United States District Court, N.D. Alabama, Eastern Division
ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE
breach of contract action, Plaintiff Physiotherapy
Associates, Inc. asserts that, while working for
Physiotherapy and after he quit to work for a competitor,
Defendant James Doug DeLoach breached the terms of
non-compete and non-solicitation agreements that he had
entered with Physiotherapy. (See Doc. 1).
Physiotherapy contends that Mr. DeLoach's breach has
caused it to lose business and employees. Physiotherapy seeks
monetary damages and a permanent injunction prohibiting Mr.
DeLoach from breaching his non-compete and non-solicitation
case is before the court on Mr. DeLoach's motion for
summary judgment. (Doc. 75). The parties have fully briefed
the motion. (Docs. 75, 82, 87). The court WILL GRANT
IN PART and DENY IN PART Mr.
DeLoach's motion. Because Physiotherapy has not presented
evidence indicating that Mr. DeLoach breached the non-compete
and non-solicitation agreements, the court WILL GRANT
SUMMARY JUDGMENT in favor of Mr. DeLoach and against
Physiotherapy on Physiotherapy's claim seeking monetary
damages. As a result, the court finds as moot
Physiotherapy's request for injunctive relief, and
WILL DISMISS WITHOUT PREJUDICE that request.
Accordingly, the court WILL DENY AS MOOT Mr.
DeLoach's motion for summary judgment on the claim for
STANDARD OF REVIEW
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The court views the evidence in the light
most favorable to the non-moving party. Baas v.
Fewless, 886 F.3d 1088, 1091 (11th Cir. 2018).
“The moving party bears the initial burden of
demonstrating the absence of a genuine dispute of material
fact.” FindWhat Inv'r Grp. v.
FindWhat.com, 658 F.3d 1282, 1307 (11th Cir. 2011)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 323
owns and operates physical therapy and occupational therapy
clinics and provides sports medicine services to schools.
(Doc. 79-2 at 10; Doc. 83-1 at 3). More than 90% of its
business comes from physician referrals, and its largest
referral source in north Alabama is Andrews Sports Medicine
and Orthopaedic Center (the “Andrews Group” or
“Andrews”). (Doc. 79-2 at 12-13; Doc. 83-1 at 3).
DeLoach is a licensed occupational therapist who has
practiced occupational therapy and managed physical
rehabilitation facilities in northern Alabama since 1994.
(Doc. 75-6 at 3; Doc. 79-1 at 4, 18-24). Physiotherapy
offered Mr. DeLoach a position as an Area Vice President in
January 2013, and it confirmed its offer with a letter dated
January 14, 2013 (the “Offer Letter”). (Doc. 1-1;
Doc. 75-6 at 4).
Offer Letter begins by stating that Mr. DeLoach is an at will
employee, which “means that you are not employed for a
set period of time, and you or the Company may terminate your
employment at any time and for any reason.” (Doc. 1-1
at 2). And although the Offer Letter states that
“[t]his offer letter . . . is not intended to create an
employment contract, ” it also provides that signing
the Offer Letter and accepting employment with Physiotherapy
signals his agreement “to be legally bound and
obligated to comply with” the non-compete and
non-solicitation agreements. (Id. at 1, 4).
DeLoach's non-compete agreement required that, for a
period of twelve months after termination from Physiotherapy,
Mr. DeLoach would “not, directly or indirectly, own,
manage, operate, control, be employed by, perform services
for, consult with, solicit business for, participate in, or
be connected with the ownership, management, operation, or
control of, any business which performs outpatient
rehabilitation or orthotics or prosthetic services in the
Market Area.” (Id. at 4). The agreement
defined the “Market Area” as “the area that
is within a ten (10) mile radius of any of the Company's
facilities [ ] at which you provided services during your
employment . . . or for which you had . . . management or
supervisory responsibility.” (Doc. 1-1 at 4).
DeLoach also agreed not to solicit customers, vendors, and/or
associates of Physiotherapy for twelve months after his
employment with Physiotherapy terminated. (Doc. 1-1 at 4-5).
This meant that Mr. DeLoach could not
solicit, induce, or attempt to induce any past or current
Customer or vendor of the Company to (a) cease doing business
in whole or in part with or through the Company, or (b) do
business with any other person, firm, partnership,
corporation, or other entity which performs services material
similar to or competitive with those provided by the Company.
(Id. at 4). The Offer Letter defines
“Company” as “Physiotherapy
Associates” and “Customer” as “any
person, division or unit of a business enterprise with whom
within a two (2) year period preceding the date of
termination of your employment with the Company, the Company
. . . held a business or contractual arrangement to perform
services for Company. (Id. at 1, 4-5; Doc. 82 at
20). Mr. DeLoach is also prohibited from “solicit[ing],
interfer[ing] with, or endeavor[ing] to cause any
[Physiotherapy] Associate to leave his or her
employment.” (Doc. 1-1 at 5).
area vice president for Physiotherapy, Mr. DeLoach's job
responsibilities included providing hands-on occupational
therapy to patients, managing clinics for Physiotherapy in
north Alabama, and developing business opportunities in north
Alabama. (Doc. 75-6 at ¶ 5; Doc. 79-1 at 5, 7-8; Doc.
79-2 at 22). In particular, Mr. DeLoach was responsible for
developing Physiotherapy's relationship with the Andrews
Group, and he interacted with physicians or the CEO of
Andrews at least twice a month. (Doc. 79-1 at 38; Doc. 83-1
at ¶ 18).
early 2016, another company acquired Physiotherapy, although
Physiotherapy continued to operate under the same name. (Doc.
76-1 at 6-7; Doc. 79-2 at 11). The merger agreement provides
that “[a]s of [January 22, 2016], neither
[Physiotherapy] nor any [Physiotherapy] Subsidiary is a party
to or bound by . . . any agreement with any employee [ ] that
. . . provides for an annual compensation opportunity . . .
to exceed $100, 000 . . . .” (Id. at 27). It
is undisputed that Mr. DeLoach's annual compensation
exceeded $100, 000.
the merger, Physiotherapy's largest referral source, the
Andrews Group, developed concerns about the post-merger
management of Physiotherapy. (Doc. 79-5 at 10). As it
happens, around that time another company-ATI-that owns and
operates physical therapy clinics was looking to expand into
north Alabama. (Doc. 79-4 at 7-9; Doc. 83-1 at 6). In August
2016, ATI's Chief Operations Officer, Brent Mack,
contacted the Andrews Group's CEO, Lisa Warren, to
arrange a meeting to discuss ATI's business and plans for
expansion. (Doc. 79-1 at 27, 46; Doc. 79-4 at 28-29). During
the meeting, Ms. Warren expressed frustration with
Physiotherapy's new management. (Doc. 79-4 at 55). Mr.
Mack believed that an opportunity existed for ATI to expand
its business by getting referrals from the Andrews Group.
(Id. at 29, 53-55).
DeLoach had no involvement in the initial contact between Mr.
Mack and Ms. Warren, (doc. 79-4 at 9, 29, 53), but around the
time when they were meeting, Mr. Mack also contacted Mr.
DeLoach about interviewing for a position with ATI. (Doc.
79-1 at 27-28). On August 18, 2016, Mr. DeLoach sent ATI a
copy of his Offer Letter containing the non-compete and
non-solicitation agreements with Physiotherapy. (Doc. 79-1 at
29-30; Doc. 84-1 at 2-8). Later that same month, while Mr.
DeLoach was still working for Physiotherapy, he sent to ATI
an action plan entitled “DeNovo and Acquisition
Strategy.” (Doc. 84-7). In the action plan, Mr. DeLoach
identified potential locations for ATI ...