<PAGE>

                                                                    EXHIBIT 10.8

                             EMPLOYMENT AGREEMENT
                             --------------------

  This Employment Agreement ("Agreement") is made and entered into on this 9/th/
                              ---------
day of April, 2001, effective as of April 1, 2001 by and between AMERIPATH,
INC., a Delaware corporation (the "Company"), and JAMES C. NEW (hereinafter, the
                                   -------        ------------
"Executive").
 ---------

                                R E C I T A L S
                                - - - - - - - -

     A.   The Executive is currently employed by the Company as its Chairman and
Chief Executive Officer pursuant to a November 1, 2000 Memorandum outlining his
compensation and a Personnel Action Notice dated November 21, 2000 (the "Prior
                                                                         -----
Employment Agreement").
--------------------

     B.   Prior to entering into the Prior Employment Agreement, the Company
offered the Executive and the Executive accepted an Executive Retention
Agreement dated August 12, 1999 (the "Retention Agreement").

     C.   Prior to entering into the Executive Retention Agreement, the Company
entered into an Employment Agreement with the Executive dated October 24, 1995.

     D.   The Company and the Executive now wish to enter into this new
Agreement, which is intended to supercede and replace the Prior Employment
Agreement and the Retention Agreement in their entirety, to reflect the
Executive's position and duties, his compensation, and other terms and
conditions of his employment as Chairman and Chief Executive Officer of the
Company.  Upon execution of this Agreement by both the Executive and the
Company, the Prior Employment Agreement and the Retention Agreement shall
terminate and no longer have any force and effect.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the promises and mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Executive and the Company agree
as follows:

     1.   Recitals.  The foregoing recitals are true and correct and are
          --------
incorporated herein by this reference.

     2.   Employment.
          ----------

          2.1  Employment and Term.  During the Term of Employment, the Company
               -------------------
hereby agrees to employ the Executive and the Executive hereby agrees to serve
the Company on the terms and conditions set forth herein.

          2.2  Duties of Executive.  During the Term of Employment, the
               -------------------
Executive shall serve as the Chairman and Chief Executive Officer of the
Company, shall report directly to the Board of Directors of the Company, shall
faithfully and diligently perform all services as may be

                                      -1-
<PAGE>

assigned to him by the Board of Directors of the Company (the "Board"), and
shall exercise such power and authority as may from time to time be delegated to
him by the Board. The Executive shall devote his full time and attention to the
business and affairs of the Company, render such services to the best of his
ability, and use his reasonable best efforts to promote the interests of the
Company. The Executive shall comply with the Company's employment policies and
practices generally applicable to its officers and employees including, without
limitation, insider trading and confidentiality policies. Notwithstanding the
foregoing or any other provision of this Agreement, it shall not be a breach or
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, or (iii) manage personal
investments, so long as such activities do not interfere with or detract from
the performance of the Executive's responsibilities to the Company in accordance
with this Agreement.

     3.   Term of Employment.     The term of employment under this Agreement,
          ------------------
and the employment of the Executive hereunder (the "Term of Employment"), shall
                                                    ------------------
commence upon execution of this Agreement by both the Executive and the Company
and shall terminate upon the date on which the employment of the Executive is
terminated pursuant to and in accordance with Section 6 hereof (the "Expiration
                                                                     ----------
Date").
----

     4.   Compensation.
          ------------

          4.1  Base Salary.  The Executive shall receive a base salary at the
               -----------
annual rate of $425,000 (the "Base Salary") during the Term of Employment, with
                              ------------
such Base Salary payable in installments consistent with the Company's normal
payroll schedule, subject to applicable withholding and other taxes.  The Base
Salary shall be reviewed at least annually.

          4.2  Bonuses.
               -------

               a.  During the Term of Employment, for each calendar year during
the Term of Employment (the "Bonus Period"), the Board shall establish a bonus
pool from which the Executive shall be eligible to receive an annual bonus
potentially equal to fifty percent (50%) of the Executive's Base Salary (the
"Bonus Payment"), to be determined by the Board and based upon the satisfaction
 -------------
by the Executive and/or the Company of the goals (the "Goals"), to be
                                                       -----
established by the Company. Notwithstanding the foregoing, in the event that the
Goals are either exceeded or not fully achieved for a Bonus Period, the
Executive may be eligible to receive a Bonus Payment in an amount in excess of
or less than fifty percent (50%) of the Executive's Base Salary.

               b.  For the Bonus Period in which the Executive's employment with
the Company terminates for any reason other than by the Company for Cause under
Section 6.1 hereof, provided that the Executive has been continuously employed
with the Company for a minimum of six (6) months during such Bonus Period, the
Company shall pay the Executive a pro rata portion (based upon the period
beginning on the first day of the Bonus Period and ending on the date on which
the Executive's employment with the Company terminates) of the bonus
                                      -2-
<PAGE>


otherwise payable under Section 4.2 for the Bonus Period in which such
termination of employment occurs; provided, however, that (i) the Bonus Period
shall be deemed to end on the last day of the calendar quarter in which the
Executive's employment so terminates, and (ii) the business criteria used to
determine the bonus for this short Bonus Period shall be annualized and shall be
determined based upon audited financial information prepared in accordance with
generally accepted accounting principles, applied consistently with prior
periods, and reviewed and approved by the Compensation Committee of the Board.
The Incentive Compensation for this Bonus Period is sometimes hereinafter
referred to as the "Termination Year Bonus".
                    ----------------------

     5.   Expense Reimbursement and Other Benefits.
          ----------------------------------------

          5.1  Reimbursement of Expenses. Upon the submission of proper
               -------------------------
substantiation by the Executive, and subject to such rules and guidelines as the
Company may from time to time adopt with respect to the reimbursement of
expenses of executive personnel, the Company shall reimburse the Executive for
all reasonable expenses actually paid or incurred by the Executive during the
Term of Employment in the course of and pursuant to the business of the Company.
The Executive shall account to the Company in writing for all expenses for which
reimbursement is sought and shall supply to the Company copies of all relevant
invoices, receipts or other evidence reasonably requested by the Company.

          5.2  Compensation/Benefit Programs.  During the Term of Employment,
               -----------------------------
the Executive shall be entitled to participate in all medical, dental,
hospitalization, accidental death and dismemberment, disability, travel and life
insurance plans, and any and all other plans as are presently and hereinafter
offered by the Company to its executive personnel, including savings, pension,
profit-sharing and deferred compensation plans, subject to the general
eligibility and participation provisions set forth in such plans.  Furthermore,
the Company will continue to assume premium costs for the long-term disability
and life policies rolled over from Novacare up to a maximum of $7,000 per annum.

          5.3  Stock Options.  During the Term of Employment hereunder, and
               -------------
subject to the execution of any other applicable agreements, the Executive shall
be eligible on an annual basis to receive options (the "Stock Options") to
                                                        -------------
purchase common stock (the "Common Stock") of the Company, the amount to be
                            -------------
determined by the Board of Directors of the Company based upon the Executive's
performance and services rendered to the Company, and subject to the approval by
both the Compensation Committee and the Board at their regular annual review of
executive performance.  If and to the extent awarded, the Stock Options shall be
granted under (and therefore subject to all terms of) the Company's stock option
plan (the "Stock Option Plan") and pursuant to the terms of a certain stock
           -----------------
option agreement (the "Option Agreement") to be entered into by and between the
                       ----------------
Executive and the Company.  In addition, during the Term of Employment, the
Executive shall be eligible to be granted additional options under the Company's
Stock Option Plan.  The number, if any, of additional options and terms and
conditions thereof shall be determined by the Committee appointed pursuant to
the Stock Option Plan, or by the Board of Directors of the Company, in its
discretion and pursuant to the Stock Option Plan.  Notwithstanding any other
provision of this Agreement, Option Agreements

                                      -3-
<PAGE>

entered into by the Executive and the Company prior to the date of this
Agreement shall remain in full force and effect.

          5.4  Other Benefits.  The Executive shall accrue up to four (4) weeks
               --------------
of paid vacation each calendar year during the Term of Employment, to be taken
at such times as the Executive and the Company shall mutually determine and
provided that no vacation time shall significantly interfere with the duties
required to be rendered by the Executive hereunder.  Any accrued vacation time
not taken by Executive during any calendar year may be carried forward into any
succeeding calendar year. Notwithstanding the foregoing, in no event shall the
Executive's accrued vacation time exceed four (4) weeks at any point in time.
The Executive shall receive such additional benefits, if any, as the Board of
the Company shall from time to time determine.

     6.   Termination and/or Change of Control.
          ------------------------------------

          6.1  Termination for Cause.  The Company shall at all times have the
               ---------------------
right, upon written notice to the Executive, to terminate the Term of
Employment, for Cause as defined below.  For purposes of this Agreement, the
term "Cause" shall mean (i) an action or omission of the Executive which
      -----
constitutes a willful and material breach of, or willful and material failure or
refusal (other than by reason of his disability or incapacity) to perform his
duties under, this Agreement which is not cured within fifteen (15) days after
receipt by the Executive of written notice of same, (ii) fraud, embezzlement,
misappropriation of funds or breach of trust in connection with his services
hereunder, (iii) a conviction of any crime which involves dishonesty or a breach
of trust, or (iv) gross negligence in connection with the performance of the
Executive's duties hereunder, which the Board in its reasonable discretion deems
to be good and sufficient cause to terminate the Executive's employment with the
Company.  Any termination for Cause shall be made by notice in writing to the
Executive, which notice shall set forth in reasonable detail all acts or
omissions upon which the Company is relying for such termination. Upon any
termination pursuant to this Section 6.1, the Company shall pay to the Executive
any accrued and unpaid Base Salary through the date of termination.  Upon any
termination effected and compensated pursuant to this Section 6.1, the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 5.1, and payment of compensation for
accrued and unused vacation days).

          6.2  Disability.  The Company shall at all times have the right, upon
               ----------
written notice to the Executive, to terminate the Term of Employment, if the
Executive shall become entitled to benefits under the Company's long term
disability plan as then in effect, or, if the Executive shall as the result of
mental or physical incapacity, illness or disability, become unable to perform
his obligations hereunder for a period of 180 days in any 12-month period.  The
Board shall have sole discretion based upon competent medical advice to
determine whether the Executive is or continues to be disabled.  Upon any
termination pursuant to this Section 6.2, the Company shall (i) pay to the
Executive any accrued and unpaid Base Salary and Bonus Payment, through the
effective date of termination specified in such notice, (ii) pay to the
Executive his

                                      -4-
<PAGE>

Termination Year Bonus, if any, at the time provided in Section 4.2b hereof, and
(iii) pay the COBRA premiums for the Executive's medical and dental insurance
coverage in effect on the termination date, for a period of eighteen (18) months
following the termination of the Executive's employment with the Company. Upon
any termination effected and compensated pursuant to this Section 6.2, the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 5.1, and payment of compensation
for accrued and unused vacation days).

          6.3  Death.  Upon the death of the Executive during the Term of
               -----
Employment, the Company shall (i) pay to the estate of the deceased Executive
any accrued and unpaid Base Salary and Bonus Payment, through the Executive's
date of death, (ii) pay to the estate of the deceased Executive, the Executive's
Termination Year Bonus, if any, at the time provided in Section 4.2b hereof.
Upon any termination effected and compensated pursuant to this Section 6.3, the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 5.1, and payment of compensation
for accrued and unused vacation days).

          6.4  Termination Without Cause.  At any time the Company shall have
               -------------------------
the right to terminate the Term of Employment by written notice to the
Executive.  Upon any termination pursuant to this Section 6.4 (that is not a
termination under any of Sections 6.1, 6.2, 6.3 or 6.5) the Company shall (i)
pay to the Executive any accrued and unpaid Base Salary and Bonus Payment,
through the date of termination specified in such notice, (ii) continue to pay
the Executive's Base Salary and Prior Years' Bonus for a period of twenty-four
(24) months following the termination of the Executive's employment with the
Company, in the manner and at such times as the Base Salary otherwise would have
been payable to the Executive, (iii) pay to the Executive his Termination Year
Bonus, if any, at the time provided in Section 4.2b, and (iv) pay the COBRA
premiums for the Executive's medical and dental insurance coverage in effect on
the termination date, for a period of eighteen (18) months following the
termination of the Executive's employment with the Company.  Upon any
termination effected and compensated pursuant to this Section 6.4, the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 5.1, and payment of compensation for
accrued and unused vacation days).

          6.5  Termination by Executive.
               ------------------------

               a.  The Executive shall at all times have the right, by written
notice not less than one hundred and eighty (180) days prior to the termination
date, to terminate his Employment Term.

               b.  Upon termination of the Term of Employment pursuant to this
Section 6.5 (that is not a termination under Section 6.6) by the Executive, the
Company shall pay to the Executive any accrued and unpaid Base Salary and Bonus
Payment, through the effective

                                      -5-
<PAGE>

date of termination specified in such notice. Upon any termination effected and
compensated pursuant to this Section 6.5, the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 5.1, and payment of compensation for accrued and unused
vacation days).

          6.6  Change in Control of the Company.
               --------------------------------

               a.  Unless otherwise provided in Section 6.7 hereof, in the event
that a Change in Control (as defined in paragraph g. of this Section 6.6) in the
Company shall occur during the Term of Employment, the Company shall

                   (i) pay to the Executive, within thirty (30) days of the date
of the Change in Control, a lump sum bonus equal to two (2) times the
Executive's annual Base Salary and Bonus (the "Change in Control Date Bonus").
This payment will be made only as a result of
                   a.  Board approval, or
                   b.  if the per share selling price is greater than the
average per share price for the previous six (6) month trading period;

                   and (ii) accelerate the vesting of all AmeriPath Stock
Options which have been granted to the Executive but are unvested, so that the
unvested shares are one hundred (100) percent vested on the date of the Change
in Control.

               b.  If the Executive's Term of Employment is terminated prior to
the date on which a Change of Control occurs, and it is reasonably demonstrated
that such termination (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control, or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes hereunder, a "Change of Control Termination" shall be deemed to have
occurred.

               c.  If Executive's Term of Employment is terminated without cause
pursuant to Section 6.4 hereof, within one year after a Change of Control, a
"Change of Control Termination" shall be deemed to have occurred.

               d.  If, within one year following a Change of Control, (i) the
Company requires the Executive to be based at any office or location more than
twenty-five (25) miles from that in which the Executive was based at the time
this Agreement was executed (except for travel reasonably required in the
performance of the Executive's duties and responsibilities hereunder), or (ii)
the Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities are not at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at the time preceding the Change in Control, then in
either event, the Executive may elect to terminate this Agreement and a "Change
of Control Termination" shall be deemed to have occurred.

                                      -6-
<PAGE>

               e. In the event of a "Change of Control Termination" under
paragraphs b, c, or d of this Section 6.6, the Company shall:

                  (i) pay to the Executive any accrued and unpaid Base Salary
and Bonus Payment, through the effective date of the termination;

                  (ii) pay to the Executive his Termination Year Bonus, if any,
at the time provided in Section 4.2b hereof;

                  (iii) pay to the Executive, within 30 days of the termination
of his employment hereunder, a lump sum payment equal to two (2) times the
Executive's annual Base Salary and Bonus;

                  (iv) accelerate the vesting of all AmeriPath Stock Options
which have been granted to the Executive since the Change in Control but are
unvested, so that the unvested shares are one hundred (100) percent vested as of
the Executive's Termination Date; and

                  (v) pay to the Executive in a lump sum the compensation and
benefits provided in the Termination Without Cause Section 6.4.

The Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 5.1, and payment of
compensation for accrued and unused vacation days).

               f. If, on the date of the one-year anniversary of the date of the
Change In Control, the Executive is in the employ of the Company, or any
successor thereto or assign thereof, the Executive shall be paid, on such one-
year anniversary date, an additional lump sum bonus equal to one times the
Executive's annual Base Salary and Bonus as determined immediately prior to the
Change in Control Date (the "Anniversary Bonus").

               g. For purposes of this Agreement, the term "Change in Control"
                                                            -----------------
shall mean:

                  (i) Approval by the shareholders of the Company of (x) a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or other
transaction, or (y) a liquidation or dissolution of the Company or (z) the sale
of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned);

                                      -7-
<PAGE>

                  (ii)  Individuals who, as of the Commencement Date of this
Agreement, constitute the Board (the "Incumbent Board") cease for any reason to
                                      ---------------
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to the Commencement Date of this Agreement whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company) shall be, for purposes
of this Agreement, considered as though such person were a member of the
Incumbent Board; or

                  (iii) the acquisition (other than by or from the Company) by
any person, entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act, of beneficial ownership within the
meaning of Rule 13-d promulgated under the Securities Exchange Act of 50% or
more of either the then out standing shares of the Company's Common Stock or the
combined voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors [(hereinafter referred
to as the ownership of a "Controlling Interest") excluding, for this purpose,
                          --------------------
any acquisitions by (1) the Company or its Subsidiaries, (2) any person, entity
or "group" that as of the Commencement Date of this Agreement owns beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act) of a Controlling Interest or (3) any employee benefit plan of the
Company or its Subsidiaries].

          6.7  Gross-up Payment for Golden Parachute Excise Tax.
               ------------------------------------------------

               a. Additional Payment. In the event that any portion of the
                  ------------------
payments and benefits provided to Executive under this Agreement (without regard
to any amount payable under this Section 6.7) and any other payments and
benefits under any other agreement with or plan of the Company (in the
aggregate, "Total Payments") would be subject to the excise tax imposed by
            --------------
Section 4999 of the Internal Revenue Code (the "Excise Tax"), then Executive
                                                ----------
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
                                                       ----------------
amount such that after payment by Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

               b. Determination by Accounting Firm. Subject to the provisions of
                  --------------------------------
Section 6.7(c) below, all determinations required to be made under this Section
6.7, including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Company's independent auditors or, at the
Executive's option, any other nationally or regionally recognized firm of
independent accountants selected by the Executive and approved by the Company,
which approval shall not be unreasonably withheld, (the "Accounting Firm") which
                                                          --------------
shall provide detailed supporting calculations both to the Company and
Executive. All fees and

                                      -8-
<PAGE>

expenses of the Accounting Firm shall be paid solely by the Company. Any Gross-
Up Payment, as determined pursuant to this Section 6.7 , shall be paid by the
Company to Executive not later than the due date for the payment of any Excise
Tax. Any determination by the Accounting Firm shall be binding upon the Company
and Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
                                       ------------
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 6.7(c) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for Executive's
benefit.

               c. Company's Right to Contest Excise Tax. Executive agrees to
                  -------------------------------------
notify the Company in writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten
(10) business days after Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive agrees to:

                  (i)   give the Company any information reasonably requested by
the Company relating to such claim,

                  (ii)  take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company;

                  (iii) cooperate with the Company in good faith in order to
effectively contest such claim, and

                  (iv)  permit the Company to participate in any proceedings
relating to such claim;

provided, however, that the Company agrees to bear and pay directly all costs
--------
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless, on
an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation on the foregoing provisions
of this Section 6.7(c), the Company shall control all proceedings taken in
connection with such contest

                                      -9-
<PAGE>

and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearing and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that
if the Company directs Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to Executive, on an interest-
free basis and shall indemnify and hold Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for
Executive's taxable year with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the Company
control of the contest shall be limited to issues with respect to which a Gross-
Up Payment would be payable hereunder and Executive shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

               d. Repayment to the Company. If, after the receipt by Executive
                  ------------------------
of an amount advanced by the Company pursuant to Section 6.7(c), Executive
becomes entitled to receive any refund with respect to such claim, Executive
agrees to promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by Executive of an amount advanced by the Company pursuant to
Section 6.7(c), a determination is made that Executive is not entitled to any
refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

          6.8  Resignation.  Upon any termination of employment pursuant to this
               -----------
Article 6, the Executive shall be deemed to have resigned as an officer, and if
he was then serving as a director of the Company, as a director, and if required
by the Board, the Executive hereby agrees to immediately execute a resignation
letter to the Board.

          6.9  Survival.  The provisions of this Article 6 shall survive the
               --------
termination of this Agreement, as applicable.

     7.   Restrictive Covenants.
          ---------------------

          7.1  Non-competition. At all times while the Executive is employed by
               ---------------
the Company and for a two (2) year period immediately following the termination
of the Executive's employment with the Company for any reason, the Executive
shall not, directly or indirectly, engage in or have any interest in any sole
proprietorship, corporation, company, partnership, association, venture or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that directly or

                                      -10-
<PAGE>

indirectly (or through any affiliated entity) competes with the Company's
business (for purposes of this Agreement, any business that engages in the
management or provision of anatomic pathology diagnostic services {whether
through physician practices, laboratories, hospitals, medical or surgery centers
or otherwise} shall be deemed to compete with the Company's business); provided
that such provision shall not apply to the Executive's ownership of common stock
of the Company or the acquisition by the Executive, solely as an investment, of
securities of any issuer that are registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for
trading on any United States national securities exchange or that are quoted on
the National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities prices
in common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control of, more than five percent (5.0%) of any class of capital stock of such
corporation.

          7.2  Confidential Information. The Executive shall not at any time
               ------------------------
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any Confidential Information
(as hereinafter defined) pertaining to the business of the Company.  Any
Confidential Information or data now or hereafter acquired by the Executive with
respect to the business of the Company (which shall include, but not be limited
to, information concerning the Company's financial condition, prospects,
technology, customers, suppliers, employees, employee compensation or benefits,
employment practices and methods of doing business) shall be deemed a valuable,
special and unique asset of the Company that is received by the Executive in
confidence and as a fiduciary, and Executive shall remain a fiduciary to the
Company with respect to all of such information. For purposes of this Agreement,
"Confidential Information" means information disclosed to the Executive or known
 -------------------------
by the Executive as a consequence of or through the unique position of his
employment with the Company (including information conceived, originated,
discovered or developed by the Executive) prior to or after the date hereof, and
not generally or publicly known, about the Company or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to restrict the
Executive from disclosing Confidential Information to promote the best interests
of the Company or to the extent required by law.

          7.3  Nonsolicitation of Employees and Customers.  At all times while
               ------------------------------------------
the Executive is employed by the Company and for the two (2) year period
immediately following the termination of the Executive's employment with the
Company for any reason, the Executive shall not, directly or indirectly, for
himself or for or on behalf of any other person, firm, corporation, partnership,
association or other entity (a) employ or attempt to employ or solicit the
termination of employment of or enter into any contractual arrangement with any
employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six (6)
months, and/or (b) call on or solicit any of the actual or targeted prospective
customers or clients of the Company (or of its physician practices or
laboratories) on behalf of any person or entity in connection with any business
that competes with the Company's business, nor shall the Executive make known
the names and/or addresses of such employees, customers or clients or any
information relating in any manner to

                                      -11-
<PAGE>

the Company's trade or business relationships with such employees, customers or
clients, other than in connection with the performance of Executive's duties
under this Agreement.

          7.4  Ownership of Developments.  All copyrights, patents, trade
               -------------------------
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
                            ------------
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code.  To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product.  Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.

          7.5  Books and Records.  All books, records, and accounts relating in
               -----------------
any manner to the customers or clients of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.

          7.6  Definition of Company.  Solely for purposes of this Article 7,
               ---------------------
the term "Company" also shall include any existing or future subsidiaries of the
          -------
Company that are operating during the time periods described herein and any
other entities that directly or indirectly, through one or more intermediaries,
control, are controlled by or are under common control with the Company during
the periods described herein.

          7.7  Acknowledgment by Executive. The Executive acknowledges and
               ---------------------------
confirms that (a) the restrictive covenants contained in this Article 7 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Article 7 (including without
limitation the length of the term of the provisions of this Article 7) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Executive acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Article 7. The Executive further acknowledges that the
restrictions contained in this Article 7 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.

          7.8  Reformation by Court. In the event that a court of competent
               --------------------
jurisdiction shall determine that any provision of this Article 7 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article 7 within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided

                                      -12-
<PAGE>

for the maximum restriction permitted under such governing law.

          7.9  Extension of Time. If the Executive shall be in violation of any
               -----------------
provision of this Article 7, then each time limitation set forth in this Article
7 shall be extended for a period of time equal to the period of time during
which such violation or violations occur. If the Company seeks injunctive relief
from such violation in any court, then the covenants set forth in this Article 7
shall be extended for a period of time equal to the pendency of such proceeding
including all appeals by the Executive.


          7.10 Survival. The provisions of this Article 7 shall survive the
               --------
termination of this Agreement, as applicable.

     8.   Injunction. It is recognized and hereby acknowledged by the parties
          ----------
hereto that a breach by the Executive of any of the covenants contained in
Article 7 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Article 7 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.

     9.   Arbitration. Any dispute or controversy arising under or in connection
          -----------
with this Agreement shall be settled exclusively by arbitration in Palm Beach
County, Florida, in accordance with the Rules of the American Arbitration
Association then in effect (except to the extent that the procedures outlined
below differ from such rules). Within thirty (30) days after written notice by
either party has been given that a dispute exists and that arbitration is
required, each party must select an arbitrator and those two arbitrators shall
promptly, but in no event later than thirty (30) days after their selection,
select a third arbitrator. The parties agree to act as expeditiously as possible
to select arbitrators and conclude the dispute. The selected arbitrators must
render their decision in writing. The cost and expenses of the arbitration and
of enforcement of any award in any court shall be borne by the non-prevailing
party. If advances are required, each party will advance one-half of the
estimated fees and expenses of the arbitrators. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. Although arbitration is
contemplated to resolve disputes hereunder, either party may proceed to court to
obtain an injunction to protect its rights hereunder, the parties agreeing that
either could suffer irreparable harm by reason of any breach of this Agreement.
Pursuit of an injunction shall not impair arbitration on all remaining issues.

     10.  Section 162(m) Limits.    Notwithstanding any other provision of this
          ---------------------
Agreement to the contrary, if and to the extent that any remuneration payable by
the Company to the Executive for any year would exceed the maximum amount of
remuneration that the Company may deduct for that year under Section 162(m)

("Section 162(m)") of the Code, payment of the portion of the remuneration for
----------------
that year that would not be so deductible under Section 162(m)

                                      -13-
<PAGE>

shall, in the sole discretion of the Board, be deferred and become payable at
such time or times as the Board determines that it first would be deductible by
the Company under Section 162(m), with interest at the "short-term applicable
rate" as such term is defined in Section 1274(d) of the Code. The limitation set
forth under this Section 10 shall not apply with respect to any amounts payable
to the Executive pursuant to Article 6 hereof.

     11.  Assignment.  Neither party shall have the right to assign or delegate
          ----------
his rights or obligations hereunder, or any portion thereof, to any other
person.

     12.  Governing Law.  This Agreement shall be governed by and construed and
          -------------
enforced in accordance with the laws of the State of Florida, without reference
to principles of conflict of laws.

     13.  Entire Agreement; Prior Agreements.  This Agreement constitutes the
          ----------------------------------
entire agreement between the parties hereto with respect to the subject matter
hereof and, upon its effectiveness, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Company (or any of its affiliates) with respect to such subject matter.
In addition, this shall supercede and replace the Executive's Prior Employment
Agreement, the Retention Agreement, as well as any and all other agreements
between the Executive and the Company and, upon execution of this Agreement by
the Executive and the Company, the Prior Employment Agreement, the Retention
Agreement and any and all other agreements between the Executive and the Company
shall terminate and shall no longer have any force and effect. Notwithstanding
this Article 13 or any other provision of this Agreement, Option Agreements
entered into by the Executive and the Company prior to the date of this
Agreement shall remain in full force and effect. This Agreement may not be
modified in any way unless by a written instrument signed by both the Company
and the Executive.

     14.  Notices:  All notices and other communications hereunder shall be in
          -------
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

          If to the Executive:
          -------------------

          James C. New
          307 Eagleton Golf Drive
          Palm Beach Gardens, FL 33418

          If to the Company:
          -----------------

          AmeriPath, Inc.
          7289 Garden Road, Suite 200
          Riviera Beach, FL 33404
          Attention:

                                      -14-
<PAGE>

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     15.  Benefits; Binding Effect.  This Agreement shall be for the benefit of
          ------------------------
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where permitted and
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.

     16.  Severability.  The invalidity of any one or more of the words,
          ------------
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall be declared invalid, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, provisions or provisions,  section or sections or article or articles
had not been inserted.  If such invalidity is caused by length of time or size
of area, or both, the otherwise invalid provision will be considered to be
reduced to a period or area which would cure such invalidity.

     17.  Waivers.  The waiver by either party hereto of a breach or violation
          -------
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.

     18.  Damages.  Nothing contained herein shall be construed to prevent the
          -------
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement.  In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.

     19.  Section Headings.  The article, section and paragraph headings
          ----------------
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

     20.  No Third Party Beneficiary.  Nothing expressed or implied in this
          --------------------------
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.

     21.  Withholding Taxes. The Company may withhold from any amounts payable
          -----------------
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

     22.  Counterparts.  This Agreement may be executed in one or more
          -------------
counterparts, each

                                      -15-
<PAGE>

of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument and agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

EXECUTIVE:                                  COMPANY:

                                            AMERIPATH, INC.


________________________________           By:_________________________________
James C. New                                  E. Roe Stamps, IV
                                              Compensation Committee of the
                                              Board of Directors



                                           By:_________________________________
                                              E. Martin Gibson
                                              Compensation Committee of the
                                              Board of Directors

                                      -16-