## Facts

- Two orthopedic surgeons in Fort Smith, Arkansas (Alberty and Wideman) entered an “association” agreement with another orthopedic surgeon (Duffner) in June 1984.
- The agreement provided for shared office space and certain overhead costs, but each physician maintained a separate practice with separate billing and no shared profits.
- The agreement included a covenant barring Duffner, after termination, from practicing medicine within a 30-mile radius of Alberty’s and Wideman’s offices for 12 months.
- During roughly nine months in the association, Duffner developed a substantial practice and had access to office facilities and patient records for routine patient care.
- In 1985 Duffner left and joined another orthopedic clinic in the same building, within the restricted area, and requested 28 patient charts for follow-up care.
- Alberty and Wideman sought to enforce the covenant, asserting a need to protect patient relationships and goodwill.

## Issues

1. Whether a physician noncompete ancillary to a cost-sharing association (not involving a sale of practice or goodwill) is enforceable absent proof of a legitimate protectable interest such as special training, trade secrets, confidential business information, or a proprietary patient list.
2. Whether enforcing the covenant would be an unreasonable restraint of trade contrary to Arkansas public policy, particularly given patient choice and access to medical services.

## Decision

- The court reversed the chancery court and vacated the injunction enforcing the covenant.
- The covenant was held void and unenforceable because the covenantees failed to prove a legitimate protectable interest.
- Although the 30-mile geographic limit and 12-month duration were not deemed facially unreasonable, the covenant failed the threshold requirement of a valid interest to protect.

## Legal Principles

- Covenants not to compete are disfavored and are enforceable only if reasonable and necessary to protect a legitimate interest, not merely to prevent ordinary competition.
- Enforceability requires: (1) a valid protectable interest; (2) a not-overbroad geographic restriction; and (3) a reasonable time limitation.
- In employment or professional association settings (as opposed to a sale of a business with goodwill), courts require proof of protectable interests such as special training, trade secrets, confidential business information, or customer lists, and an unfair competitive advantage derived from them.
- Public policy limits restraints that are greater than reasonably necessary to protect a legitimate interest or that harm the public interest, including patient access and freedom to choose a physician.

## Conclusion

The court invalidated the physician noncompete because the association was a cost-sharing arrangement without a sale of goodwill or evidence that Duffner exploited protectable confidential information; enforcing the restriction would improperly suppress ordinary competition and risk harm to the public interest in patient choice and access to care.


Duffner v. Alberty, 19 Ark. App. 137 (Ark. Ct. App. 1986)