LIMITATION OF VETERINARY PRACTICE,
UNFAIR COMPETITION, NON-COMPETITION,
NON-SOLICITATION AND CONFIDENTIAL INFORMATION AGREEMENT
between
Regents of the University of Minnesota
by and through its College of Veterinary Medicine (“University”)
and
(“Employee”)
WITH THIS LIMITATION OF VETERINARY PRACTICE, UNFAIR
COMPETITION, NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIAL
INFORMATION AGREEMENT (“Agreement”), effective
, University and Employee
agree as follows:
WHEREAS, University desires to employ Employee in the capacity of
and
;
WHEREAS, this Agreement is being entered into as part of the employment
agreement between University and Employee; and
WHEREAS, Employee understands and accepts that University must maintain
and/or grow a sufficient case load to fulfill the veterinary student teaching
mandates set by the American Veterinary Medical Association (“AVMA”)
Council on Education (“COE”) and that of the Association of Veterinary
Clinicians (“AAVC”) Veterinary Internship and Residency Matching Program
(“VIRMP”); and
WHEREAS, University receives taxpayer funding from the state of Minnesota
for it to provide (a) an exceptional education for its residents who desire to
become licensed veterinarians, (b) veterinary services for the animal owning
public and (c) education and referral veterinary services for Minnesota’s private
sector veterinarians, and
WHEREAS, in the course of such employment, Employee will receive extensive
specialty training and come into the possession of certain confidential business
information such as research projects and grants; medical information, images,
photos and records concerning patients; individual veterinarian and veterinary
practice referral lists; specialty veterinary practice business policies; marketing
materials; referral correspondence practices and procedures; and similar matters
that are of vital importance in the successful conduct of the University’s teaching,
research, training and provision of clinical services; and
FORM: OGC-SC262
Form Date: 06.10.15
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WHEREAS, Employee recognizes that such confidential information would
provide Employee with an unfair advantage should Employee engage in
competition with the University and that such competition would substantially
and irreparably harm the University; and
WHEREAS, Employee agrees that the restraints and covenants in this Agreement
are common within the veterinary industry and reasonable and necessary to the
continued success of the University, and
WHEREAS, Employee and University desire to set forth in writing the following
terms and conditions of their agreement and understanding.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and of other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, Employee and University agree as follows:
1.
Employee Warranties. By signing this Agreement, Employee expressly represents and
warrants that Employee is not currently under any written or oral contractual obligation
regarding the preservation or protection of confidential, proprietary trade secret information of
any former University, or any other obligation associated with employment in or the termination
of any prior employment that would prevent Employee from being employed by University other
than as itemized and agreed upon in Attachment A.
2.
Time and Distance Restrictions During and After Employment.
2.1
Definitions.
meanings indicated.
As used in this Agreement the following terms shall have the
The term "Clients" shall include any person or entity that, directly or indirectly, through
one or more intermediaries, owns or controls the medical decision-making for an animal patient
that received veterinary care provided by Employee during the term of Employee's employment
with the University.
The terms "Referring Veterinarian(s)" and “Referring Veterinary Practices” shall
include any person who possesses a veterinary license or entity that owns or manages a
veterinary practice or, as identified by University’s records, who or which referred two or more
pet owning clients that were attended by University’s practice during the final two (2) years of
Employee’s term of employment with University.
The term “Restricted Period” shall be one (1) year after the conclusion of residency
training, or two (2) years, if specialty board certified.
The term “Restricted Area” shall be the University’s principal trade area bounded by a
radius of
(
) miles from University’s Veterinary Medical Center.
FORM: OGC-SC262
Form Date: 06.10.15
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2.2
Regional Business. Subject to the exclusions in Section 3 of this Agreement, the
University and Employee agree that University's business is regional in scope and Employee
understands that its business goodwill has been developed over considerable time and at great
expense. Employee accepts that University would suffer serious damage and loss of goodwill if,
during the term of this Agreement or upon the conclusion of employment, Employee competed
with University by providing veterinary services for Clients or Referring Veterinarian(s)
residing or located within the practice’s trade area who currently work for University’s
Referring Veterinary Practices during Employee’s tenure without the prior, written consent of
University.
2.3
Business Relationships. The parties understand and agree that an important part
of Employee's duties is to learn or enhance the skills required for Employee’s identified specialty
trade and develop goodwill for the University through Employee’s personal contact with animal
owners and their agents and Referring Veterinarians and Referral Veterinary Practices and
others having business relationships with University, and that there is a likelihood that this
goodwill, which is a proprietary asset of University, may follow Employee upon conclusion of
employment. Moreover, it is through Employee's employment that Employee will be introduced
to and encouraged to have and develop frequent contact with Clients, Referring Veterinarians
and Referral Veterinary Practices for which Employee does not presently provide specialty
veterinary services and that the development of such relationships is a material element of the
duties for which Employee has been hired and compensated. Thus, Employee accepts and agrees
that such contacts should not be converted to Employee's personal use upon the conclusion of the
employment relationship between University and Employee.
2.4
Necessity of Restrictions. Employee and University understand and agree that the
restrictions contained in this Agreement are necessitated in part because of (a) University’s
responsibilities to the taxpayers of Minnesota; (b) University’s responsibilities to veterinary
students, interns and residents; (c) the requirements of the AVMA COE, AAVMC and VIRMP;
(d) University’s efforts and resources required to maintain and/or grow University’s case load
and business; (e) in the event that Employee’s relationship with University concludes or is
terminated, the additional time and effort necessary to locate, select, hire, train and wait for new
specialists in training to complete their residency programs and prepare for and/or pass the
specialty boards while under University’s guidance so that they can be hired into faculty
positions.
2.5
Consideration. As a material inducement for University to enter into this
Agreement and pay Employee the compensation and benefits outlined in Employee’s
employment agreement, and in exchange for the additional professional education, case load
experiences, training and opportunities to develop Employee’s specialty expertise that will be
obtained while working for University, Employee agrees that during and after the conclusion of
employment and within the Restricted Period and Restricted Area, Employee will not render,
offer to render or attempt to render any veterinary services similar in scope to those for which
Employee received specialty training including, but not limited to, service as an independent
contractor for; owning, managing, operating or controlling; being employed by, participating in
or having an interest in, or being connected in any manner with the ownership, management,
FORM: OGC-SC262
Form Date: 06.10.15
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operation or control of any business or profession, including that of a mobile specialty practice,
engaged in the provision of veterinary services similar in scope to those provided by the
University, unless otherwise specifically exempted or excluded in Attachment A.
2.6
Permitted Services. Employee may provide veterinary services to Clients,
Referring Veterinarians and/or Referring Veterinary Practices at locations outside the
Restricted Area if Employee did not engage in any activity prohibited by this Agreement and
such clients were not solicited by Employee for the purposes of providing said veterinary
services.
2.7
No Material Hardship. Employee agrees and accepts that Employee’s education,
training and skills are transferrable to locations outside the above cited Restricted Area and, as a
result, the terms of this Agreement would not cause a material financial hardship on Employee if
Employee were to refrain from competing in such geographical area(s) upon the conclusion of
employment with University.
2.8
Acceptance of Employment/Restrictions. Employee further makes the decision to
accept employment with University and the necessary attendant commitments coupled with such
employment with full knowledge of the above cited factors and accepts responsibility to respect
and abide by the restrictions set forth herein.
3.
Exclusions. To avoid undue hardship for Employee during the term of or after the
conclusion of employment, University agrees to allow Employee to seek employment as (a) a
consultant or employee in an occupation that is not related to Employee’s practice of the
veterinary medical specialty for which he/she worked for, or obtained training by, University at
any location; (b) a government, industry, research or educational institution, provided that such
work does not compete with the services offered by University; (c) as set forth in Attachment A.
4.
Non-enforceability of Restrictive Covenants as a Result of Economic Issues. In the
event Employee has fulfilled Employee’s obligations under this Agreement and because of
changes in the economic climate of University’s trade area or because of materially deleterious
changes in the financial health of University’s practice, University terminates Employee’s
employment without cause, the parties agree that Section 2 will not be enforced.
5.
Solicitation.
5.1
Definition. For the purposes of this Agreement, solicitation of business includes
any type of in-person or telephonic oral or any written communications with existing clients
(including the use of social networking systems and devices) directed intentionally to specified
individuals or businesses as opposed to the public or profession at large where such discussion is
initiated by the departed Employee and designed to inform such people or businesses about the
availability, nature, and/or prices of veterinary products or services and attract those clients to
seek the services of the departing or departed Employee at the Employee’s business location or
future place(s) of work or employment. Solicitation does not include permitted advertising in the
form of press releases, advertising to the public or the veterinary profession at large, professional
listings in the white or Yellow Pages of telephone books or placing information about the
FORM: OGC-SC262
Form Date: 06.10.15
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departed Employee on a web site intended for the public or the veterinary profession provided
that such press releases, advertising or listings do not identify Employee as “formerly of this
University’s veterinary practice.” The restriction on advertising in the prior sentence includes
any advertising outside the Restricted Area that is displayed, circulated or broadcast within the
Restricted Area.
5.2
Diversion of Business. Employee further agrees, that during the term of
Employee’s employment and/or at any time up to two (2) years after Employee ceases to be
employed by University, for any reason, Employee will not solicit or divert business which is of
a similar nature to that of the University from any of University's Clients, Referring
Veterinarians or Referring Veterinary Practices existing on the date of termination of
employment or prior thereto, nor give any person, firm or corporation the right to do so, nor
dissuade them from utilizing the services of University.
5.3
Personnel Raiding of Staff. During and for one (1) year after Employee ceases to
be employed by University, for any reason, Employee agrees not to recruit, solicit, encourage,
entice or hire away any owner, independent contractor or employee working for or associated
with the University to participate in or assist with the formation or operation of any business that
competes or intends to compete with the University or to do any act that is disloyal to the
University, inconsistent with the University's interests or in violation of any provision of this
Agreement. For the purpose of this section, solicitation means any type of in-person
communications with University’s owners or staff members initiated by or made on behalf of
Employee or with Employee’s recommendation where the discussion is intended to entice such
parties to leave the employment of University and work for or with the departing or departed
Employee.
6.
Business Name. Employee agrees not to use any business name in a separate business
under which University lawfully operates prior to or after Employee’s departure that is
substantially similar to or easily confused with University’s personal or business name.
7.
Disparaging Comments. During the period of and after the conclusion of employment,
Employee and University agree not to make any public or private statements or generate
communications in any medium, including social networking media that disparages or defames
the other or University’s staff members and/or the procedures and services provided by
University.
8.
Remedies. If Employee violates any of the terms of this Agreement, University shall be
entitled to any and all remedies at law and equity, which may be cumulative, and shall include,
but not be limited to, the right of injunction or preliminary restraining order and the right to seek
damages. No bond or other security shall be required of University in connection with such
injunction or temporary restraining order. If University violates any of the terms of this
Agreement, Employee shall be entitled to any and all remedies at law and equity, which may be
cumulative, and shall include, but not be limited to, the right of injunction or preliminary
restraining order and the right to seek damages. No bond or other security shall be required of
Employee in connection with such injunction or temporary restraining order.
FORM: OGC-SC262
Form Date: 06.10.15
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9.
Reasonableness of Terms. Employee and University acknowledge that the restrictions
imposed by this Agreement are reasonable, that they are necessary to protect the legitimate
business interests of the University and Employee and that such restrictions do not and will not
impose an undue hardship on Employee or University.
10.
Competition During Pending Legal Proceedings. If Employee competes with
University prior to or during the pendency of any litigation to restrain such competition and/or
recover damage as a result thereof, and such litigation shall be concluded or terminated in the
University’s favor, then the restricted time period specified above shall be tolled during the
period of the Employee’s unfair competition and shall resume upon the conclusion or
termination of such litigation.
11.
Confidential Information.
11.1 Definition. “Confidential Information” includes all business, financial, tax, fee
schedules and medical records, including photographic or digital images of patients, telephone
lists and addresses of existing or potential clients, staff members or referring veterinary practices,
phone logs, appointment books, treatment forms, laboratory results, radiographs, mailing lists,
production records, case reviews, clinical trial protocols or submissions, template referral letters,
price lists, pricing information, new business development information, operations manuals and
training materials, reference books, records, techniques that are part of or related to protected
business and/or trade secrets, and any other information with respect to marketing information,
practice brochures, text, photos, videos or graphic illustrations used for marketing purposes
and/or in the development of a website as well as computer software programs and data created
before, during, or amended during the term of this Agreement, or any renewal thereof, as well as
all information that Employee has a reasonable basis to consider confidential.
11.2 Non-Removal. Employee agrees that Confidential Information, including
computerized information belonging to University, shall not be removed physically nor
electronically transmitted, copied, taken nor sent to an off-site location from University's place of
business. Such unauthorized removal will be grounds for immediate dismissal.
11.3 Prohibitions Against Use. Except as required by law, Employee shall not, during
Employee’s employment or at any time after Employee ceases to be employed by University,
either directly or indirectly, use, divulge, disclose or communicate, other than in connection with
Employee’s employment contract with the University, any Confidential Information to any
person, firm, corporation, association or other entity not employed by the University or not
authorized by the University to receive such Confidential Information, without the prior consent
of the University. Employee will use reasonable and prudent care to safeguard, protect and
prevent the unauthorized use and disclosure of Confidential Information.
12.
Return of Proprietary Property/Confidential Information. When Employee ceases
to be employed by University for any reason, Employee will promptly return all keys to
University’s facility or locked cabinets as well as University’s Confidential Information
(including all copies, notes, and extracts therefrom). Moreover, Employee shall erase or cause to
be erased all Confidential Information from any computer memory or storage that is not left with
FORM: OGC-SC262
Form Date: 06.10.15
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University. Employee agrees not to take any document or computer media containing any
Confidential Information. Employee shall return to the University all records (whether furnished
by the University or prepared by the Employee in the course of employment), and the Employee
shall neither make nor retain copies of any of such records after employment ceases.
13.
Governing Law. This Agreement shall be interpreted in accordance with and governed
by the laws of the state of Minnesota without giving effect to the conflict of laws provisions
thereof.
IN WITNESS WHEREOF, Employee and University execute this Agreement as set
forth below.
EMPLOYEE
REGENTS OF THE UNIVERSITY OF
MINNESOTA
By: __________________________________
Name:
Date: ________________________________
By: __________________________________
Name: Trevor Ames, D.V.M, M.S.
Title: Dean, College of Veterinary Medicine
Date: ________________________________
FORM: OGC-SC262
Form Date: 06.10.15
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Attachment A
Exceptions or Exclusions
FORM: OGC-SC262
Form Date: 06.10.15
A-1