An Illinois court recently had to decide the meaning of a non-compete provision contained in a physician’s employment contract with a hospital. This case reflects the adage of “the devil is in the details” when drafting such employment agreements.

The doctor argued for an interpretation of the non-compete provision that would allow him to either practice medicine within a 25-mile radius of the hospital or solicit any patient he treated while employed by the hospital for two years following termination of the agreement, but not both.

 On the other side of the courtroom, the hospital took the position that plain and unambiguous language of the restrictive covenant prohibited the doctor from practicing medicine within the restricted area for a period of two years and prohibited him from soliciting former patients.

In this instance, the Illinois court considered the exact contract language. It also noted that restrictive covenants are strictly construed and interpreted by the courts, and any doubts or ambiguities should be resolved against the restriction. At the same time, Illinois law provides that the primary objective in construing a contract is to give effect to the intent of the parties.

Importantly, the court noted:

“Ordinarily, the word ‘and’ should be read as conjunctive and ‘or’ should be read as disjunctive.  However, ‘and’ may be construed to mean ‘or’ in order to effectuate the intention of the parties where that intention is evident. This construction is never resorted to except for strong reasons, and the words should never be so construed unless the context favors the substitution.”

Upon reviewing the entire employment contract, the court found that the parties’ intent was that the hospital would be harmed by the doctor engaging in either of the competitive activities identified in the restrictive covenant. The court concluded that the doctor was prohibited from doing both of the activities (practicing medicine in a 25-mile radius and soliciting former patients.)