1250 Broadway, 27th Floor New York, NY 10001


In 1992, Doctors Steven P. Stern and Ali Zangeneh (Dr. Z) started a dental practice known as "Dental Health Associates." Their partnership agreement contained a restriction or "restrictive covenant" which prohibited either partner from directly or indirectly competing against the partnership "for a period of 1 year after their retirement from or termination of employment within a 15 mile radius of our office."

Since it was undisputed that Dr Z established another dental practice within the delineated geographic area, the issue reviewed by the courts was whether the partnership had been "dissolved" for more than a year prior to the new practice's establishment.

In this particular instance, both the Orange County Supreme Court and the Appellate Division, Second Department, were of the opinion that Dr. Z breached the governing non-compete provision.  As noted in the decision, the only way to end the partnership was by way of "another written agreement, or termination of employment;" a triggering event which occurred much later than Dr. Z had contended (since Dr. Z continued to work full-time in the partnership's offices for a period of about a year after he afforded his partner written notice of "intention to terminate the partnership agreement …").  As a result of Dr. Z's violation of the contract, the AD awarded Dr. Stern $286,503 in lost income (or compensatory damages). 

That's a whole lot of toothbrushes.

For a copy of the Appellate Division's decision in Dental Health Assoc. v. Zangeneh, please click on the following link: http://www.nycourts.gov/reporter/3dseries/2006/2006_08726.htm