PROTECTION IN A CORPORATE SHUFFLE

In corporate acquisitions and reorganizations, the work isn't done when the closing documents are signed, especially when employers use non-compete and confidentiality agreements, says Sean Owens of Wood, Herron & Evans LLP.

An Ohio insurance agency learned that the hard way when the Ohio Court of Appeals recently ruled an agency's agreements didn't apply to certain employees.

"Whenever a company goes through an acquisition or reorganization, its employees should be required to sign new non-compete and confidentiality agreements," says Owens. "The trouble for this agency started with how its non-compete agreements were worded; each employee's two-year non-compete period would begin when their employment with the agency terminated for any reason. It didn't occur to anyone that if the agency was acquired, it technically wouldn't exist anymore, effectively "¢terminating' the employees."

Unfortunately for the agency, Owens explains, that's exactly what happened.

Ends with merger

"A group of employees left an agency, after being acquired and merged several times, taking their clients with them. The agency sued, claiming the former employees were prohibited from doing so by their non-compete agreements. However, the court ruled that the two-year non-compete periods had been triggered years prior when the agency was merged into another. Under Ohio law, a company that is merged into another ceases to exist. The fact that the employees had been continuously employed by the agency's successors was irrelevant."

"So," Owens concludes, "the moral of the story is to have your employees sign new non-compete and confidentiality agreements whenever you're involved in an acquisition or reorganization. Otherwise, they might not be enforceable when you actually need them." 
 

 
 
 
WELLINGTON PLANS WEST SIDE EXPANSION

Fresh on the heels of the grand re-opening of its expanded Eastgate office, Wellington Orthopaedics and Sports Medicine is planning for its next growth spurt "” the opening of a high-tech, 19,000-square-foot office on the city's West Side this summer.

The new center, slated to open in July in the Western Ridge medical campus just off the Rybolt Road exit on I-74, will replace the practice's current White Oak site.

"We feel (Western Ridge) is an area that's going to continue to grow, medically, with the Mercy system planning a hospital nearby, and our new office is going to be a substantial increase of our capabilities on that side of town," says Dr. James Plettner, Wellington's president.

The group signed a 10-year lease with Duke Realty for the space in December. They will add another physician to the staff as well as a number of physical therapists, says Plettner. Working closely with the medical community already present at Western Ridge, Wellington expects to increase its patient load by 40-50 percent.

Along with the investment in the new office, Wellington is also investing in technology. Wellington has purchased state-of-the-art digital x-ray systems for the new location.

"It's a considerable investment," says Plettner, "but digital x-rays dramatically decrease the radiation exposure to patients, as well as delivering a much better quality of imaging. The images are also easily transportable with new electronic medical record systems that are going to be in all seven of our locations shortly."

The group has already invested more than $1 million in the record systems.

Wellington, which treats more than 250,000 patients annually, offers a range of treatment options from total joint replacement to rehabilitation and sports/activity performance programs. It is affiliated with 18 local schools' athletic departments, as well as the Cincinnati Bengals and the Cincinnati Ballet.