Iredell Digestive Disease Clinic, P.A. v. Petrozza

Iredell Digestive Disease Clinic, P.A. (Iredell) (plaintiff) was a professional association providing gastroenterology services. Iredell entered an employment agreement with Joseph Petrozza (defendant), an aspiring gastroenterology specialist. The agreement contained a restrictive covenant. One of its clauses provided that, in the event of Petrozza’s termination, if Petrozza were to establish his own gastroenterology practice within a certain radius, he would pay Iredell $50,000 as liquidated damages for breach of the covenant, plus 15 percent of his gross income for the first three years of his practice. Iredell and Petrozza found themselves at odds before the end of Petrozza’s employment term. Petrozza resigned and attempted to establish a new gastroenterology practice in the same town. This left Iredell with only one specialist, David Kogut. Iredell brought suit against Petrozza for breach of contract, including the restrictive covenant, and moved for a preliminary injunction. Petrozza argued that a single gastroenterology specialist was not enough to serve the needs of the town’s population. Iredell countered with evidence of Kogut’s ability to provide prompt and efficient care, of Kogut’s intention to hire a new associate to replace Petrozza, and of the presence in the area of other doctors who had the ability to perform gastroenterology procedures in emergency situations. The court found that one gastroenterology doctor was not enough to cover the town’s health needs and denied Iredell’s motion for a preliminary injunction. Iredell appealed to the North Carolina Court of Appeals.