United States District Court, D. Maryland
OCCUPATIONAL HEALTH CENTERS OF THE SOUTHWEST, PA, DBA. CONCENTRA MEDICAL CENTERS Plaintiff,
ROBERT TONEY, JR., M.D. Defendant.
Lipton Hollander United States District Judge
Memorandum Opinion, I address a motion for preliminary
injunction, seeking enforcement of a restrictive covenant
against a physician.
April 10, 2017, plaintiff Occupational Health Centers of the
Southwest, P. A., d/b/a Concentra Medical Centers
("Concentra") filed suit against defendants Robert
Toney, Jr., M.D. and Workpro Holdings, LLC, d/b/a Workpro
Occupational Health, now known as PTN Occupational Health
Holdings, LLC ("Workpro"). ECF 1; see
also ECF 6 at 1, n.l. Workpro is a subsidiary of Pivot
Physical Therapy. See ECF 1-6 at 2.
Toney worked for Concentra from 2000 until his resignation in
2017. For most of that time, Concentra was the contractor for
a particular State contract, discussed infra.
However, the State recently awarded that contract to Workpro,
a competitor of Concentra in the field of occupational
medicine. And, on or about April 10, 2017, Dr. Toney
commenced employment with Workpro.
Dr. Toney, the Complaint (ECF 1) sets forth two
"claims". The first is for "Temporary,
Preliminary, and Permanent Injunction" and the second is
for breach of contract.2
also submitted several exhibits with its suit. See
ECF 1-1 to ECF 1-8. These include a "Physician Services
Agreement" ("Agreement") executed by Dr.
Toney, dated July 30, 2000. See ECF 1-4. In sum, the
non-competition provision of the Agreement provides that, for
a period of two years following the termination of Dr.
Toney's employment with Concentra, Dr. Toney may not work
for a competitor in the medical field of occupational
medicine if it is within the "Prohibited Area."
to Concentra, by working for Workpro, Dr. Toney has violated
the noncompete provision of the Agreement. In Concentra's
view, if Dr. Toney is permitted to work for Workpro,
"those employers who came to rely on his skill set [at
Concentra] will likely be inclined to move their business
from Concentra to Workpro, which will cause Concentra
irreparable harm." ECF 1, ¶ 5.
with its Verified Complaint (ECF 1), Concentra filed a
"Motion for Temporary Restraining Order And Preliminary
Injunction" (ECF 2), supported by a memorandum of law
(ECF 2-1) (collectively, "Motion"). The Motion
seeks to enjoin Dr. Toney from working for Workpro.3
April 13, 2017, while Workpro was still a party defendant,
Dr. Toney and Workpro submitted a joint response in
opposition to the Motion (ECF 6, "Opposition"),
supported by the Affidavit of Dr. Toney (ECF 6-1) and another
exhibit. ECF 6-2. Concentra replied (ECF 7,
"Reply") and submitted an additional exhibit. ECF
Order dated April 14, 2017, docketed on April 17, 2017 (ECF
8), I directed plaintiff to clarify the basis for the
Court's diversity jurisdiction. Given that Workpro is an
LLC, I indicated that Concentra did not sufficiently
demonstrate diversity of citizenship. See Cent. W.
Virginia Energy Co. v. Mountain State Carbon, LLC, 636
F.3d 101, 103 (4th Cir. 2011) ("For purposes of
diversity jurisdiction, the citizenship of a limited
liability company ... is determined by the citizenship of all
of its members."); see also Clephas v. Fagelson,
Shonberger, Payne & Arthur, 719 F.2d 92, 93 (4th
Cir. 1983) (explaining that it is "hornbook law"
that the citizenship of unincorporated entities is determined
by the citizenship of all of its members).
Monday, April 17, 2017, the Court convened an emergency
hearing on the Motion. At that time, counsel agreed to
proceed on the request for a preliminary injunction, rather
than the request for a temporary restraining order. However,
because counsel for the parties were unable to confirm the
existence of diversity jurisdiction, the hearing was
continued until Friday, April 21, 2017.
interim, the Court held a telephone conference with counsel
on April 19, 2017. Plaintiffs counsel informed the Court
that, in fact, Workpro and Concentra are not diverse because
both entities possess members who are citizens of Texas.
Thereafter, to preserve diversity jurisdiction, Concentra
filed a notice of voluntary dismissal as to Workpro. ECF 10.
By Order of April 20, 2017 (ECF 11), Workpro was dismissed
from the case, without objection.
the close of business on April 20, 2017, Dr. Toney submitted
a supplemental response in opposition to the Motion. ECF 12
("Supplemental Opposition"). It is supported by Dr.
Toney's Supplemental Affidavit (ECF 14-2) and the
Affidavit of Brian Shinkle, M.D., the Medical Director of
Workpro (ECF 12-2), with exhibits. See ECF 12-2 at
Court held an evidentiary hearing on the Motion on April 21,
2017 ("Hearing"). At the Hearing, plaintiff called
Dr. Toney as the sole witness and introduced additional
exhibits. Both sides also relied on the exhibits that they
had previously included with their written submissions.
conclusion of the Hearing, because of the urgency of the
matter, I delivered a brief oral ruling, granting the Motion,
in part, subject to plaintiffs satisfaction of the bond
requirement and the submission of a proposed order that
identified the locations of Concentra's offices in
Maryland in 2000. I also informed counsel and the parties
that a written ruling would follow, in order to supplement,
clarify, and explain the oral ruling.
Factual Background 
is a Texas professional association with its principal place
of business located in Addison, Texas. ECF 1, ¶ 7. Among
other things, Concentra is "engaged in the business of
Occupational Medicine." Id., ¶ 16.
Occupational Medicine is "a branch of occupational
health concerned with the prevention and treatment of
workplace injuries, chronic illnesses, and diseases.
Occupational Medicine clinicians assess workplace conditions
and medical history to develop a treatment program by
focusing on the physical and mental well-being of injured
operates occupational health clinics across the United States
with board certified physicians trained in certain
specialties, including public health, preventive medicine,
family practice, toxicology, and medical research, among
others. Id., ¶ 17. Concentra also works with
employers like the State of Maryland "to develop an
effective treatment program for injured employees...."
import here, Concentra "has been the incumbent
contractor for every iteration of an occupational medical
services contract awarded by the State of Maryland "for
at least the past fifteen years, " to perform certain
kinds of work evaluations for injured workers. ECF 1, ¶
2. This contract is known as the State Medical Director
and Occupational Medical Services for Maryland State
Agencies (the "State Contract"). Id.;
see ECF 1-3.
Toney, a Maryland resident, graduated from medical school in
1997. Hearing. He joined Concentra in 2000, upon completion
of his medical residency. Hearing; ECF 1, ¶ 23. Dr.
Toney is board certified in family medicine. Id.,
¶ 4. However, "[o]utside of his residency, which
was completed over 16 years ago, Dr. Toney has never
practiced in the area of family medicine." ECF 12 at 5.
Rather, he spent over sixteen years practicing occupational
medicine with Concentra. Id.
2006, Dr. Toney became Concentra's "Medical Director
for Medical Advisory Services" as well as the
"State Medical Director" ("SMD") under
the State Contract. ECF 1, ¶ 2; see also id,
¶ 22. The SMD is "the principal
physician for the State charged exclusively with performing
workability evaluations for injured state workers and
approving the use of leave banks for these employees."
ECF 1, ¶ 23.
claims that, in addition to Dr. Toney's work as SMD, Dr.
Toney had other responsibilities. Along with the services
that Dr. Toney provided under the State Contract, Dr. Toney
allegedly "provided Occupational Medicine care to
patients through additional contracts with employer clients
other than those serviced by the State Contract."
Id., ¶ 25. And, at the Hearing, Dr. Toney
acknowledged that he has held other positions at Concentra.
He testified that between 2000 and 2006, before he became the
SMD, he worked for Concentra in the position of Medical
Director at two of its locations.
a competitive bidding process, the 2017 version of the State
Contract ("2017 State Contract") was recently
awarded to Workpro. On February 15, 2017, after Concentra
lost the 2017 State Contract to Workpro, Dr. Toney gave
notice of his intention to resign from Concentra, effective
April 7, 2017. ECF 1, ¶ 35. He commenced his employment
with Workpro on April 10, 2017. Dr. Toney testified that he
now serves as the State Medical Director with Workpro, which
is the same position he previously held with Concentra from
2006 until early 2017.
maintains that it trained Dr. Toney in the field of
occupational medicine and "dedicated significant
resources" to him, including continuing medical
education. ECF 1, ¶ 19. Moreover, Concentra asserts that
Dr. Toney "benefitted from Concentra's advertising,
goodwill, name recognition, promotional marketing, and sales,
administrative, and clerical support." Id.,
claims that, to "protect its investment" and its
proprietary "information", it requires employees
"to enter into contracts that contain restrictive
covenants." ECF 1, ¶ 21. As a condition of his
employment, Dr. Toney executed a Physician Services
Agreement. See ECF 1-4. By its terms, the Agreement
had an "Effective Date" of July 30, 2000.
there is no contention that the Agreement had expired. Nor
was the Agreement tied to a particular employment contract
that had otherwise expired. Indeed, the evidence at the
Hearing established that Dr. Toney knew the Agreement was
still in effect. See Plaintiffs Hearing Exhibit
6 of the Agreement contains the section titled
"Non-Competition, " which provides,  ECF 1-4,
Section 6(c), at 5-6 (bold added):
Non-Competition. Physician covenants that, during
the Employment Term, and, if Physician terminates this
Agreement or if Association terminates this Agreement for
Cause, for the period of time immediately thereafter set
forth on Schedule I (the "Restricted Period"),
without the prior written consent of Association, Physician
will not, directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder
(other than ownership of securities of a publicly held
corporation purchased through a broker on an established
stock exchange or the Nasdaq system at an original cost of
not more than $25, 000), corporate officer, director,
investor, or financier, or in any other individual or
representative capacity, engage or participate in or consult
with any business within the Prohibited Area (as described on
Schedule I), or any practice of medicine which is devoted
primarily to the practice of occupational medicine within the
Prohibited Area, that is in competition with
Association's practice, the business of Concentra, and/or
the products or services offered by Association and/or
Concentra in such area, or engage in any act or activity
which would interfere with or harm any business relationship
Association and/or Concentra may have with any patient,
customer, supplier, employee, or investor. Notwithstanding
the foregoing, Physician shall not be prohibited from working
as a physician not engaged in the practice of occupational
I of the Agreement defines the Restricted Period as two
years. ECF 1-4 at 11. And, the Prohibited Area is defined in
Schedule I as "[t]he area within a twenty (20) mile
radius of any facility owned, operated, or managed by
Association or Concentra, or any Affiliate of Association or
Concentra within the State of Maryland." Id. at
11. According to Concentra, the Prohibited Area currently
encompasses twelve offices in the following locations:
Baltimore, Glen Burnie, Columbia, Lanham, Elkridge, Capitol
Heights, Beltsville, and Gaithersburg. ECF 1, ¶ 3; ECF 7
Motion, Concentra seeks to enjoin Dr. Toney from working
within a twenty mile radius of any of all twelve of its
current locations. ECF 1, ¶ 54; ECF 7 at 10. However, at
the time Dr. Toney signed the Agreement, Concentra had only
eight locations in Maryland. ECF 12 at 5. Notably, there is no
provision in the Agreement that indicates that the parties
intended to extend the twenty mile radius to include any
future locations established by Concentra.
the Agreement provides that it "shall be construed under
and in accordance with the laws of the State of
Licensure[.]" Id., Section 8(h) at 9. Maryland
is the State of Licensure. Id. at 11. And, the
Agreement contains a severability clause. See
The 2017 State Contract 
January 5, 2016, the Maryland Department of Budget and
Management ("DBM") issued a "Request for
Proposals" for "State Medical Director and
Occupational Medical Services for Maryland State
Agencies" ("2016 RFP"). See ECF
1-3. The 2016 RFP includes the Contract
as "Attachment A". ECF 1-3 at 79. Section 2 of the
Contract states that it incorporates the terms of the 2016
RFP. Thus, it appears that the 2016 RFP essentially became
the 2017 version of the State Contract. Accordingly, I will
sometimes refer to the 2016 State RFP as the 2017 State
Contract. The term of the 2017 State Contract is about 5
years. ECF 1-3 at 13, § 1-4.4.
a competitive bidding process, the 2017 State Contract was
awarded to Workpro. ECF 6-1, ¶ 9. The submissions do not
specify precisely when the 2017 State Contract was awarded.
But, Workpro assumed the administration of the 2017 State
Contract on April 1, 2017. ECF 1, ¶ 2. A few days later,
on April 10, 2017, Dr. Toney began to work for Workpro as the
SMD - the same position he held since 2006 with Concentra.
And, as indicated, Concentra had held the State Contract for
the preceding fifteen years.
undisputed that, at the time the 2017 State Contract was
awarded to Workpro, Dr. Toney worked for Concentra. ECF 2 at
15; see also ECF 2-1, ¶ 12. Thus, Workpro was
deemed qualified for the award of the 2017 State Contract
without the benefit of Dr. Toney as an employee. ECF 1,
Section 1.1 of the 2016 RFP, the "Summary Statement,
" DBM indicated that it was issuing the RFP "to
provide State Medical Director (SMD) and Occupational Medical
Services, which may be used by all agencies of Maryland State
Government.... The current contract and subsequent contract
resulting from this RFP are the primary contracts available
to State agencies to obtain SMD and Occupational Medical
Section 1.1.5 of the 2017 State Contract provides, ECF 1-3 at
Maryland County, municipal, and other non-State of Maryland
governments or government agencies and not for profit
organizations within the State of Maryland may purchase from
the Contractor goods or services covered by this Contract at
the same prices chargeable to the State. All such purchases
by non-State of Maryland governments, government agencies or
not for profit organizations:
(1) shall constitute Contracts between the Contractor and
that government, agency or organization;
(2) shall not constitute purchases by the State or State
agencies under this Contract;
(3) shall not be binding or enforceable against the State;
(4) may be subject to other terms and conditions agreed to by
the Contractor and the purchaser. The Contractor bears the
risk of determining whether or not a government, agency or
organization with which the Contractor is dealing is a State
of Maryland agency.
All Contract prices, terms, and conditions must be provided
to any Maryland local government or not for profit
organization requesting services under this Contract.
party has clearly identified which State agencies are
required to utilize the 2017 State Contract. But, at a
minimum, it appears that the Maryland Department of
Transportation, the Maryland Transportation Authority, and
the Maryland Transit Administration must utilize the services
provided under the 2017 State Contract. See ECF 1-3
at 12, § 1.2, ¶ 40.
noted, Dr. Toney worked for Concentra as the SMD, and now
holds that same position with Workpro. The 2017 State
Contract RFP defines "State Medical Director" as
follows, ECF 1-3 at 12, § 1.2, ¶ 40 (italics
State Medical Director (SMD) - The physician or small
centralized group of physicians designated by either the
Secretary of Budget and Management or the Secretary of
Transportation to exercise all authority vested in
Secretaries with respect to medical examinations and
investigations relating to employment (including pre and
postemployment) with the State Personnel Management System
and the Transportation Human Resources System. The SMD shall
serve as the Medical Advisor to MDOT, MTA and MdTA. Per COMAR
17.04.03.16, the SMD may designate this authority. The SMD
may also designate facilities in which employees are seen by
heath care professionals (i.e. nurses, physician assistants,
etc.) that are authorized by the SMD (See COMAR 17.04.03.16B
(1)) to make medical determinations as related to the
services under this Contract. The SMD still has final
authority over all decisions or determinations of medical
Code of Maryland Regulations ("COMAR"), referenced
in § 1.2, is pertinent. Title 17 of COMAR applies to
DBM. Subsection 4 applies to Personnel Services and Benefits.
COMAR 17.04.03.16(A) states that the SMD "shall exercise
all authority vested in the Secretary with respect to medical
examinations and investigations relating to employment with
the State." Among other things, the SMD shall also
"conduct medical examinations of applicants and current
employees as provided in State Personnel and Pensions Article
["S.P.P."], §§ 2-302(b)(1)(vi) and
2-303[.]" COMAR 17.04.03.16(B)(2). And, of import,
"[t]he determination of the [State] Medical Director in
examinations of applicants conducted under.. .this regulation
is final and is not subject to review by the Office of
Administrative Hearings ["OAH"]." COMAR
3.23 of the 2017 State Contract is titled "Workability
Examinations." Section 22.214.171.124 states: "Employees
may be referred to the SMD for a comprehensive workability
examination." ECF 1-3 at 33. Among other things,
Workability Examinations "evaluate the employee's
current medical capabilities and limitations with regard to
the job duties of the employee's position. If the
employee has medical limitations that prevent the employee
from performing assigned job duties, " the evaluation
must "determine if the employee is medically capable of
temporarily performing modified duties, indicate what the
specific duty restrictions are, estimate length of modified
duty or determine that the limitations are
"[f]or employees with frequent sick leave usage, "
the examination seeks to "determine if the frequency of
use is medically justified based on the nature/severity of
the medical condition(s). In some cases, it may be necessary
to determine if the employee has a chronic medical condition
that has an ongoing and significant impact on the
employee's attendance, work performance or ability to
perform assigned job duties." Id.
terms of the 2017 State Contract, an employee must be seen by
the SMD or his designee within fifteen days of any agency
request. Id. And, at a minimum, the examination must
include, inter alia, a physical examination,
personal health history, and a review of relevant medical
records. Moreover, under certain circumstances, diagnostic
studies and laboratory testing may be performed, as well as
follow-up examinations. Id. at 34.
explained the difference between a Workability Examination,
performed by the SMD, and an Independent Medical Examination
("IME"), such as for a worker's compensation
matter, in a document titled "Questions And Responses
#2, " issued in conjunction with the 2016 RFP. The DBM
said, ECF 12-2 at 5:
The Workability Exam is only performed by the State Medical
Director/Department Medical Advisor as identified on p. 11
and p. 40 of the RFP; and this is very important. The title
and authority of the State Medical Director is identified in
COMAR 17.04.03.16. The title and authority of the Department
Medical Advisor is identified in COMAR
11.02.06.02. Under COMAR, the determination of
the State Medical Director/Department Medical Advisor is
"final and not subject to review by the Office of
Administrative Hearings." As a result, there are
particular actions State agencies can take based on the
results of the Workability Exam which they would not be able
to take based only on the results of an EVIE. This is the
most important material distinction between an Initial
Workability Examination and an Independent Medical Exam.
Hearing, Dr. Toney acknowledged the similarity between a
Workability Examination, a specific kind of medical
examination under the State Contract, and an IME.13 As Dr. Toney put
it, the distinction is one of "impact." In
particular, a Workability Examination provides finality,
because it is not subject to challenge or review by OAH.
126.96.36.199(e) of the 2017 State Contract is titled
"Non-Compete Clause Prohibition." The defense
characterizes this provision as a waiver clause. ...