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Nursing Agency Can Sue Competitor for Interference With Contract, Court Says
Legal Eagle Eye Newsletter for the Nursing Profession
Quick Summary: An agency nurse must abide by a clause in the contract with the agency that the nurse will not accept employment with a client hospital for a designated period after assignment to the hospital as an agency nurse.
An agency has the right to a court order barring a nurse from taking or continuing such employment.
By the same token, a competing nursing agency has no right to hire nurses away from another agency and then send them back to work at the same hospital.
Persuading someone to break a valid contract is a malicious act for which a civil lawsuit can be filed.
To sue a competitor for wrongful interference with a contractual relationship, there must be proof the competitor:
Induced another person not to enter into or to discontinue a business relationship;
Acted improperly and without a legal privilege;
Acted purposely and maliciously with the intent to cause financial injury; and
Caused financial injury. COURT OF APPEALS OF GEORGIA, 1998.
Several certified registered nurse anesthetists (CRNAs) were employed by a nursing agency which assigned them to work at a certain hospital.
The CRNAs’ contract with the agency specified they could not accept employment with the client hospital for two years after leaving employment with the nursing agency.
A competing nursing agency wanted to take over the business of supplying CRNAs to the hospital and wanted ultimately drive the other agency into the ground by luring away all the personnel who worked for it, the court said.
The competing agency approached the CRNAs and got them to leave their agency and sign on with it. Then the competing agency assigned them back to work at the same hospital as employees of the competing agency rather than the original agency that first sent them there to work.
The original nursing agency sued the competing agency. The Court of Appeals of Georgia ruled there were valid grounds for a lawsuit.
First, a nursing agency is permitted to put a clause in its contract with its nurses that a nurse will not accept employment with a client of the agency for a reasonably short period of time (two years in this case) after leaving the nursing agency. A nursing agency has the right to enforce such a clause in its contract by getting a court order barring a nurse from working for a client hospital in breach of the contract, the court pointed out.
Second, the nursing agency that originally signed the nurses could sue the start-up competing agency for illegal competitive practices, the court ruled.
Inducing someone to commit breach of contract is an illegal competitive practice and grounds for a lawsuit, assuming it is a valid contract and breach of the contract caused direct financial harm, as in this case. Carroll Anesthesia Associates, P.C. v. Anesthecare, Inc., 507 S.E. 2d 829 (Ga. App., 1998).