The Eighth Circuit Court of Appeals ruled that an emergency physician had no right to expect that he would continue working at a hospital due to the language in the contract he signed.
The emergency physician signed an independent contractor agreement with the staffing company for Drew Memorial Hospital in Monticello, Arkansas. The staffing company’s agreement with Drew Memorial stated that Drew Memorial had the “sole discretion to request the immediate removal of any physician at any time.” The emergency physician’s independent contractor agreement had language agreeing that the group could terminate the agreement for “reasonable cause.” One of the “reasonable causes” for which the contract could be terminated was
The request by [Drew Memorial] for the immediate removal of Independent Contractor from further service . . . . The determination that the Independent Contractor shall be removed from emergency services at [Drew Memorial] is in the sole discretion of [Drew Memorial], and being a contractual matter, is not subject to the review procedures in the Medical Staff Bylaws.
When the hospital invoked its contractual right to remove the physician from the schedule, the emergency physician sued, claiming that his right to due process had been violated and that the hospital illegally interfered with his contractual arrangement with the staffing company.
The Eighth Circuit Court of Appeals dismissed the physician’s case, stating that the plain language in the contract the physician signed made it clear that the physician could not have “a legitimate claim of entitlement to continued employment.” Even if the physician did have such an expectation, that expectation was contrary to the language in the agreement.
With regard to the physician’s allegation that Drew Memorial Hospital improperly interfered with the contractual relationship between the physician and the staffing company, the court again ruled that the contract language controlled. A claim for interference with a contractual relationship must show that there was some “unauthorized conduct of the defendant.” In this case, the contract the physician signed specifically allowed the hospital to request his “immediate removal … from further service.”
See Schueller v. Goddard, 631 F.3d 460 (2011)
Commentary
Many contracts contain language that allow a physician to be immediately removed from the schedule. Both staffing companies and hospitals almost always refuse to remove such language from their contracts. When you think about it, it is rather unfair that a hospital or staffing company forces you to provide 90 days notice before a physician can leave while at the same time giving itself the right to immediately terminate the same agreement.
When contracts contain such “immediate termination” language, the physician becomes an “at will” employee or contractor, meaning that the physician can be terminated “at the will” of the hospital or group. There is absolutely NO job security in a contract containing language allowing a physician to be immediately terminated in this manner.
In some cases, changing the contract language to reflect that the hospital or group’s request to remove the physician must be “reasonable” will provide some protection from immediate termination. Adding language requiring the hospital or group to promptly notify the physician of any events that would result in a request to immediately remove the physician from the schedule may give the physician a “heads up” to begin looking for another job.
Ultimately, the best protection against “immediate termination” language is to be on staff at more than one hospital. While it may be difficult to avoid being terminated at one facility, being on staff at others will at least maintain an income stream until staff privileges can be obtained at another hospital.