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A lawsuit may put Indiana’s new physician non-compete restrictions to the test

A brown brick building, shot such that the ground can't be seen but the three top stories can. There are windows along the slanted edges of the building and a concave portion in the center. On the left side of that center section of windows is a sign reading "Lutheran Hospital" with a cross below it and a logo in the shape of a blue ball with curvy lines beside it. On the right side of the center portion is another sign reading "Lutheran Children's Hospital" with the image of a treehouse beside it.
FILE PHOTO: Peter Dominowski
The Lutheran Health Network is "one of the largest employers in the region" of northeast Indiana, according to the network's website.

A Fort Wayne doctor is suing his employer to get out of a non-compete agreement. The suit could be the first test of a new state law that restricts new non-competes for some physicians.

Dr. David Lankford is worked at Lutheran Hospital as an employee of Lutheran Medical Group, one of several employers providing doctors to the larger Lutheran Health System. As a pediatric intensivist, Lankford saw “kids that are the sickest of the sick” in an intensive care unit (ICU). He quit after dealing with workload issues that “unfortunately weren't able” to be resolved.

Now, he’s suing to get out of a non-compete agreement that otherwise prohibits him from working in the Fort Wayne area for what could be years. It’s unclear how long exactly, as the details of his employment agreement are confidential.

READ MORE: Non-competes on primary care doctors will be banned. Other specialists get new potential routes out

“It feels like if I had to leave and I would almost be abandoning the kids that I that I care for and that are part of my community,” Lankford said. He’s lived in Fort Wayne about five years. “I would like to be able to take care of the community that I love.”

In an interview and complaint filed in Allen County Superior Court, Lankford and his attorney, Kathleen DeLaney, said he quit after Lutheran laid off its non-intensive pediatric hospitalists about a year ago. They allege the hospital shifted those doctor’s caseloads to Lankford and other intensivists, “ballooning” the number of children they had to care for.

“The contract is very specific about what his specialty is and what services he is being asked to perform,” DeLaney said. “When the hospital decided to let go of all of the pediatric hospitalists, they asked Dr. Lankford to provide care outside of his subspecialty and outside the scope of his contract.”

Lankford said he was concerned by the higher caseload “because it's difficult to take care of that many patients in a safe manner.” Lutheran allegedly refused attempts by Lankford and his attorney to address the issue by renegotiating the terms of his contract. Lutheran declined to comment for this story.

“Unfortunately, it's–it's come to this point where we weren't able to get a resolution despite many attempts,” Lankford said. “So we're asking the court to help us get that resolution so I can go back to providing care for the critically ill children around Allen County.”

Indiana’s new physician non-compete law bans health care employers from putting non-competes in employment contracts, but only for primary care physicians employed after July 1.

READ MORE: Some Eskenazi doctors freed from non-competes, most unaffected

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The ban leaves out other specialists or people employed before that date, like Lankford. As a compromise, lawmakers gave those physicians three different avenues out of their agreements. This case hinges on the avenue that makes a non-compete unenforceable if the physician quits “for cause.”

However, that provision is somewhat squishy. As the law’s author himself recognized, “cause” is not defined in the law. So it's up to the courts to decide what does or doesn’t count as “cause” in cases like these.

“Cause, in our view, would include the employer breaching the contract,” DeLaney, the attorney, said. “It's a pretty straightforward logical argument that we're going to be presenting to the court … So we have confidence that we have a well-founded case and that we have very compelling factual circumstances supporting the claim. ”

If Lankford loses this case, he may have to either buy out his agreement or leave Fort Wayne to practice elsewhere. DeLaney said they can’t disclose details of his buyout provision, including how much it may cost.

“In general, I represent a lot of doctors and I've seen a lot of physician contracts,” she said. “It seems that the prevailing buyout price that the hospital systems around Indiana have landed on is 100 percent of their prior year's compensation.”

If Lankford wins, he can keep practicing in the area. But DeLaney said it may mean more than that.

“For 20 years, I've been trying to identify a doctor who had the courage to stand up to this kind of contract. And doctors are typically fairly risk-averse. They don't love dealing with lawyers,” DeLaney said. “Dr. Lankford is the rare doctor who really firmly believes in advocating for his patients and advocating for access to health care for his patients … And I hope that other doctors will be encouraged and emboldened to advocate for access to patient care for their patients as well.”

Adam is our labor and employment reporter. Contact him at arayes@wvpe.org or follow him on Twitter at @arayesIPB.

Adam is Indiana Public Broadcasting's labor and employment reporter. He was born and raised in southeast Michigan, where he got his first job as a sandwich artist at Subway in high school. After graduating from Western Michigan University in 2019, he joined Michigan Radio's Stateside show as a production assistant. He then became the rural and small communities reporter at KUNC in Northern Colorado.