State law overrides a two-year physician noncompete blessed by an arbitrator

That deal came with strings. As part of the sale, the physicians signed a Limited Liability
Company (LLC) agreement whose noncompete barred them from competing with RAH Equity for at least two years across a long list of hospitals and imaging centers, plus a 25-mile radius around each.

In June 2023, the radiologist gave notice that he was leaving to join a practice in Middletown. The companies pushed the dispute into arbitration. His case was one of four the companies brought against radiologists they said had breached the noncompete. In August 2024, the arbitrator ruled the noncompete valid and binding and said the new job would breach it before the two-year clock ran out in June 2026.

The radiologist asked a trial court to throw out that award. The court did, agreeing the restraint went too far, and the appeals court has now affirmed that result.

The reason matters for HR. Connecticut’s statute on physician noncompetes, s. 20-14p, sets hard ceilings: no more than one year, and no more than 15 miles from where the doctor primarily practiced. The arbitrator’s award upheld a two-year, 25-mile restraint – well past both lines. Because the award “sanctions a restraint on the plaintiff’s ability to practice his profession that far exceeds both the temporal and geographic limits” the legislature set, the court held that enforcing it would violate public policy.

The court also stressed that deference to sophisticated parties’ bargains does not stretch to contracts that violate public policy. A large payout, an LLC agreement, and an arbitrator’s ruling did not put the covenant beyond the statute’s reach.