Madras High Court Declares Non-Compete Clauses for Doctors Unlawful and Void
In a landmark judgment, the Madras High Court has emphatically stated that hospitals cannot treat doctors like factory workers or regular employees, asserting that doctors are independent professionals essential to healthcare. Justice N Anand Venkatesh delivered this ruling on Monday, dismissing an arbitration plea filed by MIOT Hospitals against Dr Balaraman Palaniappan, a cardiothoracic surgeon, and imposing a cost of ₹1 lakh on the hospital payable to the doctor.
Court Criticizes Hospital's Contractual Practices
The court highlighted that doctors can thrive without hospitals, but hospitals cannot exist without doctors, making it imperative to respect their professional autonomy. MIOT Hospitals had initiated arbitration proceedings, alleging that Dr Palaniappan breached a professional contract by joining a competitor hospital in Chennai, violating confidentiality, non-solicitation, and non-compete clauses. However, the court found that the doctor had terminated the agreement with proper notice as per the contract terms, rendering the hospital's claims baseless.
Justice Venkatesh condemned the inclusion of non-compete and non-solicitation clauses in doctor agreements, stating they are "opposed to public policy" and must be considered "unlawful, unenforceable, and void ab initio." He expressed dismay at the hospital's approach, suggesting it either copied such clauses from technology company employee contracts or prioritized profit over patient care, indirectly admitting to being a profit-driven entity rather than a service-oriented institution.
Emphasis on Doctor Independence and Patient Welfare
The court reinforced that doctors have the right to practice wherever they choose and cannot be restricted from treating patients who previously sought care at a particular hospital. "A doctor is an independent professional who cannot be stopped from rendering services wherever they want and cannot be barred from attending to patients just because those patients were earlier treated at the petitioner hospital," the judgment noted. This decision underscores the critical role of doctors in healthcare and aims to prevent hospitals from imposing unfair contractual restraints that hinder medical practice and patient access.
This ruling sets a significant precedent, potentially impacting how hospitals draft contracts with medical professionals across India, ensuring greater protection for doctors' rights and promoting ethical healthcare practices.
