![]() ![]() Mary s and did not maintain staff or admitting privileges at Central Maine Medical Center, (2) obtained the written consent of SOCHS chief executive officer, or (3) paid SOCHS $100,000, representing SOCHS reasonable liquidated damages. The geographic and temporal limitations could be avoided if the doctor (1) maintained active admitting privileges at St. In the event the doctors terminated their employment with SOCHS or were dismissed, a Limitation of Practice clause in their contracts forbade them from practicing medicine with Central Maine Healthcare Corporation, its affiliates, or its subsidiaries within a twenty-five-mile radius of 99 Campus Avenue in Lewiston for a period of two years from the date of the termination or dismissal. Mary s and regularly serve on call periods there. Further, in addition to seeing patients at Court Street, the doctors had to be staff members of St. For example, pursuant to their employment agreements, all fees or compensation received for the doctors services belonged to SOCHS and SOCHS paid the doctors salaries. Each doctor had an employment agreement with SOCHS, and these agreements were identical in all material aspects. 3 Community Clinical Services leased the services of these doctors from SOCHS. At the time that each doctor began at Court Street, he or she was new to the area and did not have an existing patient base. In 1997, Farrago and Stone began practicing at Court Street Family Practice, a branch of Community Clinical Services. SOCHS also financially assists Community Clinical Services by forgiving its management fees and other expenses, and by transferring money into its account to ensure that Community Clinical Services has cash available. Because Community Clinical Services does not generate enough revenue to cover its costs, SOCHS reallocates funds from St. SOCHS maintains one depository account for its healthcare system. Mary s are each separate corporations, but SOCHS provides management, human resources, information technology, and financial services for all three. ![]() SOCHS, Community Clinical Services, and St. Mary s Regional Medical Center, a Lewiston hospital. Among these entities are Community Clinical Services, a physician office practice with multiple sites, and St. BACKGROUND As an integrated healthcare system, SOCHS supports and manages several healthcare entities in the Lewiston-Auburn area. 2 and (3) even if the contracts contain a liquidated damages provision, it is unreasonable and therefore unenforceable. has since changed its name, but it has been referred to as SOCHS throughout this litigation to avoid confusion. On appeal, the doctors contend that (1) the restrictive covenants are unenforceable, (2) their contracts contain an optional buyout clause, not a liquidated damages provision, 1 Sisters of Charity Health System, Inc. Following a jury-waived trial, the Superior Court (Androscoggin County, Delahanty, J.) enforced the restrictive covenants and ordered each doctor to pay SOCHS $100,000 pursuant to the liquidated damages clauses in their contracts. to enforce restrictive covenants contained in contractual agreements between the doctors and SOCHS. (SOCHS),1 a nonprofit integrated healthcare system, sued its former employees Douglas Farrago, M.D., Raymond Stone, D.O., and Carolyn Kase, D.O. MAINE SUPREME JUDICIAL COURT Decision: 2011 ME 62 Docket: And-10-418 Argued: ApDecided: Panel: Reporter of Decisions SAUFLEY, C.J., and LEVY, SILVER, MEAD, and JABAR, JJ. ![]()
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