Tuesday, November 12, 2013

Berlin v. Sarah Bush Lincoln Health Center case brief

Berlin v. Sarah Bush Lincoln Health Center case brief summary
688 N.E.2d 106 (1997)

Defendant hospital appealed an order of the appellate court which affirmed the order of the Circuit Court of Coles County (Illinois), which granted summary judgment to plaintiff doctor in his claim for to have the restrictive covenant of his employment agreement with the hospital declared unenforceable.


In the doctor's motion for summary judgment seeking a declaration on the unenforceability of a restrictive covenant, the circuit court reasoned that the hospital, as a nonprofit corporation licensed under the Hospital Licensing Act, 210 Ill. Comp. Stat. 85/1 et seq., and employing physicians, was practicing medicine in violation of the prohibition on the corporate practice of medicine.


  • An appellate court affirmed and the court granted the hospital's petition to appeal. 
  • The doctor contended that, because the term of the restrictive covenant had ended the appeal was moot. 
  • The court held that the determination of the hospital's ability to employ physicians and possible liability for a contract breach on the part of the doctor were important consequences that bore consideration. 
  • The court declined to apply the corporate practice of medicine doctrine to licensed hospitals. 
  • The court held that a hospital's authority to employ licensed physicians for was reasonably implied from different legislative enactments. 
  • The court also held that the public policy concerns, which supported the corporate practice doctrine, were inapplicable to a licensed hospital in the modern health care industry.

The court reversed the summary judgment awards of the lower courts, which held that the employment agreement between the doctor and the hospital was unenforceable because the employment itself was illegal. The court remanded for a determination of the enforceability of the restrictive covenant of the employment agreement.

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