26 Ontario Dentist • November 2013

Michael CarabashBA JD MBAPractice Management

Information on the businessmanagement of a dental office.business

ut of the blue, one morn-ing, your popular young as-sociate gives you notice that

she’s leaving to set up her own prac-tice — across the street. And yourlong-term front-desk staff person isgoing with her. She also mentionsthat she’s taking a list of the patients

When Your Associate LeavesIf you don’t have a contract, you may be vulnerable.Here’s how to protect yourself – and your practice.

she had treated exclusively and willbe notifying them of her new locationby letter, phone and general newspa-per advertisement. That is when youremember you don’t have a writtenassociate agreement in place. Your jawdrops. Where do you stand legally?Initially, you might feel confident

that the law is on your side, evenwithout a contract. You believe thatyour associate has a fiduciary (i.e. spe-cial trust) relationship with you thatwould require her to put your inter-ests before her own and would pre-vent her from soliciting patients for atleast a reasonable period of time. Youmay think that patients — even thosetreated by your associate — belong toyou and your practice, and that pa-tient lists are confidential informa-tion, which your associate cannotmisuse or steal. You may also believethat enticing employees to leave —particularly those who know and in-teract with your patients on a routinebasis — is illegal.But if you believe these things, you

would be wrong! Canadian courtshave consistently rejected the argu-ment that a fiduciary relationship ex-ists between principal and associatedentists. Courts have held that den-tists do not have a proprietary right intheir patients, who are free to choose

and change their dentists. Courtshave found that departing dentists arefree to compete, can advertise theirnew location generally (that is, notspecifically to a particular person),and can notify the patients whomthey treated in an exclusive capacitywhile with another dentist, of theirnew location. The departing dentist isalso entitled to the records of thesepatients if he or she is continuing totreat them. Finally, employees canleave for any reason, as long as theyprovide their employer with propernotice and do no harm (for examplethrough fraud, defamation or theft).Given these conditions, you mayhave little or no legal recourse againstyour associate.What follows is a summary of some

of the key decisions respecting thisarea of law.In Goodman v. Newman, [1986]

O.J. No. 922, Dr. Howard Newman as-sociated for Dr. Dr. Paul Goodman forsome 10 years without any writtencontract. During that time, Dr. New-man kept a list of the names and con-tact information of the patients hehad treated. He ultimately left to setup his own practice and took the listwith him. Dr. Goodman sued to re-trieve the list and prevent Dr. New-man from contacting or treating

O

November 2013 • Ontario Dentist 27

Practice Management

those patients. The Supreme Court of Ontario dismissedthe case for a number of reasons. First, the Court held thatdentists do not have proprietary rights in patients; patientsare free to seek dental services where they chose. Second,the patient list was not considered confidential informa-tion given that it only contained the names and contactinformation of patients whom Dr. Newman had treated ex-clusively; as such, Dr. Newman had not breached any du-ties of confidentiality. Finally, the Court cited and agreedwith a Dispatch article (December 1985) which stated that“it is not improper for a former associate to send an an-nouncement card to those patients to whom he was theprincipal dentist — unless the associateship agreement orcontract states to the contrary.”In Bacher v. Obar, [1989], O.J. No. 1392 (affirmed by

the Court of Appeal in [1993] O.J. No. 3578), Dr. MarvinObar associated for Dr. Jay Bacher without any written con-tract for about four and a half years. Dr. Obar eventuallyleft, set up shop across the street and continued to treat anypatients who sought his services, including those he hadtreated at Dr. Bacher’s practice. Dr. Bacher sued, but theSupreme Court of Ontario sided with Dr. Obar. The Courtheld that Dr. Obar “was entitled to treat or continue to treatany patient who sought his services including those he hadtreated while with Dr. Bacher.” The Court rejected the ideathat patients treated by Dr. Obar should be viewed as pa-tients of Dr. Bacher or his practice. The Court went on tosay: “Patients have a right to choose their dentist. They arenot property to be bought and sold like inventory. Eachdentist had the right to provide service to anyone who re-quested it.” On the issue of patient records, the Court heldthat Dr. Obar was entitled to obtain “the records of patientshe had treated who continued to require his services” andthat “Dr. Obar was entitled to inform his patients of hisnew location.” While the Court did not specifically recog-nize the existence of a fiduciary relationship, it did say thatDr. Obar and Dr. Bacher had an implied duty to act rea-sonably towards each other in conducting their affairs andhad a right to expect that, on termination, there would beco-operation to effect an orderly transition.In Kronick v. Lamarche, [1991] O.J. No. 907, Dr.

Joanne Lamarche purchased Dr. Moses Kronick’s dentalpractice. As part of the sale, Dr. Kronick worked as Dr.Lamarche’s associate for three years. Thereafter, Dr. Kronickleft to set up his own practice and took a patient list. Headvertised the move in a newspaper and handed out slipsof paper with his new contact information to patients whowished to carry on with him at the new location. His den-tal assistant also called his patients. While there had beena written agreement, it expired and did not govern the sit-uation. Dr. Lamarche sued for misuse and theft of confi-dential information and for breach of fiduciary obligation.

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28 Ontario Dentist • November 2013

Practice Management

The Ontario Court of Justice rejected these claims. TheCourt cited the tenet from Goodman v. Newman thatdentists do not have a proprietary right to their patients,who have freedom of choice. It was clear to the Court thatDr. Kronick’s long-time patients were going to follow him,irrespective of Dr. Lamarche’s actions. As for the newspa-per ads, slips of paper, and phone calls, the Court statedthat they were meant to inform patients that Dr. Kronickhad not retired but had moved; they did not constitute im-proper solicitation. Finally, the Court cited Bacher v.Obar and found that no fiduciary relationship existed be-tween Dr. Lamarche and Dr. Kronick.Although these cases are somewhat dated, they have

been cited and approved in recent Ontario cases involvingdentists and other professionals — such as Dangstorp v.Lefebvre [1992] S.J. No. 755 (dentist), Lodwig v. Mather,1995 A.J. No. 382 (dentist), Cressman, Foster HealthFacility Inc. v. Furniss [2006] O.J. No. 5594 (op-tometrist) and Loreto v. Little, [2010] O.J. No. 679(lawyer).Overall, irrespective of the business relationship dentists

have with each other, they should have agreements inplace to deal with issues such as non-competition, non-

solicitation, and ownership and confidentiality of patientrecords. This would help manage expectations and helpprevent costly and time-consuming litigation. If the den-tists in the cases cited above had had agreements, theycould have alleged breach of contract and the courts mayhave decided in their favour.

Be sure to include the following in yourAssociate Agreement:

� Term and termination

� Non-competition and non-solicitation

� Confidentiality and ownership of patient records and list

Michael Carabash, BA, JD, MBA is a partner at DMC Law, alaw firm specializing in dental matters. He may be contactedat 647-680-9530 or michael@dentistlawyers.ca.

This article is provided for educational purposes and does not consti-tute legal advice. For more information and advice, consult a lawyer.

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