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Business Observer Friday, Apr. 5, 2019 4 months ago

Medical practice, ex-doctors mired in legal dispute

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Recently resigned providers allege unfair non-compete agreements. Fort Myers-based Company counters they are challenging policies they created themselves.

Just as 21st Century Oncology — under new ownership and leadership — nears the completion of its emergence from bankruptcy and legal challenges, the Fort Myers firm faces a new lawsuit brought by four former physicians.

The foursome, alleging 21st Century is an illegal monopoly, includes one of the company’s co-founders and the son and daughter of another co-founder, all of whom have left the company. The lawsuit, filed in U.S. District Court in Fort Myers, also poses a business conundrum: can a noncompete contract become a company's move toward creating a monopoly in a hard-to-enter niche medical service? 

Three days after submitting their resignations, Drs. Ari Dosoretz, Amy (Dosoretz) Fox and James Rubenstein joined co-founder Dr. Michael Katin, who had previously retired, in a lawsuit filed March 18. The plaintiffs contend Century 21 Oncology improperly maintains “a monopoly over the provision of radiation oncology services in Collier, Lee, and Charlotte Counties in the state of Florida through extensive anti-competitive conduct in violation of federal antitrust laws.”

Co-founder and former CEO Dr. Daniel Dosoretz, who had previously stepped down from leadership and continued practicing for the company, is not party to the suit. He resigned March 15 along with the plaintiffs.

21st Century Oncology officials counter that the suit cites policies implemented by prior ownership — effectively filing action against their own business practices. 

But the lawsuit alleges “… each plaintiff physician seeks a declaration that his or her non-compete agreement is not enforceable as drafted because it is overly long, overly broad, or not reasonably necessary to protect a legitimate business interest of the defendants.”

“The doctors are courageously suing 21st Century Oncology for improperly maintaining a monopoly over the provision of radiation oncology services in Collier, Lee and Charlotte counties through extensive, recent anti-competitive conduct in violation of federal antitrust laws,” Luis Suarez, attorney at Boies Schiller Flexner, which represents the plaintiffs, tells Coffee Talk. “21st Century’s anti-competitive conduct includes requiring the radiation oncologists who work for them in these three counties — the only radiation oncologists in these counties — to sign onerous non-compete agreements that entirely prevent or sharply limit these doctors’ ability to challenge 21c’s monopolist practice in these counties.”

21st Century Oncology says the case lacks merit, adding that the complaints pre-date the practices of the current company ownership and management.

“Hours after submitting their resignations (the plaintiffs) jointly filed a lawsuit against the company seeking to circumvent valid non-compete clauses based on allegations of behavior that pre-dates the current ownership and management team,” a company spokesman tells Coffee Talk. “The company believes that the case has no merit and intends to vigorously defend the allegations. These allegations are an attempt at distraction related to historical matters that no longer exist.”

On March 22, 21st Century Oncology filed a counter action in U.S. Bankruptcy Court Southern District of New York asking that court to seize jurisdiction over the case. The company alleges the plaintiffs had ample opportunity during bankruptcy proceedings to raise their objections and failed to do so. Citing the bankruptcy court's authority in the matter, the complaint claims the impetus behind the plaintiffs' action is that they, understanding the employment agreements were assumed in the bankruptcy case and that they are bound by the terms of the employment agreements, seek to invalidate them after the fact. The bankruptcy case was closed in December but the court could choose to reopen it for this issue.

(This story was updated to reflect the counter action filed March 22.)

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