to, or otherwise participating in the business (including without limitation, as a medical director, contractor, or consultant) of a Competitor in the Restricted Area” for two years following the agreement.[4] This provision, however, explicitly allowed Cohen to be employed on a salaried basis limited to the review and interpretation of dermatopathology slides.  Finally, Cohen agreed not to solicit employees of Carisfor two years after termination of the agreement.[5]

Similarly, Horn’s employment agreement prohibited him from disclosing the identities of Caris’ referring physicians to third parties, as well as attempting to solicit certain parties associated with Caris from terminating their relationships with the company for one year following the termination of the agreement.[6]

Cohen and Horn each left Caris to join MDA in 2011..[7] Horn, who joined MDA before Cohen, claimed that he was not aware that Cohen was planning on joining MDA until her hiring was announced. Both Cohen and Horn contended that their roles at MDA were limited to comply with the restrictions imposed by their previous employment agreements. Specifically, the defendants claimed that Cohen has played no role in the operation or management of MDA, and that all marketing and solicitation was handled by an employee who did not report to or interact with Horn or Cohen. [8]

The Plaintiffs, successors in interest to the physicians’ contracts, alleged that: (a) Horn and Cohen, along with MDA, operated a new dermatopathology practice in breach of the confidentiality, non-solicitation, non-competition, and non-disparagement provisions in their respective contracts; (b) Horn and MDA wrongfully hired several former employees, including Cohen; and (c)  MDA improperly used Horn’s and Cohen’s names, images, and biographical information on its marketing and promotional materials and is directly soliciting Metroplex’s clients using confidential information provided by Cohen and Horn.[9]

The district court denied Metroplex’s request for an injunction on the basis that the plaintiff could not show that Horn or Cohen had violated their respective employment agreements. The court noted Metroplex bore the burden of showing a substantial likelihood of success on the merits, observing that “if the moving party cannot demonstrate that he is likely to succeed on his quest, the remaining factors [considered for a preliminary injunction] become matters of idle curiosity.[10]”  The district court determined that Metroplex did not present evidence that either doctor disclosed or used confidential information obtained from Caris, solicited any of Caris’ employees, or solicited any of Caris’ clients.  Each physician joined MDA independently of the other, and without encouraging other parties to leave Metroplex.   The court further found that Cohen’s contract with Metroplex explicitly permitted her employment by MDA for the purposes of reviewing and interpreting dermatopathology slides.

On a broader policy note, the court ultimately questioned whether the non-competition and non-solicitation provisions of Cohen’s contract were valid, observing that “M.G.L. c. 112 § 12X renders void and unenforceable ‘any restriction of the right of [a physician] to practice medicine in any geographic area for any period of time after the termination’ of an employment relationship.[11]” In a footnote, the court rejected Metroplex’s assertion that § 12X should be read narrowly to cover only physicians who deal directly with patients and not doctors who—like Cohen and Horn—work in a lab.[12]

Patrick Kilgore is a 2012 graduate of Boston University School of Law and a member of the BBA. He is currently works for Boston University Technology Development and is joining the Chicago firm Rakoczy, Molino, Mazzochi, Siwik LLP in May.

[1]Metroplex Pathology Assoc. v. Horn,  2013 WL 22197 (Mass. Dist. Ct. 2013).

[2] Mass. Gen. Laws ch. 112 § 12X  states that “[a]ny contract . . . with a physician . . . which includes any restriction of the right of such physician to practice medicine in any geographic area for any period of time after [] termination . . . shall be void and unenforceable with respect to said restriction. . . .”

[3] “Confidential information” included the identity of Caris’ customers and personnel as well as company business and marketing plans. Metroplex at 1.

[4] Metroplex Pathology Assoc., 2013 WL 22197, *1­ (Mass. Dist. Ct. 2013).

[5] See id.

[6] See id. at *2.

[7] See id.

[8] See id. at *3.

[9] Id.

[10] New Comm Wireless Servs., Inc., v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir.2002).

[11] Metroplex, WL 22197, at *4.

[12] See id. at *4 n.7.