U.S. Nursing Corp. v. Saint Joseph Medical Center
United States Court of Appeals for the Seventh Circuit
39 F.3d 790 (1994)
U.S. Nursing Corp. (plaintiff) contracted to supply nurses to Saint Joseph Medical Center (defendant), entitling U.S. Nursing to seven days' pay if the hospital terminated without proper notice, but U.S. Nursing began performing under the contract before obtaining the license Illinois law required for nurse-staffing agencies. After the state denied U.S. Nursing a license for beginning work unlicensed and failing to properly vet some nurses' references, it notified Saint Joseph of the violation; the hospital terminated the contract and paid for services already rendered, but U.S. Nursing sued for the additional seven days' termination pay, and the district court found the contract unenforceable on public policy grounds.
Whether a contract to do an act in violation of a licensing requirement is unenforceable on public policy grounds if (1) the requirement has a regulatory purpose and (2) the interest in enforcing the promise is clearly outweighed by the public policy behind the requirement.