Best approach to retaliation suit: Don't let it happen

A dispute with an employee can place a financial and emotional burden on a medical practice. But attorneys warn that is nothing compared with the legal gorilla that often follows -- the retaliation suit.

Retaliation suits are filed by employees who claim their bosses fired or mistreated them after they filed a discrimination claim or blew the whistle on alleged wrongdoing.

Practices are in particular danger of being slapped with these suits, attorneys say. Many times, experts say, the issue comes from mixed signals over a physician's intentions, conditions caused by the relative intimacy of a small practice, or differing orders from management and doctors at a hospital-owned practice.

The number of retaliation charges filed with the U.S. Equal Employment Opportunity Commission rose 18% from 2006 to a record high of 26,663 in 2007, spokeswoman Christine Nazer said. This is double the filings since 1992 and dramatically more than the 7,900 in 1991. Total monetary benefits in 2007 were $124 million.

Retaliation charges are now second only to racial discrimination in the number of EEOC filings, she said.

One reason for the spike is a U.S. Supreme Court action in 2006 that loosened the standard for filing retaliation lawsuits.

Previously, employees had to prove they were discharged or demoted because they filed charges of discrimination against a protected class, or reported an illegal activity by the company. Now employees can claim they were victims of more subtle changes, including a different work schedule or even not being invited to lunch.

However, the EEOC does state that petty annoyances and slights are not cause for a retaliation claim.

Another reason for the increase in filings, attorneys note, is that jury verdicts often are substantial and favorable to the employee, and that workers filing these suits face little risk of lost earnings.

Many times a jury will throw out a discrimination case, but award the employee millions in damages in a subsequent retaliation case. "The jurors think they are cutting up the pie and giving a slice to the employee," said Gordon Osaka, a business litigation attorney in Portland, Ore.

But suits don't always end in the employee's favor. Jay Fowler, a business litigation attorney with Foulston Siefkin LLP in Wichita, Kan., successfully defended a hospital sued on retaliation charges by a registered nurse employee. He said the hospital probably would not have been sued if the nurse had not been getting conflicting signals from the physicians at a hospital-owned practice and from hospital management.

The RN had been hired as a nurse, but wanted to do diabetes education, Fowler said. The physicians she worked with encouraged her in this endeavor, but hospital management told her to stop because it was time-consuming and not cost-effective.

The nurse claimed she was terminated after informing the state nursing board that the hospital was using medical assistants when a registered nurse was required. The hospital contended the nurse was terminated for economic reasons.

"The jury said the hospital did not retaliate. The hospital wasn't going to get into any trouble regarding the nurse's claims, because you didn't have to be an RN to do the job she was doing," Fowler said. "However, the physicians and management needed to act together."

Experts say there are steps a practice can take to protect against being sued for retaliation, and to boost its chances for winning the case if it is:

• Have a comprehensive policy manual that states what is expected of employees and what procedures will be followed if an infraction occurs. Then follow those procedures, said Phil Bluestein, a health care practice management attorney in Louisville, Colo. The manuals should include a complaint procedure and an equal employment opportunity provision that states employment decisions are made without regard to race, religion, age, sex, disability or any other status protected by federal or state law. The manual should be distributed to all employees, including physicians.
• Know the law. Federal laws prohibit retaliation against persons under the Civil Right Act, American with Disabilities Act and Age Discrimination in Employment Act.
• Investigate all employee claims of discrimination or harassment, and take appropriate action, including termination as warranted. Enforce a zero tolerance policy for everyone.
• Document everything and do it immediately. Documentation should be consistent among all employees. Keep documentation in office files.

Caffarini covered practice management issues during 2008-09. If you have any questions or comments, please contact Business Editor Bob Cook at 312-464-4434 or by e-mail (bob.cook@ama-assn.org).

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