Pharmacy Feud: Local Pharmacist Faces Business Ban

A pharmacist opened a pharmacy in the same commercial building as their previous place of work. However, after a brief taste of happiness, the court ordered a business ban.

Last month, the Ulsan District Court accepted a request from a pharmacy owner to prohibit the pharmacist from operating their new pharmacy.

It turned out that the pharmacist had worked part-time at the plaintiff’s pharmacy for nearly two years and resigned to open their own pharmacy in January.

However, the issue was that it was located in the same building.

The plaintiff argued that the pharmacist used the drug list and sales status learned while working at the pharmacy to open their own pharmacy, which could lead to a decrease in the plaintiff’s sales.

The plaintiff had been conducting business based on the type, quantity, and unit price of drugs prescribed by a specific clinic located in the same building. Moreover, the pharmacist’s pharmacy was even closer to the clinic.

The court determined that the pharmacist had acquired the trade secrets from the plaintiff and ruled that the pharmacist opening a pharmacy was unfair and against good customs and social order.

In the pharmaceutical industry, the prohibition of competitive transaction lawsuit cases occurs frequently. The prohibition of competitive transactions forbids a person with a certain relationship with a specific merchant (commercial employee, transferor of business) from engaging in competitive activities with the merchant’s business.

A similar situation occurred in 2018 when a fraudulent pharmacist was ordered to close their pharmacy and pay compensation of $21,000 after opening a new pharmacy nearby and transferring his previous pharmacy to another pharmacist in Gangwon Province.

The court ordered the fraudulent pharmacist to close the newly opened pharmacy and prohibited them from operating a pharmacy in the same area until November 2025.

There are similar cases where a lawsuit is filed against a new business of the same type in the same commercial building, however, the lawsuit is lost.

Last year, BGF Retail, which operates the convenience store CU, filed a civil lawsuit against a retailer selling ice cream in the same building but lost the case.

BGF Retail had been operating a convenience store in an apartment complex in Yanyang City since October 2018, but in 2022, a self-service ice cream shop run by Mr. Kim moved in on the same floor.

BGF Retail filed a lawsuit demanding compensation of approximately $15,600 for damages incurred after the opening of the sales outlet, which was based on a lease agreement that stated a business of the same type already established and operating cannot operate.

However, the court dismissed all claims, stating, “There are no guaranteed rights for BGF Retail to operate such a business exclusively within the case involving the premises in question.”