AESTHETIC FACIAL & OCULAR PLASTIC SURGERY CENTER, P.A., Plaintiff,
RENZO A. ZALDIVAR and OCULOFACIAL PLASTIC SURGERY CONSULTANTS, P.A., SURGICAL, LLC, Defendants.
in the Court of Appeals 16 October 2018.
by plaintiff from order entered 16 December 2015 by Judge G.
Bryan Collins, Jr. in Superior Court, Wake County. Wake
County, No. 14 CVS 012804.
Law Offices of Michele A. Ledo, PLLC, by Michele A. Ledo; and
Law Office of Samuel A. Forehand, P.A., by Samuel A.
Forehand, for plaintiff-appellant.
Zaytoun Law Firm, PLLC, by Matthew D. Ballew, John R. Taylor,
and Robert E. Zaytoun, for defendants-appellees.
case arises from plaintiff's claim to enforce restrictive
covenants in an employment agreement involving two highly
specialized physicians. After two years, Dr. Renzo Zaldivar
left Aesthetic Facial and Ocular Plastic Surgery Center,
P.A., an ocular and facial plastic surgery practice started
by Dr. Frank Christenson, and started his own practice. Dr.
Zaldivar's employment agreement with Dr.
Christensen's practice included a covenant not to compete
in certain geographical areas in North Carolina, and a
covenant not to solicit former patients or referrals from
individuals or businesses with a referring relationship to
plaintiff. After carefully reviewing the covenants, we find
that they are unenforceable because they violate public
policy and affirm the trial court's grant of summary
judgment for defendants.
Frank Christensen is a board-certified physician practicing
ophthalmology, with specialized "surgical training in
ocular and plastic surgery." He has been in practice for
about 30 years, and, because of his highly specialized
practice, he sees patients "based upon referrals from
optometrists and ophthalmologists throughout the eastern half
of North Carolina." For most of his years in practice,
Dr. Christensen was the only physician working for his
practice, Aesthetic Facial & Ocular Plastic Surgery
Center, P.A. ("plaintiff"). Plaintiff has an office
in Raleigh, but Dr. Christensen saw and treated patients in
office spaces rented from other physicians or in hospitals in
Central and Eastern North Carolina.
2008, Dr. Christensen "actively recruited an additional
surgeon to supplement the practice specifically seeking a
surgeon trained in both ophthalmic and plastic surgery."
"After an extensive recruiting process," he offered
to employ defendant, Dr. Renzo Zaldivar. Dr. Zaldivar
completed his ophthalmology training and a fellowship with
the Mayo Clinic and University of Minnesota, and Dr.
Christensen offered Dr. Zaldivar employment with plaintiff in
a letter dated 26 November 2008 ("the Agreement").
This Employment Agreement contained provisions covering
salary, benefits, and Dr. Zaldivar's obligations to
plaintiff. The Agreement also contained non-compete and
non-solicitation covenants. Dr. Zaldivar accepted Dr.
Christensen's offer and was employed by plaintiff
starting in July of 2009. The Agreement stated Dr.
Zaldivar's employment was "at will" but
anticipated "continuing year to year thereafter until
terminated as provided herein." In June of 2011, Dr.
Zaldivar gave notice of his resignation to Dr. Christensen
and formed his own practice, defendant Oculofacial Plastic
Surgery Consultants, P.A., Surgical, LLC. Dr. Zaldivar
immediately began practicing in the same geographical region
September 2014, plaintiff filed a complaint against Dr.
Zaldivar and his practice ("defendants") alleging
claims of breach of the covenants in the employment
agreement, tortious interference with contractual relations,
civil conspiracy, and unfair and deceptive trade practices.
Defendants answered, denying the material allegations of the
complaint and alleging that the non-compete covenant and
non-solicitation covenants of the Agreement were
unenforceable for various reasons. Defendants counterclaimed
for breach of contract, fraud, negligent misrepresentation,
unjust enrichment, and unfair and deceptive trade practices.
After discovery and depositions, defendants filed a motion
for summary judgment.
hearing on the motion, the trial court entered an order
granting defendants' motion. On 12 December 2017,
defendants voluntarily dismissed all counterclaims, and
plaintiff timely appealed.
Standard of Review
Our standard of review of an appeal from summary judgment is
de novo; such judgment is appropriate only when the record
shows that there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of
law. When considering a motion for summary judgment, the
trial judge must view the presented evidence in a light most
favorable to the nonmoving party. If the movant demonstrates
the absence of a genuine issue of material fact, the burden
shifts to the nonmovant to present specific facts which
establish the presence of a genuine factual dispute for
In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d
572, 576 (2008) (citation and quotation marks omitted).
argues that the trial court erred in granting summary
judgment because there are genuine issues of material fact
related to the enforceability of the non-compete covenant and
non-solicitation covenant in the Agreement and that the
covenants do not not violate public policy. Defendants
contend that enforcement of the covenants would create a
"substantial question of potential harm to the public
health" because Dr. Zaldivar is one of very few
specialists in North Carolina who practice his particular
subspecialty of ocluofacial plastic surgery.
North Carolina, restrictive covenants between an employer and
employee are valid and enforceable if they are (1) in
writing; (2) made part of a contract of employment; (3) based
on valuable consideration; (4) reasonable both as to time and
territory; and (5) not against public policy."
United Labs., Inc. v. Kuykendall, 322 N.C. 643,
649-50, 370 S.E.2d 375, 380 (1988). There is no dispute that
the parties entered a written employment contract based on
valuable consideration; their dispute is based upon the
territory and the public policy considerations of the
restrictions. Defendants contend that the territorial
restrictions of the covenants are unreasonable, and for
purposes of addressing the public policy issue, we express no
opinion on the reasonableness of the territory. For purposes
of this argument, we will view the Agreement in the light
most favorable to the plaintiff and assume the restrictions
cover the full territory alleged by plaintiff. Dr.
Christensen had arrangements with other physicians or
hospitals to provide services in Chapel Hill, Durham,
Fayetteville, Greensboro, Greenville, Pinehurst, Raleigh,
Rocky Mount, Supply, Wake Forest, Wilmington, and Wilson. The
Agreement provided that the covenants covered a 15-mile
radius around each of plaintiff's practice locations.
Covenant not to Compete
Carolina courts have considered several cases involving
non-compete agreements involving physicians, and depending
upon the specialization of the physician and the territory of
the restriction, several cases have recognized the potential
for harm to the public health from denial of needed medical
care to the public:
If ordering the covenantor to honor his contractual
obligation would create a substantial question of potential
harm to the public health, then the public interests outweigh
the contract interests of the covenantee, and the court will
refuse to enforce the covenant. But if ordering the
covenantor to honor his agreement will merely inconvenience
the public without causing substantial harm, then the
covenantee is entitled to have his contract enforced.
Iredell Digestive Disease Clinic v. Petrozza, 92
N.C.App. 21, 27-28, 373 S.E.2d 449, 453 (1988) (citations
omitted), aff'd, 324 N.C. 327, 377 S.E.2d 750
This Court considers the following factors in determining the
risk of substantial harm to the public: the shortage of
specialists in the field in the restricted area, the impact
of establishing a monopoly in the area, including the impact
on fees in the future and the availability of a doctor at all
times for emergencies, and the public interest in having a
choice in the selection of a physician.
Calhoun v. WHA Med. Clinic, PLLC, 178 N.C.App. 585,
599-600, 632 S.E.2d 563, 572 (2006) (quotation marks and