Cent. Kan. Med. Ctr. v. Hatesohl — Mar. 2016 (Summary)

CORPORATE PRACTICE OF MEDICINE

Cent. Kan. Med. Ctr. v. Hatesohl
Nos. 113,675, 113,834 (Kan. Ct. App. Mar. 18, 2016)

A family practitioner entered into an employment agreement with a medical center that was operating as an Ambulatory and Surgical Center.  The physician resigned his position and the medical center filed a suit for breach of the non-compete agreement that was part of the employment agreement.  Additionally, the former employer/medical center filed suit against the physician’s new employer for breach of the non-compete agreement.

The district court held in favor of the physician and his new employer on the grounds that the employment agreement between the physician and the medical center was unenforceable because the center was not licensed properly to allow a family practitioner to practice at the facility.  The appellate court reversed, finding that the district court misunderstood the corporate structure of the medical center and the licensing of the medical center and thus the court’s conclusion that the employment agreement was unenforceable was erroneous.