No. 97,495
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
WICHITA CLINIC, P.A.,
Appellant,
v.
MICHELLE M. LOUIS, D.O.,
Appellee.
SYLLABUS BY THE COURT
1. In determining the reasonableness of a covenant not to compete, four factors are generally considered: (1) whether the covenant protects a legitimate business interest of the employer, (2) whether the covenant creates an undue burden on the employee, (3) whether the covenant is injurious to the public welfare, and (4) whether the time and territorial limitations contained in the covenant are reasonable. The determination of reasonableness is made on the particular facts and circumstances of each case. Further, a covenant not to compete cannot be enforced unless it is supported by valid consideration and it is merely ancillary to the main purpose of a lawful contract.
2. Contracting parties can stipulate to a set amount of damages for breach of contract so long as the provision is liquidated damages and not a penalty.
3. It is the duty of courts to sustain the legality of contracts in whole or in part when fairly entered into, if reasonably possible to do so, rather than to seek loopholes and technical legal grounds for defeating their intended purpose. It also has been stated that the paramount public policy is that freedom to contract is not to be interfered with lightly.
Appeal from Sedgwick District Court; WARREN M. WILBERT, judge. Opinion filed June 13, 2008. Reversed and remanded with directions.
Gary L. Ayers and Holly A. Dyer, of Foulston Siefkin LLP, of Wichita, for appellant.
Gary M. Austerman and Christopher A. McElgunn, of Klenda, Mitchell, Austerman & Zuercher, L.L.C., of Wichita, for appellee.
Before HILL, P.J., GREEN and STANDRIDGE, JJ.
GREEN, J.: Wichita Clinic, P.A., (the Clinic) appeals from a judgment of the trial court holding that its restrictive covenant in an employment agreement was unreasonable and unenforceable. Applying the factors in determining whether to enforce a restrictive covenant not to compete, we determine that the covenant should have been enforced. In addition, the Clinic appeals the trial court's ruling that it breached the employment agreement and that the breach precluded its claim for specific performance against Michelle M. Louis, D.O. We determine that although the Clinic breached the employment agreement, the breach did not preclude the Clinic's claim for specific performance. Accordingly, we reverse and remand for entry of judgment consistent with this opinion.
On July 10, 1991, the Clinic and Dr. Louis, entered into an employment agreement (the agreement). Dr. Louis was hired with a 2-year guaranteed salary of $80,000 annually, a $5,000 signing bonus, and additional compensation for student loan payments. The agreement set forth compensation, benefits, and division of expenses. Finally, the agreement contained a restrictive covenant. The agreement was drafted by the Clinic.
Dr. Louis terminated her employment with the Clinic at the end of August or September 2004, and began working with Lakepoint Family Physicians in September 2004. On December 28, 2004, the Clinic filed a petition for breach of the agreement because Dr. Louis had continued to practice in Sedgwick County and had failed to pay liquidated damages in violation of the restrictive covenant. The Clinic asked for specific performance of the agreement, an accounting of all of Dr. Louis' earnings, and consequential damages.
In her answer and counterclaim, Dr. Louis raised an affirmative defense: that because the agreement was vague and ambiguous, it must be construed against the Clinic. She also claimed that the restrictive covenant was unreasonable in scope and duration, created an undue burden, did not protect a legitimate business interest, and was contrary to public policy. She also argued that the Clinic was not entitled to damages and was barred by estoppel and waiver. In her counterclaim, Dr. Louis argued that the Clinic had breached the agreement by unilaterally modifying the agreement in 2003 and assessing the costs of physician assistants and other health care assistants to her. She alleged that she did not agree to the modification.
In its answer, the Clinic asserted that Dr. Louis' counterclaim was barred by accord and satisfaction, payment, estoppel and waiver, and failure to state a claim upon which relief could be granted.
On March 29, 2006, Dr. Louis moved for summary judgment. She argued that the agreement did not define "earnings" in the liquidated damages formula and asserted that the reasonable interpretation was gross pay or salary. Dr. Louis maintained that expanding the scope of meaning of "earnings" created an unenforceable penalty. Moreover, Dr. Louis asserted the noncompete provision was invalid because it only sought to prohibit ordinary competition and did not protect a legitimate business interest.
The Clinic moved for summary judgment on Dr. Louis' counterclaim and asserted "earnings" meant all earnings Dr. Louis collected after termination. Moreover, the Clinic argued that assessing liquidated damages based on all of Dr. Louis' earnings did not create an unenforceable penalty. The Clinic further asserted that the restrictive covenant protected its legitimate business interest in its patient referral system. Finally, the Clinic asserted that Dr. Louis' counterclaim failed because there was no breach of the contract under the plain language of the agreement.
Dr. Louis replied to the Clinic's summary judgment motion and raised essentially the same issues as in her summary judgment motion. She also objected to the Clinic's motion because she was not allowed 21 days to reply.
The trial court denied both the Clinic's summary judgment motion on Dr. Louis' counterclaim and Dr. Louis' summary judgment motion because the definition of "earnings" in the restrictive covenant could not be determined on the uncontroverted facts in the motions.
Before trial, Dr. Louis filed a motion in limine to prohibit introduction of parol evidence concerning the definition of "earnings" and to limit evidence concerning the parties' course of conduct to their interactions with each other. The court granted the motion in part and denied the motion in part.
During the bench trial, Dr. Louis moved for a directed verdict, arguing that the Clinic did not present evidence of the parties' intent when the agreement was signed. The court denied the motion and found there was some evidence showing that Dr. Louis had an appreciation of the meaning of the restrictive covenant. After Dr. Louis rested, the Clinic moved for a directed verdict on Dr. Louis' breach of contract claim and asserted that Dr. Louis had failed to show that she had sustained damages because of the breach. The court denied the motion with respect to the breach. Moreover, the court determined that Dr. Louis had demonstrated changes in the overhead calculations in the way the supporting staff and other expenses were handled by the Clinic.
At the conclusion of the trial, the court denied the Clinic's request for specific performance and for an accounting of Dr. Louis' post-termination earnings. The court also held that Dr. Louis was estopped from claiming that the Clinic had breached the agreement. In short, the court made seven specific findings: (1) that the agreement must be strictly construed against the Clinic; (2) that the restrictive covenant was not injurious to the public welfare; (3) that the territorial restriction was reasonable; (4) that the covenant did not protect a legitimate business interest; (5) that the covenant's time restriction created an undue burden and was unreasonable; (6) that because the liquidated damages provision in the covenant was intended to prevent ordinary competition, it was unreasonable and unenforceable; and (7) that although the Clinic breached the agreement, Dr. Louis did not prove actual damages.
Did the Trial Court Err in Finding the Restrictive Covenant Was Unenforceable?
The Clinic argues that the trial court erroneously determined that the employment agreement, including the restrictive covenant, was unreasonable and unenforceable. The Clinic asserts that Kansas has long recognized the validity of restrictive covenants in the physician practice context. See Idbeis v. Wichita Surgical Specialists, P.A., 279 Kan. 755, 775, 112 P.3d 81 (2005); Weber v. Tillman, 259 Kan. 457, 465, 469, 475, 913 P.2d 84 (1996); Foltz v. Struxness, 168 Kan. 714, 721, 215 P.2d 133 (1950); Graham v. Cirocco, 31 Kan. App. 2d 563, 572, 69 P.3d 194, rev. denied 276 Kan. 968 (2003).
Contracts should be presumed legal, and the party challenging the contract has the burden to prove it is illegal. Kansas Gas & Electric Co. v. Will Investments, Inc., 261 Kan. 125, 129, 928 P.2d 73 (1996). Courts have the duty to sustain the legality of a contract in whole or in part when the contract was fairly entered into and it is reasonably possible to do so, rather than seeking loopholes and technical legal grounds for defeating the contract's intended purpose. The paramount public policy is that freedom of contract should not be interfered with lightly. Idbeis, 279 Kan. at 770; Miller v. Foulston, Siefkin, Powers & Eberhardt, 246 Kan. 450, 462-63, 790 P.2d 404 (1990). Additionally, parties have wide discretion in fixing the terms of employment contracts, and when the contract is not illegal or unreasonable, it should be honored and enforced by the courts. Weinzirl v. The Wells Group, Inc., 234 Kan. 1016, 1019, 677 P.2d 1004 (1984); see also Augusta Medical Complex, Inc. v. Blue Cross, 227 Kan. 469, 475, 608 P.2d 890 (1980) (competent parties can contract on their own terms provided the contract is not illegal or contrary to public policy; absent fraud, mistake, or duress, the parties are bound by its terms).
The interpretation and legal effect of a written contract are matters of law over which this court has unlimited review. Conner v. Occidental Fire & Cas. Co., 281 Kan. 875, 881, 135 P.3d 1230 (2006). This court may construe a written contract and determine its legal effect, regardless of the trial court's construction. Unrau v. Kidron Bethel Retirement Services, Inc., 271 Kan. 743, 763, 27 P.3d 1 (2001). Nevertheless, if the trial court has made findings of fact and conclusions of law, this court determines whether the factual findings are supported by substantial competent evidence and whether those findings supported the conclusions of law. This court has unlimited review of the conclusions of law. LSF Franchise REO I v. Emporia Restaurants, Inc., 283 Kan. 13, 19, 152 P.3d 34 (2007). Substantial evidence possesses both relevance and substance, and it provides a substantial basis of fact from which the issues can reasonably be determined. Evenson Trucking Co. v. Aranda, 280 Kan. 821, 836, 127 P.3d 292 (2006).
The primary rule of contract interpretation is to ascertain the parties' intent. If the terms of the contract are clear, the parties' intent should be determined from the language of the contract itself without applying the rules of construction. Anderson v. Dillard's Inc., 283 Kan. 432, 436, 153 P.3d 550 (2007). Moreover, interpretation of contractual provisions should not be reached merely by isolating one particular sentence or provision, but the entire instrument should be construed and considered by its four corners. "The law favors reasonable interpretations, and results which vitiate the purpose of the terms of the agreement to an absurdity should be avoided. [Citation omitted.]" Johnson County Bank v. Ross, 28 Kan. App. 2d 8, 10-11, 13 P.3d 351 (2000).
A. Necessary Factors for Enforcement of a Restrictive Covenant
Our Supreme Court recently considered the subject of restrictive covenants in Idbeis, 279 Kan. at 762-63. Citing Weber v. Tillman, the Idbeis court set out four factors to consider in determining whether to enforce a restrictive covenant not to compete:
"'(1) Does the covenant protect a legitimate business interest of the employer? (2) Does the covenant create an undue burden on the employee? (3) Is the covenant injurious to the public welfare? (4) Are the time and territorial limitations contained in the covenant reasonable? The determination of reasonableness is made on the particular facts and circumstances of each case.' [Citation omitted.]" 279 Kan. at 763.
Besides these four factors, a restrictive covenant must be supported by valid consideration. Puritan-Bennett Corp. v. Richter, 8 Kan. App. 2d 311, 313, 657 P.2d 589 (1983). Moreover, a restrictive covenant must be ancillary to the contract. Weber, 259 Kan. at 462.
Here, there is no dispute that the restrictive covenant in the employment agreement between Dr. Louis and the Clinic was supported by adequate consideration. Dr. Louis, under the written employment agreement, promised to furnish medical services for the Clinic. Moreover, the Clinic promised to pay Dr. Louis a guaranteed salary of $80,000 annually, plus other benefits, for a period of 2 years. "It is a general rule that a promise by one party is a sufficient consideration for a promise or an act of another. It is the promise and not the performance thereof that constitutes the consideration." Shunga Plaza, Inc. v. American Employers' Ins. Co., 204 Kan. 790, 794, 465 P.2d 987 (1970). Moreover, Dr. Louis' continued employment by the Clinic during a 13-year period constitutes sufficient consideration to support the restrictive covenant.
In addition, the restrictive covenant was ancillary to the employment contract. The Clinic agreed to employ Dr. Louis in exchange for the restrictive covenant. As a result, the restrictive covenant was ancillary to the written contract of employment.
The trial court determined that the territorial limit of Sedgwick County was reasonable and that the provision was not injurious to the public for the following reasons: (1) that there were a number of family practice physicians; (2) that the Clinic would have absorbed Dr. Louis' patients, and (3) that the patients were not prevented from having quality medical care. The trial court, however, determined that the restrictive covenant did not protect a legitimate business interest. In addition, the court determined that the 3-year time restriction was unreasonable because it created an undue burden on Dr. Louis. Finally, the court determined that the liquidated damages provision had no reasonable basis other than to avoid ordinary competition. Consequently, the court determined that the restrictive covenant was unreasonable and unenforceable.
The noncompetition and liquidated damages clause of the restrictive covenant reads as follows:
"Upon termination of this Agreement, DOCTOR agrees that he/she will not, for a period of three (3) years thereafter, directly or indirectly engage in the practice of DOCTOR's profession in Sedgwick County, Kansas. DOCTOR further agrees that if DOCTOR should leave the employment of the CLINIC for any reason and continue the practice of his/her profession in Sedgwick County, Kansas, during said three year period DOCTOR shall pay the CLINIC, as liquidated damages and not as a penalty, 25% of all earnings collected from such practice during such period; provided, however, that CLINIC shall waive any claim for liquidated damages for that part of the earning collected in competition with CLINIC that is not in excess of Ten Thousand Dollars ($10,000) a year (or an amount annually that is equal to fifteen percent (15%) of the gross income paid DOCTOR in the last full year of his/her employment with CLINIC, whichever is more) if the separation from employment occurs after DOCTOR has reached sixty-two years (62) years of age. The parties agree that during said three-year period the CLINIC shall have the right and opportunity to audit or cause to be audited the DOCTOR's books and records at reasonable times and upon reasonable notice. The CLINIC shall pay for the audit by a certified public accountant of the CLINIC's choice; provided, however, that if such audit should uncover a variance in gross earnings in the DOCTOR's favor of two percent or more, the DOCTOR shall pay the reasonable costs of such audit."
To determine whether this covenant was reasonable and enforceable, we must consider the remaining four requirements for enforcement of a restrictive covenant.
1. Did the restrictive covenant protect a legitimate business interest of the Clinic?
The Clinic argues that the restrictive covenant protects its interest in preserving patient contacts, preventing loss of revenue generated by Dr. Louis, preventing unjust enrichment of Dr. Louis after investing in the establishment of her practice, and preventing losses incurred in recruiting a new physician and assisting the physician in establishing a practice.
In Weber, our Supreme Court determined that "only a legitimate business interest may be protected by a noncompetition covenant. If the sole purpose is to avoid ordinary competition, it is unreasonable and unenforceable. [Citations omitted.]" 259 Kan. at 462. Our Supreme Court has recognized that an employer has a legitimate business interest to protect in the following areas: customer contacts, special training of employees, trade secrets, confidential business information, loss of clients, goodwill, reputation, referral sources, and preserving contact with clients. 259 Kan. at 467; but see Allen, Gibb & Houlik v. Ristow, 32 Kan. App. 2d 1051, 1058, 94 P.3d 724 (2004) (this court determined employees take knowledge and skills acquired on the job with them when they leave, and those skills are not protectable so long as the employee does not take anything that belongs to the employer). Relying on Axtell Clinic v. Cranston, No. 56,745, unpublished opinion filed June 20, 1985, slip op. at 10, the Clinic contends that legitimate interests also include encouraging and enforcing employee loyalty. In Idbeis, the court determined that referral services were a legitimate business interest and can be protected by a restrictive covenant because relationships developed by an employee during employment belong to the employer, not the employee. 279 Kan. at 768-69; see also Eastern Distributing Co., Inc. v. Flynn, 222 Kan. 666, 671, 567 P.2d 1371 (1977) (customer contacts are protectable business interests); Caring Hearts Personal Home Services v. Hobley, 35 Kan. App. 2d 345, 354, 130 P.3d 1215 (2006) (protectable interest in customer contacts and relationships).
The Clinic contends that its patient base was the foundation for the liquidated damages provision and argues that Dr. Louis was more likely to take her patients with her if she continued to work in Sedgwick County because she was a family practice physician. The Clinic asserts that Kansas courts have recognized that more transient patient bases, such as those for colorectal and heart surgeons, were entitled to protection. Consequently, the loss of family practice patients had even a more legitimate business interest than in the previously mentioned specialties. The Clinic also contends that Dr. Louis' continued practice in Sedgwick County created an immediate influence on its revenues and collections due to loss of patients and revenue generated from those patients. Moreover, the Clinic maintains that Dr. Louis had received patients from the referral system and had made referrals to other Clinic doctors. The Clinic alleges that the revenue loss created a burden to pay its overhead–approximately 50% of Dr. Louis' net production went to overhead.
Furthermore, the Clinic contends that it is protecting its investment in establishing Dr. Louis' practice because she benefitted from starting her practice with a large physician group. The Clinic notes that Dr. Louis' use of its goodwill, reputation, and referral system to build her practice and asserts that part of the investment was the initial salary guarantee, signing bonus, student loan payments, patient referrals, and management of administrative matters and overhead. Finally, the Clinic asserts that it had a protectable interest in recouping the costs of recruiting a replacement physician and contends that the signing bonuses and student loan payments were related to the amount of liquidated damages Dr. Louis was required to pay.
The Clinic also maintains that its claims under the restrictive covenant have been upheld in Wichita Clinic v. Columbia/HCA Healthcare Corp., 45 F. Supp. 2d 1164, 1182 (D. Kan. 1999). In that case, the court considered the same restrictive covenant as in this case when Wesley Medical Center (Wesley) hired 13 primary care physicians from the Clinic in 1996. The court, in upholding the restrictive covenant, stated:
"The doctors understood that under their employment contracts if they left the employment of Wichita Clinic, they could either refrain from practicing in Sedgwick County for three years, or pay 25% of their earnings over three years as liquidated damages (15% in the case of two of the physicians)." 45 F. Supp. 2d at 1182-83.
Wesley agreed to pay the Clinic the liquidated damages of the doctors. 45 F. Supp. 2d at 1182. The court further held that the restrictive covenant was not void against public policy, was limited in geographical scope and duration, and protected the Clinic's investment in establishing the doctors' practices. Specifically, the court stated that "the provisions can be understood as fairly protecting the investment of the Clinic in helping to establish the physician's practice. [Citation omitted.]" 45 F. Supp. 2d at 1203.
Nevertheless, Dr. Louis argues that the Clinic's evidence related only to the alleged affect on the Clinic when physicians leave the Clinic, not when physicians compete against the Clinic. She also asserts that the Clinic did not establish the quantifiable effect of her leaving, but only established the general costs, that is, recruiting and hiring costs, when any physician leaves. Finally, Dr. Louis contends that the restrictive covenant was not intended to protect a business interest, but was intended to prohibit physicians from leaving the Clinic.
During the trial, Frank Cordon, the Clinic's director of finance, testified about the purpose of the restrictive covenant:
"The non-compete was instituted to protect the Wichita Clinic from doctors leaving the organization, staying in our market area or our competitive area and taking a patient base with them that the Wichita Clinic had helped them to establish, and the liquidated damages provision was to compensate the Wichita Clinic for that loss and to help us continue to operate and to offset the overhead that was ongoing after the doctor left."
Moreover, Cordon stated that the liquidated damages provision was to compensate the Clinic for money expended for recruiting a new physician, including signing bonuses and student loan payments, and for overhead expenses including rent, personnel, supplies, and operating expenses.
As for patient referrals, Cordon stated, as a matter of benefitting the Clinic's owners or stockholders, referring patients to Clinic physicians was encouraged. Cordon testified that the Clinic did not have a policy dictating to whom a physician could refer a patient and stated that he was unaware of a policy prohibiting a physician from referring patients to outside physicians. Nevertheless, Cordon stated, as set out in the employee handbook, managed care referrals were to be made to the Clinic physicians; the Patient Care Committee then would determine whether an outside referral was necessary for the patient's care and could authorize such a referral.
In Weber, our Supreme Court stated that the noncompetition covenant "was designed to protect [Dr. Weber's] practice and the value of goodwill developed over 17 years. These are recognized protected interests." 259 Kan. at 468; see also Foltz v. Struxness, 168 Kan. 714, 721, 215 P.2d 133 (1950) (involving a factually similar situation). Based on the cases previously cited, the Clinic had a legitimate business interest in its referral system, patient base, and goodwill. See Weber, 259 Kan. at 467-68; see also Idbeis, 279 Kan. at 770 (employer had a legitimate business interest in the referral sources).
2. Was the restrictive covenant reasonably limited in time, place, and activities?
The Clinic asserts that the 3-year time restriction in the restrictive covenant was reasonable. Moreover, the Clinic contends that the trial court erroneously determined that time restraints longer than 2 years were unreasonable. See Idbeis, 279 Kan. at 758, 775 (the court upheld a noncompetition clause prohibiting practice for 2 years and a liquidated damages clause requiring five annual payments for breach of the noncompete clause); Varney Business Services, Inc. v. Pottroff, 275 Kan. 20, 23, 59 P.3d 1003 (2002) (the court upheld a provision requiring an employee who left the firm to compensate the firm for those clients the employee provided services for in the subsequent 5 years); Foltz, 168 Kan. at 716-17, 721 (the court upheld a noncompetition provision requiring the employee not to practice medicine within 100 miles [reduced to a radius of 5 miles] of the employer for 10 years from the date the agreement was signed; when the employee terminated, over 8 years remained on the covenant); Graham, 31 Kan. App. 2d at 572 (the court upheld a 2-year time limitation); Wichita Clinic v. Columbia/HCA Health Care Corp., 45 F. Supp. 2d 1164, 1182-83, 1203 (1999) (the same covenant as in this case was upheld).
Here, the trial court stated that the 3-year period was unreasonable under Graham. The trial court determined that "a two-year period is common in Kansas for non-competition clauses, and that contract [in Graham] has a non-competition clause of two years." The court further stated that there was no legitimate business interest in expanding the noncompetition clause into the third year because Dr. Louis was only given a 2-year guaranteed salary.
The Clinic, however, argues that the trial court did not focus on the covenant itself, but again focused on the damages provision. Furthermore, the Clinic asserts that consideration must be given to the time and costs to recruit a new physician and to get the new physician to full productivity. Consequently, the Clinic asserts that the 3-year time restriction is a reasonable amount of time.
Furthermore, the Clinic contends that the trial court misread and misinterpreted the court's statement in Graham v. Cirocco, 31 Kan. App. 2d 563, 570, 69 P.3d 194, rev. denied 276 Kan. 968 (2003). The Clinic asserts that the Graham court did not specifically state that reasonable clauses were only 2 years or less. In Graham, this court stated: "We are not bothered by this covenant's 2-year restriction. Such a time period is common in Kansas noncompetition clause cases . . . ." 31 Kan. App. 2d at 570-71. This court further determined that there was a legitimate business interest in the patients, but the geographical limitation was unreasonable. 31 Kan. App. 2d at 569-72.
The trial court, however, misinterpreted the Graham court's statement. This court stated that 2 years was common for noncompetition clauses. Nevertheless, this court did not state that a restrictive covenant that ran beyond 2 years would be considered unreasonable. We determine that the 3-year time restriction for the noncompetition provision of the restrictive covenant was reasonable.
In addition, the territorial restriction prohibiting Dr. Louis from practicing in Sedgwick County for 3 years does not seem unreasonable. The protection given by the covenant was only coextensive with the area from which the Clinic drew most of its patients. As a result, the protection extended only to the periphery of the area covered by the Clinic's business. In Foltz, for example, the court approved a reduction in a territorial restriction from 100 miles from the city of Hutchinson to a radius of 5 miles from the city. 168 Kan. at 719. Further, in Weber, the court upheld a 30-mile radius restriction from a clinic in Hays. 259 Kan. at 465. Finally, in Eastern Distributing Co., Inc., the court approved a reduction in a territorial restriction from a 50-mile radius from the sales territory to four specific counties. 222 Kan. at 677. In short, there is no factual basis for finding that the time and territory restrictions of the restrictive covenant are unreasonable.
3. Did the restrictive covenant create an undue burden on Dr. Louis?
The trial court determined that the restrictive covenant unduly burdened Dr. Louis because the 3-year term was too long and most restrictive covenants were only for 2 years. Moreover, the court determined that Louis' 2-year guaranteed salary was the amount of her overhead contribution.
Nevertheless, as we determined in the previous section, the Clinic's restrictive covenant was reasonably limited as to time and place. Moreover, as the Clinic points out, the restrictive covenant did not entirely prevent Dr. Louis from practicing as a family practice physician. For instance, the covenant gave Dr. Louis the option of practicing in the area and paying liquidated damages. Or, she could refrain from practicing in Sedgwick County until the noncompetition agreement had expired. Weber, 259 Kan. at 465 (doctor could practice dermatology in Hays as soon as the noncompetition agreement expired). The restrictive covenant does not prevent Dr. Louis from practicing medicine anywhere–only in Sedgwick County for 3 years. Based on these facts, we determine that the restrictive covenant did not impose an undue burden on Dr. Louis.
4. Did the restrictive covenant injure the public?
The trial court determined that the restrictive covenant did not prevent Dr. Louis' patients from receiving quality medical care because she could not practice in Sedgwick County. As a result, the trial court determined that Dr. Louis' prohibition from practicing in Sedgwick County would not be injurious to the public welfare. Dr. Louis has not cross-appealed and is not complaining concerning this finding. We determine that the trial court's finding is supported by the record. See Foltz, 168 Kan. at 722 (enforced a covenant not to compete based upon the trial court's finding "'that the City of Hutchinson is no more in need of further doctors and surgeons than many other communities.'").
5. Was the liquidated damages provision contained in the restrictive covenant a penalty?
The Clinic asserts that the liquidated damages provision was not an unen