Graham v. Cirocco

William Cirocco, M.D. (defendant), a colorectal surgeon, entered into an employment contract with Bruce D. Graham, M.D., P.A. (plaintiff), who was also a colorectal surgeon. The employment contract contained a non-competition covenant stating that, for a period of two years after leaving Graham’s employment, Cirocco (1) would not, within 150 miles of any of Graham’s offices, solicit business from Graham’s patients or referral sources with whom Cirocco came into contact as Graham’s employee; and (2) would not open a practice within 25 miles of the hospitals listed in the contract or provide services at those hospitals. Cirocco resigned from Graham’s employment in 2000 and opened an office for the practice of colorectal surgery next door to Graham. Graham sued to enjoin Cirocco from having this office and soliciting patients. Cirocco argued that the covenant was unenforceable as against public policy because the covenant (1) suppressed ordinary competition by protecting Graham’s interest in patient and referrals and (2) would deprive northeastern Kansas of much-needed colorectal surgeons. At trial, evidence was presented that Graham’s practice remained completely full, such that there was a three to four week wait time for an appointment; Graham had to remain on call 24 hours a day and seven days a week; and Graham was considering employing another surgeon. Evidence was also presented that the enforcement of the covenant would leave northeastern Kansas with one colorectal surgeon for 700,000 potential patients, which would underserve the region, and that colorectal surgeries performed by general surgeons resulted in higher death rates than those performed by colorectal surgeons. Nevertheless, the trial court concluded that the covenant was reasonable and enforceable, and enjoined Cirocco’s practice for two years. Cirocco appealed.