Golden v. Cal. Emergency Physicians

When determining whether a settlement agreement is reviewable, traditional standards of ripeness apply. Additionally, covenants not to compete are not necessarily prohibited under section 16600 of the California Business and Professions Code.

Dr. Donald Golden was previously employed as an emergency room physician with California Emergency Physicians Medical Group (“CEP”). Dr. Golden sued CEP in California Superior Court for the loss of his job. Prior to the commencement of the trial, Dr. Golden and CEP reached an oral settlement agreement. In return for money, Dr. Golden agreed to dismiss the pending claims, waive his right to any future claims, and waive any future right to employment in any CEP facility. Later, Dr. Golden refused to sign the agreement, moving to have it set aside. The district court compelled Dr. Golden to sign the agreement, which he refused. On appeal, the Ninth Circuit dismissed the appeal for lack of jurisdiction. Dr. Golden’s former counsel moved for intervention by the district court, and the motion was granted. However, the case was dismissed. Dr. Golden appealed his case a second time, arguing that a this alleged contract is void under section 16600 of the California Business and Professions Code. The Ninth Circuit held that ripeness, using traditional standards, apply even those cases that seek to enforce a settlement agreement. Thus, the panel first analyzed whether Dr. Golden’s claim was ripe for review. Due to Dr. Golden’s claim being a substantial controversy between parties, with adverse legal interests of sufficient immediacy and reality, it was ripe. Next, the panel held that there is no reason to believe that covenants not to compete are prohibited from being contracted for, but the panel remanded to the district court in order to have them make a determination regarding the characterization of whether a covenant not to compete is a substantial restraint on Dr. Golden’s career. REVERSED and REMANDED.