If a TNphysician severence agreement binds him to Colorado law is he immune from Non-Compete Clause?

I am currently in law school and this question boggles me. My father, a TN peditrician was laid off without cause and wasoffered a severence agreement that binds him to laws of Colorado. Colorado's statute prohibits non-compete clauses for physicians. The only arguement could be that he is not a pediatrician within Colorado, but the statute is not very clear how to handle the situation when it is in fact the company demanding he abide by Colorado law. He is a liscned pediatrician in Tennessee and 60 years old. The none compete is for two years and 20 miles, which drastically hurts him. By signing this agreement, will he be protected by the Colorado Statute or is it better for him to demand Tennessee arbitrate it. (NCC are around 6 mo-anything more is deemed as unconsciability.

1 answer  |  asked Feb 11, 2010 10:46 PM [EST]  |  applies to Colorado

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Answers (1)

Neil Klingshirn
I hope your law school exam answers are clearer than this question.

I think your question is this - should your dad, a TN physician, agree to a non-compete that states it shall be governed by CO law? Your dad should not sign a non-compete if he can avoid it. If he is willing to restrict his future employment, then he should negotiate the most favorable terms. Those would include a choice of the law of the state that permits the least enforcement of a physician non-compete. Hence, if physician non-competes are not enforceable in CO but they are enforceable in TN, Dad is better off agreeing to CO's laws.

The parties are not completely free to select the law of another jurisdiction to govern their agreement. They must have some contact with the other jurisdiction, and the application of the other jurisdiction's law cannot undermine an important policy of the forum state. Here is an article that addresses the choice of law issue in greater detail:

http://www.myemploymentlawyer.com/wiki/Choice-of-Law-in-Non-compete-Cases.htm

posted by Neil Klingshirn  |  Feb 12, 2010 12:58 PM [EST]

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