Eisenhower Right to Object to Non-compete [Opinion]

Eisenhower is Right to Object to Non-compete Clause [Opinion]

In the last election, the voters in the Desert Health Care District approved the lease of Desert Regional Hospital by the District to Tenet Healthcare.  On December 31, 2024, the District filed a “Validation Action” with the Riverside County Superior Court.  The action seeks to have a Superior Court Judge hold that the lease and its terms are “valid”. Judgements in validation actions seek to eliminate future challenges to the matter that has been validated.

The lease contains a “non-compete” clause.  The clause includes complicated language preventing the District from making grants to health care organizations that compete with Desert Regional.  Make no mistake, the non-compete is aimed at a single health care provider – Eisenhower Health.

Eisenhower has filed an objection to the validation action.  Recent letters to The Desert Sun, including one from a La Quinta City Council Member, suggest that Eisenhower is wrong: 1) to object to the results of Measure AA which the voters approved by a large margin; 2) to attempt to sabotage the will of the people; 3) to waste money “that could be redirected to care for the underserved”.  All of these incendiary and misleading statements reflect a clear and obvious lack of understanding of the very specific issue – no other health care organization is prevented from obtaining grants from the District – only Eisenhower.

The heart of the issue has nothing to do with the passage of Measure AA, nothing to do with the claimed “waste of money that could be redirected”.  At the very heart of the issue is the non-compete clause. The clause that prevents Eisenhower Health from receiving grants funded by the District, a stipulation that many argue undermines the District’s broader mission to foster accessible and equitable healthcare for all residents. The clause has sparked a debate about the ethical use of public funds, especially given that these funds are derived not only from lease payments made by Tenet, but also from property taxes collected from property owners across the District’s original boundaries. Critics claim that such a restriction runs counter to the original purpose for which the District was established—to support a diverse range of healthcare providers for the betterment of community health.

The non-compete is wrong.  The District raises money to make grants that provide for the health and well-being of District residents.  Grant money that is largely funded by publicly raised property tax dollars.  It’s wrong to limit the way a public agency (the District) spends public money (your tax dollars and mine) for the stated goal of optimum health care for all residents of the District.

The District was created by the state Legislature for the purpose of providing direct health care services and also providing funding to organizations that operate medical facilities and services.  Logic dictates that the Legislature did not envision that the single most obvious provider of health care services in the Coachella Valley would be excluded from receiving grants from the District.

Recently, the Rancho Mirage City Council passed a resolution supporting Eisenhower’s objections to the District’s validation action.  The city does not object to the lease.  The city vigorously objects to the non-compete.

The court should validate the lease with the exception of the non-compete clause.  The District should do the right thing and follow its own Mission Statement “To achieve optimum health at all stages of life for all District residents”.  That Mission Statement does not end with the phrase “with the exception of Eisenhower Health”.