Noncompete clause fails to snuff radiology salesman’s jump to tech startup
One of the nation’s largest teleradiology providers has lost out on a request to immediately halt one former salesman from continuing to work at a technology startup.
Virtual Radiologic Corp.—or vRad, part of the larger Mednax—had sought an injunction to stop Michael Rabern from continuing his duties at Silicon Valley-based Nines Inc. However, a Minnesota judge rejected that request last week, arguing that vRad fell short of proving that Rabern violated its noncompete clause, Law360 reported March 5.
In his opinion, U.S. District Judge Patrick Schiltz noted that the former employee has not sold any teleradiology services in his first six months with the new firm, and thus did not cause any discernable harm to vRad.
“This lawsuit illustrates why it is not sufficient for a former employer to allege generally that—unless a departing sales representative is enjoined from competing—the former employer will suffer harm to customer good will," he said according to the report, adding that “the court cannot find a risk of imminent irreparable harm.”
Rabern first departed from the Eden Prairie, Minnesota-based firm back in mid-2019. And vRad filed suit about six months later seeking the injunction to prohibit him from sharing confidential information or soliciting its employees.
An earlier version of the noncompete contract had blocked Rabern from joining any competitor across the globe. However, the two parties later loosened the agreement. VRad argued that the amendment was rendered invalid, since its former employee “knowingly misrepresented” that Nines is not involved in teleradiology, which is the opposite of the truth.
Schiltz rejected that claim, calling the amended agreement “poorly crafted,” with vRad unable to offer an interpretation that “makes sense and comports with its text,” Law360 noted. He also reportedly accused the telerad vendor of flip-flopping on the matter and could not understand why the agreement was ever amended in the first place.
"VRad has no credible explanation for why it would agree to amend the noncompete of an employee who had assured it that nothing that he would be doing would violate the noncompete," the judge said.
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Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.