Background
Southeastern Regional Physician Services, a subsidiary of Southeastern Regional Medical Center, operates primary and specialty care clinics in Robeson County. In 2021 and 2023, it hired Allison Scott and Chastity Benson—a licensed family nurse practitioner and a licensed nurse practitioner, respectively—each of whom signed Provider Employment Agreements as a condition of employment. Each agreement contained a one-year covenant not to compete. Scott’s covenant prohibited her from practicing “within Robeson County,” while Benson’s barred practice “within 35 miles” of any company clinic. Both covenants used the same operative language: the employees would not “engage in the practice of Medicine or provide services similar to those provided under this Agreement.” Both worked in the company’s cardiology and cardiovascular clinic.
In mid-2024, both defendants gave their contractually required ninety-days’ notice of resignation and were then hired by Southeastern Integrated Care, a primary care, mental health, and substance abuse treatment center. The employer filed suit in March 2025 alleging breach of the non-compete covenants. Defendants moved for judgment on the pleadings under Rule 12(c) of the North Carolina Rules of Civil Procedure, arguing the covenants were unenforceable as overbroad and contrary to public policy. The Robeson County Superior Court agreed and dismissed the complaint. The employer appealed.
The Court’s Holding
Affirmed (2–1). Writing for the majority, Judge Griffin applied de novo review and evaluated the five elements required for an enforceable non-compete under North Carolina law: writing, reasonableness of time and territory, integration into the employment contract, valuable consideration, and compliance with public policy. The court accepted that a one-year restriction and the geographic limits—Robeson County and 35 miles—were individually reasonable. But it found the covenants’ terms fatally overbroad. The prohibition on “engag[ing] in the practice of Medicine” barred the defendants from any work remotely related to medicine, not merely from competing in cardiovascular nursing. That absolute restriction imposed an undue hardship exceeding what the employer’s legitimate customer-contact interest could justify. The court also held the covenants void against public policy: the employer pleaded no specific trade secrets and offered only general allegations that patients followed the nurses to their new employer, which was legally insufficient.
On the blue-pencil question, the court declined to revise the covenants. North Carolina follows a strict blue-pencil doctrine, reaffirmed by the Supreme Court this year in Relation Ins., Inc. v. Pilot Risk Management Consulting, LLC, —— N.C. ——, 929 S.E.2d 893 (2026): courts may sever separable, divisible provisions, but they cannot surgically excise language within an integrated phrase. Here, striking “engage in the practice of Medicine or” from the operative clause would require exactly that kind of rewriting—not severance of a distinct covenant. The majority declined to do it. Chief Judge Dillon dissented, reasoning that the offending language was sufficiently separable to permit blue-penciling and that the public-policy question was not ripe for resolution on the pleadings alone.
Key Takeaways
- Non-compete terms in North Carolina must be narrowly tailored to the specific work the employee performed. A blanket prohibition on the “practice of Medicine” renders a covenant overbroad even when the time limit and geographic scope are individually reasonable.
- North Carolina’s strict blue-pencil doctrine does not allow courts to surgically excise overbroad language within a clause. Only truly separable and divisible covenants may be severed; if severance requires rewriting, the entire provision falls. Relation Ins., Inc. (NC 2026) reaffirmed this limit.
- The public-policy void argument against healthcare non-competes can succeed at the Rule 12(c) stage where the employer fails to plead specific misappropriated trade secrets and cannot show that prohibiting all medical practice is necessary to protect its customer relationships.
- A 2-1 split with a Chief Judge dissent signals that this area of NC law remains contested. The dissent’s blue-pencil analysis—focusing on whether offending language is severable within the same clause—may resurface in future appeals or NC Supreme Court review.
Why It Matters
For North Carolina healthcare employers—hospital systems, physician groups, and specialty clinics across the state—Scott is a caution against generic non-compete boilerplate. Covenants that bar employees from “the practice of Medicine” rather than from performing the specific specialty or role in which the employee actually worked are now clearly at risk of invalidation at the pleadings stage, before any discovery is conducted. Drafters should limit scope to the specific services performed and document the legitimate business interest being protected.
For plaintiffs’ employment counsel, the decision confirms that an employee facing a broad healthcare non-compete has a viable challenge under Rule 12(c) without waiting for trial. Robeson County’s status as a medically underserved area—the trial court took judicial notice that it is North Carolina’s largest and poorest county—provided additional public-policy traction that may be available in other contexts where enforcement would restrict access to scarce medical professionals. The case also draws a clear line from the Supreme Court’s 2026 Relation Ins. ruling: employers should not rely on the blue-pencil doctrine as a safety net for overreaching covenants.