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Termination of Employment

Fahlen v. Sutter Central Valley Hospitals, 2014 Cal. LEXIS 1262 (Cal. 2014)

Also under Employment, Medical staff, and SLAPP laws

Outcome:    Very favorable

Issue

The issue in this case was whether physicians who lose their medical staff privileges for criticizing patient care at a hospital can invoke the California Whistleblower Protection Act, Cal. Health and Safety Code § 1278.5 (WPA), to restore their lost privileges and obtain concomitant monetary damages.

AMA interest

The AMA believes physicians should advocate for their patients’ health care.

Case summary

Mark Fahlen, MD, was employed at a Sutter Central Valley Hospital. On several occasions, he became embroiled with the hospital nurses regarding the proper care to be provided to his patients. The hospital indicated that it wished to terminate his employment and his medical staff privileges, and the matter was referred to a peer review panel. The peer review panel found that, although Dr. Fahlen had not acted properly in every regard, termination of his employment and medical staff privileges would be unwarranted. Despite this finding, the hospital terminated his employment and refused to renew his privileges.

Dr. Fahlen sued the hospital under the WPA, asserting that his termination had been in retaliation for his complaints about nursing incompetence and substandard care at the hospital. He sought monetary damages as well as a restoration of his medical staff privileges. His WPA suit was in contrast to the usual California procedure for challenging medical staff terminations, which would have been through a common law petition for mandamus.

Based on the California Anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute, Cal. Code Civ. Proc. § 425.16, the hospital moved to dismiss Dr. Fahlen’s lawsuit. The Anti-SLAPP law was enacted to prevent litigation abuse, which would otherwise chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances (as provided in the Federal First Amendment and in comparable provisions of the state constitution). The trial court denied the Anti-SLAPP motion to dismiss.

The hospital appealed the denial of the Anti-SLAPP motion to the California Court of Appeal. In its decision, the Court of Appeal observed that one requirement of an Anti-SLAPP motion is the plaintiff’s inability to demonstrate that the complaint is supported by prima facie facts sufficient to sustain a favorable judgment if those facts are credited at the actual trial. In this regard, the issue was whether Dr. Fahlen could demonstrate a prima facie case, inasmuch as he had not sought a writ of mandamus to challenge the denial of his medical staff privileges. According to the hospital, Dr. Fahlen could bring a WPA suit only if he had first exhausted his rights through a mandamus action. However, the Court of Appeal rejected the hospital’s argument. Based on its reading of the WPA, it held the trial court had correctly denied the hospital’s Anti-SLAPP motion and Dr. Fahlen’s lawsuit could proceed.

The hospital appealed to the California Supreme Court, which affirmed the Court of Appeal decision.  It held that such exhaustion of Dr. Fahlen's rights through a mandamus action is not required for physician whistleblowers.

Litigation Center involvement

The Litigation Center joined the California Medical Association in an amicus brief to the California Supreme Court in support of Dr. Fahlen.  Also, the CMA attorney spoke on behalf of the Litigation Center at oral argument.

California Supreme Court brief

Horn v. New York Times, 790 N.E.2d 753 (N.Y. Ct. App. 2003)

Also under Employment

Outcome:    Very unfavorable

Issue

The issue in this case was whether the New York Times could discharge its employee, a physician, because she refused to act unethically.

AMA interest

The AMA supports the right and duty of physician-employees to adhere to medical ethical rules, even when otherwise directed by employers.

Case summary

Dr. Horn sued the New York Times for wrongful termination of her employment relationship. She alleged that the Times’ Labor Relations, Human Resources, and Legal Departments had directed her to provide them with employees’ confidential medical records without those employees’ consent or knowledge. She also alleged that the Human Resources Department, so as to curtail the number of workers’ compensation claims filed against the Times, directed her to misinform employees that certain injuries and illnesses were not work related when, in fact, they were. She claimed that the Times fired her because she refused to follow these illegal instructions.

The Times moved to dismiss the lawsuit, contending that, under New York law, it could discharge Dr. Horn at-will. The trial court denied the motion, and the Times appealed.

By a 3-2 decision, the Appellate Division of the New York Supreme Court affirmed the denial of the Times’ motion to dismiss. Although the general rule in New York State is that employers can discharge their employees at-will, the court created an exception for a physician-employee who was punished for following ethical obligations to patients. The court noted that Dr. Horn was legally required to follow the AMA’s Principles of Medical Ethics and CEJA Opinion E-5.09, which required employed physicians to preserve the confidentiality of their patients’ medical information, even against the wishes of the employer.

The case was then appealed to the New York Court of Appeals, the highest court in New York. By a five-to-one decision, the Court of Appeals reversed the Appellate Division and the trial court. It held that, as in previous cases, it would decline to create a right of action for wrongful or abusive termination of employment or to recognize a covenant of good faith and fair dealing to imply terms grounded in public policy into employment contracts, and it ordered the case dismissed.

Litigation Center involvement

The Litigation Center joined a brief prepared by the Medical Society of the State of New

York (MSSNY) to support Dr. Horn in the Appellate Division of the New York Supreme Court. Additionally, the Litigation Center, on behalf of the AMA, MSSNY, and the American College of Occupational and Environmental Medicine, filed an amicus curiae brief in the Court of Appeals to support Dr. Horn.

New York appellate court brief.

New York Supreme Court brief.

Zamora-Quezada v. Health Texas Medical Group of San Antonio

34 F.Supp.2d 433 (W.D. Tex. 1998)

Also under Americans with Disabilities Act and Employment

Outcome:     Favorable

Issue

The issue in this case was whether physicians had been wrongly terminated from their medical group because they recommended proper medical care for their disabled patients who were enrolled in capitated managed care plans.

AMA interest

The AMA supports the right and duty of physicians to adhere to medical ethical rules and practice standards even when otherwise improperly directed by employers or third party payors.

Case summary

Physicians contended that they had been discharged because they had recommended proper medical care for their disabled and chronically ill patients who were enrolled in capitated managed care plans. The lawsuit was designed to broaden the scope of remedies available to such physicians. Defendants included a medical clinic, a management services organization, and four health plans. The case was filed in a Texas State court and was removed to the federal district court in San Antonio.

The federal district court held that the plaintiffs had adduced sufficient evidence to defeat a motion by defendants for summary judgment on the primary issues in the case. This published opinion established the right of physicians, under appropriate circumstances, to sue for wrongful discharge under the Americans with Disabilities Act (ADA) and the Rehabilitation Act, if the discharge was motivated by the physicians’ patient advocacy.

The court also entered summary judgment against Martin Guerrero, one of the physician plaintiffs, based on the release language in his employment severance agreement. He was found liable to HealthTexas for filing suit in violation of his agreement. Some of Dr. Guerrero’s claims, however, survived. The defendants made numerous additional motions, but they were all defeated, at least in part.

Ultimately, after the jury began its deliberations, the case settled under confidential terms.

Litigation Center involvement

The Litigation Center, in conjunction with the Texas Medical Association (TMA), contributed financial support to the plaintiffs.