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Anesthesia provider gets no relief in noncompete appeal

April 4, 2018

The Indiana Court of Appeals has upheld the denial of injunctive relief in a fraud case stemming from the alleged breach of a noncompete clause, finding evidentiary support for the trial court’s decision.

In August 2016, Kyle and Megan O’Bryan began working for Great Lakes Anesthesia, P.C. by providing anesthesia services at the Marion Hospital. Great Lakes had a contract with Marion Anesthesiologists, which, in turn, contracted with the Marion General Hospital, and was also attempting to secure a direct contract with the hospital.

When the O’Bryans accepted the positions, the couple signed noncompete clauses that prohibited them from working within a 25-mile radius of their assigned area for two years after termination of their employment. Before signing the agreements, the couple was told the desired contract between Great Lakes and Marion General was secure, even though it wasn’t finalized.

But in January 2017, Great Lakes’ new CEO, Seth Claxton, learned the hospital had plans to extend a direct contract to Associated Anesthesiologists of Fort Wayne, not Great Lakes. When the hospital followed through with those plans, Claxton notified Marion Anesthesiologists that Great Lakes would no longer be providing services to the hospital under its contract.

As a result, the O’Bryans resigned and began servicing the hospital as agents of AAFW. They also filed a complaint against Great Lakes for declaratory judgment that the noncompete agreements were unenforceable, among other claims. Great Lakes responded with a counterclaim and a motion for a preliminary injunction to prohibit the O’Bryans from working at the hospital. The Grant Circuit Court denied that motion, prompting this appeal, Great Lakes Anesthesia v. Kyle O’Brien and Megan O’Brien, 27A02-1708-CT-1956.

On appeal, Great Lakes argued the trial court misapplied the law in denying its preliminary injunction motion, but the Indiana Court of Appeals disagreed. Judge Mark Bailey wrote Wednesday that there was evidentiary support for the trial court’s conclusion that the O’Bryans did not gain a competitive advantage by interacting with health care providers at the hospital. Bailey pointed to evidence that the O’Bryans were hired simply to administer anesthesia to patients, not to “develop goodwill” between Great Lakes and the hospital by serving as liaisons.

Further, given Great Lakes’ decision to end its contract with Marion Anesthesiologists at the hospital, the argument that it might be offered a future hospital contract is “tenuous, at best,” Bailey said. He also pointed to a trial court conclusion that it has “painted an overly rosy picture” by assuring the O’Bryans that the contract with the hospital was solid.

Thus, the trial court properly found that there was not a likelihood that Great Lakes would succeed at trial, the court said. The panel also determined the trial court did not err in finding money damages would be adequate if the O’Bryans were found to have breached their contract, or that public interest would be disserved by granting the requested injunctive relief.

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