Friday, November 20, 2009

Scope of Arbitration Submission Renders Decision on Non-Compete Remedy Unreviewable (Comprehensive Orthopaedics v. Axtmayer)

A physician and his former medical practice became embroiled in a dispute over his former employment, and like many such cases, the cause was submitted to arbitration. One of the issues in dispute concerned the physician's non-compete agreement, and the practice's assertion he breached it.

As part of the arbitration submission, the arbitrator was charged with awarding attorneys' fees to the plaintiff if the medical practice prevailed under its non-compete claim. The arbitrator rendered an award for the practice, but found that - as written - the non-compete claim was overbroad in its restrictions and that the liquidated damages should be reduced from $150,000 to $75,000. It declined to award attorneys' fees due to the reformation.

Was this decision proper?

Maybe, but according to the Supreme Court of Connecticut, that is not really the issue. When a matter is submitted to binding arbitration, the only reviewable issue is whether the arbitrator had the authority to reach the issue decided - not whether the decision was factually or legally correct.

Clearly, the parties disagreed as to whether the medical practice ultimately "prevailed" by winning - in essence - half of what it requested. The counterview of this is the physician may have won, just as much as the medical practice lost. Perhaps his benefit from the breach exceeded $75,000, and he considered the award not a loss at all, but rather a victory.

Ultimately it doesn't really matter. The Supreme Court of Connecticut was absolutely correct to hold that the parties' decision to kick the issue to an arbitrator meant judicial review was exceedingly narrow.


Court: Supreme Court of Connecticut
Opinion Date: 10/20/09
Cite: Comprehensive Orthopaedics and Musculoskeletal Care, LLC v. Axtmayer, 980 A.2d 297 (Conn. 2009)
Favors: Employee
Law: Connecticut

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