A doctor cannot be preliminarily enjoined from breaching certain restrictive covenants in an employment agreement between her and a former physicians group where the group has failed, among other things, to show that the doctor is exercising an “unfair advantage,” an appeals court has ruled.

Dr. Marcia Harris, who has sued her former employer—Patients Medical P.C., a holistic wellness center in Manhattan that employs “holistic physicians” of various specialties, according to its website—cannot be preliminarily stopped from performing obstetrician-gynecologist and ancillary services at another medical professional group she has joined, an Appellate Division, First Department panel has ruled.

“Patients Medical has not established that Harris's OB/GYN and ancillary services are unique or extraordinary such that they gave her an unfair advantage over its practice,” the panel, composed of Justices Ronaldo Acosta, Judith Gische, Barbara Kapnick, Ellen Gesmer and Anil Singh, explained in the decision.

The panel noted that, in cases between professionals, courts recognize an employer's legitimate interest against unfair competition but, to avoid broad competition restraints, they have limited such employer interests “'to the protection against misappropriation of the employer's trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary,''' quoting BDO Seidman v. Hirshberg.

In the lawsuit lodged in Manhattan Supreme Court by Harris against Patients Medical, the holistic wellness center and physicians group had asked Supreme Court Justice O. Peter Sherwood to impose a preliminary injunction enjoining Harris from breaching restrictive covenants in the employment agreement, but Sherwood denied the request, the panel said.

The justices further pointed out that a preliminary injunction is an “extraordinary provisional remedy which will only issue where the proponent demonstrates (1) a likelihood of success on the merits, (2) irreparable injury absent a preliminary injunction, and (3) a balance of equities tipping in its favor.”

Writing that Patients Medical “has not demonstrated a likelihood of success on the merits,” the justices also explained that under New York state law a restrictive covenant “restraint” is reasonable only if certain factors are in place, including that the restraint “is no greater than is required for the protection of the legitimate interest of the employer.”

Addressing the preliminary injunction motion before it, and affirming Sherwood's denial, the justices wrote that “Patients Medical has not established that Harris's OB/GYN and ancillary services are unique or extraordinary such that they gave her an unfair advantage over its practice.”

“It is undisputed that Harris brought her own OB/GYN practice to Patients Medical [when she worked there] and that Patients Medical did not offer OB/GYN care after Harris left the practice,” the justices explained.

“Accordingly, Patients Medical has not shown that the restrictive covenants were necessary to protect its legitimate interests,” they added.

In the Feb. 7 decision, the panel also noted, while addressing other factors required for a preliminary injunction, that “irreparable harm is not established as monetary damages is an adequate remedy,” and that “the equities tip in Harris' favor” in that “granting a preliminary injunction would disrupt the physician-patient relationship she has with her current patients.”

Henry Saurborn of Kaiser Saurborn & Mair, who is counsel to Harris, said by phone on Thursday that he and his client were pleased with the panel's decision. He added that he views certain restrictions placed on her by the restrictive covenant as being “inconsistent with both First Department and Court of Appeals precedent.”

David Bowles of Bowles Liberman & Newman represents Patients Medical. He said on Thursday that “we respect the decision of the First Department, which relied greatly on the discretion of the Supreme Court and we do not believe it will have any effect on the ultimate enforceability of the non-compete clause.”

He also said that “the First Department ruled that money damages should be sufficient, and we shortly intend to move for summary judgment and obtain those money damages.”