Considerations in re: Memorandum from Acting Chairman 07-06-94

               1. The memorandum incorporates by reference the Departmental
          Incentive Plan October 1983. A copy of this plan, if it exists in
          writing, should be reviewed prior to taking any legal position
          concerning the memorandum in issue.

               2. The memorandum purports to restate and to implement a de-
          partmental policy concerning professional income by the Depart-
          ment of Medicine of New England Medical Center.

               3. The memorandum demands from each member of the Department
          of Medicine an affidavit describing the "professional contracts
          with ... outside agencies for ongoing consultation that generates
          consultation fees, stock options, or stock in a company," includ-
          ing the name of the organization, the contract period, the esti-
          mated income (1993/1994) and the description of services.  Alter-
          natively it demands an affidavit to the effect that the signatory
          is "not involved in professional contracts ...  with outside
          agencies."

               4. Attached to the primary memorandum and incorporated in it
          by refernce is a "Report of the Committee on Outside Income, dat-
          ed February 17, 1984, (Revised by Department Executive Committee,
          September 12, 1984.) The stated purpose of the report is to rec-
          ommend a departmental policy regarding professional income.

               5. The primary memorandum explicity adopts the Report of the
          Committee to the effect that "all new contracts ... must be dis-
          closed to and approved by the Chairman before they are signed.
          Individual members of Pratt are not empowered to sign contracts
          without Departmental concordance.

               6. The reasonable inference from the wording of the affi-
          davit are: a) that the Chairman maintains no records of the con-
          tracts he allows or disallows, or b) that the Report of 2/17/84
          has not been consistently implemented, and c) that salaries are
          determined in part on the basis of unverified estimated income.
          Most likely all three, a, b, and c are valid.

               7. The clear implication of both the primary memorandum and
          the 2/16/84 report is a) that contracts which do not entail con-
          sideration in money or money's worth to the Pratt employee are
          excluded from their strictures, as are contracts made for the
          benefit Pratt employees by third parties.

               8. There is an ambiguity, if not indeed contradiction be-
          tween paragraphs 2(E) and 3(C) of the 2/17/84 report, in that
          2(E) purports to include all contracts which generate consulta-
          tion fees, whereas 3(C) excludes income from non-medical business
          ventures.  Since the term "non-medical business venture" is in-
          herently ambiguous, the failure to define it makes the primary
          memorandum meaningless except as an illegal instrument of intimi-
          dation, extortion and fraud.









                                       -2-


                                    Conclusion

               The policy alluded to in the primary memorandum has not been
          enforced and is in fact unenforcable.  It could probably not
          withstand legal challenge: a) because of the absolute, unfettered
          discretion of the Chairman to deprive members of the Department
          of their livelihood, b) because of the absence of all records and
          all standards by which contracts are approved or disapproved.

               There is obviously a large body of case law on the rights of
          employers to restrict the activities of their employees which law
          I would want to review prior to taking a position.

               My preliminary opinion is that an employee who was dis-
          charged or disciplined for violation of the Memorandum in ques-
          tion could bring a lawsuit whose defense costs would deprive he
          Pratt Diagnostic Clinic of discretionary income for years to
          come, even if the lawsuit were ultimately unsuccessful.



                                Recommendations

               1. Avoid confrontation. Do not express any opinion on the
          validity of the memorandum or the required affidavit.  Don't of-
          fer to be their lawyer.

               2. Make whatever contracts seem advantageous to you but re-
          quire all contracts which you sign to include the statement:
          "provided that no services shall be required, and no payments
          shall be made, except in the furtherance of a non-medical busi-
          ness ventures."

               3. Forget about the Memorandum and Report of 2/17/84 until
          you are summoned to defend yourself against a violation. You then
          have the options: a) say you're sorry, buy your way out, give
          them the money that they want, and they won't fire you.  b) give
          them the big-law firm treatment, after which you will also keep
          your job, but nobody will speak to you in the elevators for the
          ensuing ten years, c) get another job, d) sell 10 percent of your
          stock options to buy an estate in Concord and retire.