Exclusive contract

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An exclusive contract is one that grants rights to one person or group and prohibits granting similar rights to others. An example is a hospital that only allows one group of anesthesiologists to work at the hospital and denies access to the hospital by all other anesthesiologists.[1]

The U.S. Supreme Court rejected a claim that exclusive contracts by physicians were automatically ("per se") illegal under antitrust laws. Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466 U.S. 2 (1984). In that case now-Judge Frank Easterbook successfully argued that a showing of a negative impact on the market is required before declaring an exclusive contract to be per se illegal. In that case 70 percent of the local patients entered different hospitals, making it doubtful that Jefferson Parish Hospital hurt the overall local market by having an exclusive contract with anesthesiologists.

One decision did hold that an exclusive contract with a group of anesthesiologists violated the antitrust laws. In Oltz v. St. Peter's Community Hosp., 861 F.2d 1440 (9th Cir. 1988), the Ninth Circuit upheld a judgment against the hospital for allowing a group of anesthesiologists to coerce it into abandoning a contract with a nurse anesthetist, who charged lower fees, and enter into an exclusive contract with the group.


References

  1. http://www.econ.ucsb.edu/papers/wp14-97.pdf
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