- 25 -
1994, by which time 36 UHMG physicians had done so. Accordingly,
the SWMG shareholder physicians sold their practices pursuant to
the APAs and became employees of SWMG pursuant to the PEAs, on
November 1, 1994.
The PEAs between SWMG and the affiliating physicians,
including petitioners, were substantially identical except for
the compensation and benefit amounts to be paid to the physicians
under the agreements, and were effective November 1, 1994, for a
term of 1 year, renewable annually. Each petitioner agreed to
practice medicine full time and exclusively for SWMG (except for
reasonable amounts of unpaid volunteer work) and to provide
medical services solely to SMF and its group practice patients.
SWMG was given "the exclusive right to allocate patients among
its employees with due regard to the source of the patients, the
patient's preference with respect to choice of physicians, the
specialty and skills of its employees, and their workload";
however, SMF was given "final authority over acceptance or
refusal of any patient". The PEAs provided that persons treated
by physicians pursuant to the agreement were patients of SMF and
that SMF was solely entitled to all fees for the services
rendered by the physicians. Upon the termination of a
physician's employment under the PEA, the physician was not
entitled to take or use any confidential or proprietary
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