For the week of May 19, 2008
In a case with importance in both healthcare law and employment law, the 5th U.S. Circuit Court of Appeals reversed a lower court decision that would have required a hospital to affirmatively disclose that a physician with privileges to practice at that hospital had left his practice based upon performance issues related to drug use. Kadlec Medical Center v. Lakeview Medical Center, et al, 5th Circ., No. 06-30745, May 8, 2008.
Kadlec Medical Center and its insurer filed a lawsuit against Lakeview Medical Center, and against Louisiana Anesthesia Associates (LAA) and its shareholders. The suit was based upon the employment termination of Dr. Robert Berry – a member of LAA with privileges to practice at Lakeview – who was terminated from LAA after he was determined to have been impaired while under the influence of prescription drugs. In reference letters written by Lakeview Hospital and by members of LAA, Berry’s drug use was not disclosed. Subsequently, Berry applied to work as a locum tenens (temporary physician) at Kadlec Hospital in Washington State.
In October 2001, Kadlec began its credentialing process, and sent a request to Lakeview for information about Berry. Although the request included a detailed questionnaire and a signed consent for release of information, the hospital responded with a short letter that stated that: "Our records indicate that Dr. Robert L. Berry was on the Active Medical Staff of [Lakeview] in the field of Anesthesiology from March 04, 1997 through September 04, 2001." The letter did not disclose any information about Berry’s on-duty drug use, the investigation into that use, or any information about Berry’s termination from LAA. In addition, two LAA physicians submitted letters to Kadlec, one stating that Berry was an "excellent clinician" and would be an "asset" to any anesthesia practice, and the other recommending him "highly" as an anesthesiologist. Kadlec then credentialed Berry.
In November 2002, a patient for whom Berry acted as anesthesiologist at Kadlec suffered complications related to anesthesia, and is now in a permanent vegetative state. The patient’s family sued Kadlec and Berry, and the case was settled for over $7 Million. Kadlec and its insurer then filed a lawsuit against Lakeview, LAA, and the individual doctors who supplied the favorable reference letters. A jury awarded $8.24 Million to plaintiffs, and judgment was entered against Lakeview and LAA. (The judgments against the individual doctors were ascribed to LAA.)
On appeal, the Fifth Circuit upheld the judgment against LAA, but reversed it as to Lakeview. In a detailed opinion, the Court analyzed the claims of intentional misrepresentation and negligent misrepresentation against the defendants. It found that in order to prove either, the plaintiff first must establish an affirmative duty to disclose information.
The Court began by stating that after choosing to write referral letters, the defendants "assumed a duty not to make affirmative misrepresentations" in their letters. It concluded that the LAA defendants did, in fact, make misleading statements, while Lakeview did not. The Court also examined whether the defendants had an affirmative duty to disclose negative information about Berry in the reference letters, and concluded that no such duty existed. Based upon this analysis, the Court reversed the judgment against Lakeview, while upholding the judgment against LAA and its physicians.
Although this case was specifically decided under Louisiana law (which states that a former employer’s negative reference about an employee to a prospective employer can form the basis of a defamation claim), it is noteworthy in a number of respects. It does not stand for the proposition that every inadvertent incorrect statement leads directly to legal liability for a former employer. Instead, it underscores the fact that once an employer undertakes to provide information about a former employee, it may incur liability for misleading or intentionally false statements.
As a credentialing issue, this case is important, based on the fact that the credentialing process includes an original source verification requirement (including information related to licensure and current competence, and health fitness to perform the requested privileges), meaning that Kadlec was obligated to attempt to obtain such information from Lakeview. While the Court’s holding in this case does not modify that obligation, it does seem to excuse Lakeview’s failure to provide available information related to those very issues. Clearly, this is yet another case in which a Court’s employment-related decision may have an unintended but far-reaching impact on healthcare-related situations.
Monday, May 19, 2008
Thursday, May 15, 2008
Issue: Employee’s demotion while on intermittent FMLA leave can result in retaliation claim
For the week of May 12, 2008
According to the 7th U.S. Circuit Court of Appeals, a school district’s bookkeeper who was demoted while taking intermittent leave to care for her elderly mother provided evidence that her leave was part of the motivation for her demotion, and therefore sufficiently raised a claim of retaliation under the FMLA. Lewis v. School District #70, et al, 7th Cir., No. 06-4435, April 17, 2008.
Debra Lewis began working as a bookkeeper and treasurer for Freeburg Community School District in Saint Clair County, Illinois in 1997. She performed her job "admirably" until 2004, when both of her parents became terminally ill. After Lewis’ father died in May of that year, Lewis began to care for her mother at home. While Lewis’ supervisor (Dr. Hawkins) was aware that she was missing work to do so, he gave permission for the absences and allowed Lewis to "work from home." However, after a few weeks of this arrangement, Lewis’ schedule began to create problems for the other School District employees, who had to rearrange their own schedules to cover Lewis’ work absences.
At a School Board meeting on June 28, 2004, Dr. Hawkins related to the Board that Lewis’ continued absences were creating difficulties for the School District. While certain Board members expressed the view that a new bookkeeper should be hired, Hawkins dissuaded them and instead, sent a letter to Lewis advising her to resume her regular work schedule. Although Lewis returned to that schedule, she again began missing work in September and October to care for her mother.
At the October Board meeting, Lewis’ absences again were discussed. This time, Hawkins also mentioned that Lewis was experiencing performance problems cause by the absences. When a Board member expressed the view that Lewis should be fired, Hawkins informed the Board that the District could face liability under the FMLA if it fired Lewis. He suggested that Lewis be offered "official" unpaid FMLA leave instead. That offer was made and accepted by Lewis. However, during the period of her intermittent leave, the District did not bring on assistance with the bookkeeping functions. Lewis continued to perform all of the functions of bookkeeper, doing the work from home and on weekends during her days of leave, but was not paid for that work.
Between October 2004 and March 2005, Hawkins was encouraged by the Board to document Lewis’ "poor performance" in order to "build a case" against her. He did so, and in March 2005, Lewis received her first and only performance evaluation from Hawkins, in which she was advised that her performance problems were a "direct result of [her] reduced hour schedule." Based on the negative review, the Board offered a choice to Lewis: either resign, or be reassigned to a teacher’s assistant position at a lower salary.
Lewis filed a lawsuit, alleging that her demotion was a result – in whole or in part – of her protected FMLA leave. While the lower court dismissed the FMLA claim on summary judgment, the Seventh Circuit reversed that decision, holding that Lewis presented sufficient evidence of an impermissible retaliatory motivation to create a genuine issue for a jury.
As part of that evidence, the Court specifically cited the District’s initial failure to inform Lewis of her right to FMLA leave, the District’s decision to hold Lewis to the standard of a full-time employee during her period of FMLA leave, and School Board members’ expressions of hostility toward Lewis’ absences.
The Court’s opinion provides a checklist for employers. First, FMLA leave should be discussed with the employee as soon as the employer is made aware that that individual is caring for a family member with a serious medical condition. Second, an employee should not be disciplined or demoted for performance issues caused by the actual FMLA leave, as to do so would negate the purpose of the Act. Third, employers should ensure that its decision makers are made fully aware of employees’ rights (and employers’ obligations) under the FMLA, and that such decision makers are trained to appropriately discuss and consider the ramifications of those rights and obligations.
According to the 7th U.S. Circuit Court of Appeals, a school district’s bookkeeper who was demoted while taking intermittent leave to care for her elderly mother provided evidence that her leave was part of the motivation for her demotion, and therefore sufficiently raised a claim of retaliation under the FMLA. Lewis v. School District #70, et al, 7th Cir., No. 06-4435, April 17, 2008.
Debra Lewis began working as a bookkeeper and treasurer for Freeburg Community School District in Saint Clair County, Illinois in 1997. She performed her job "admirably" until 2004, when both of her parents became terminally ill. After Lewis’ father died in May of that year, Lewis began to care for her mother at home. While Lewis’ supervisor (Dr. Hawkins) was aware that she was missing work to do so, he gave permission for the absences and allowed Lewis to "work from home." However, after a few weeks of this arrangement, Lewis’ schedule began to create problems for the other School District employees, who had to rearrange their own schedules to cover Lewis’ work absences.
At a School Board meeting on June 28, 2004, Dr. Hawkins related to the Board that Lewis’ continued absences were creating difficulties for the School District. While certain Board members expressed the view that a new bookkeeper should be hired, Hawkins dissuaded them and instead, sent a letter to Lewis advising her to resume her regular work schedule. Although Lewis returned to that schedule, she again began missing work in September and October to care for her mother.
At the October Board meeting, Lewis’ absences again were discussed. This time, Hawkins also mentioned that Lewis was experiencing performance problems cause by the absences. When a Board member expressed the view that Lewis should be fired, Hawkins informed the Board that the District could face liability under the FMLA if it fired Lewis. He suggested that Lewis be offered "official" unpaid FMLA leave instead. That offer was made and accepted by Lewis. However, during the period of her intermittent leave, the District did not bring on assistance with the bookkeeping functions. Lewis continued to perform all of the functions of bookkeeper, doing the work from home and on weekends during her days of leave, but was not paid for that work.
Between October 2004 and March 2005, Hawkins was encouraged by the Board to document Lewis’ "poor performance" in order to "build a case" against her. He did so, and in March 2005, Lewis received her first and only performance evaluation from Hawkins, in which she was advised that her performance problems were a "direct result of [her] reduced hour schedule." Based on the negative review, the Board offered a choice to Lewis: either resign, or be reassigned to a teacher’s assistant position at a lower salary.
Lewis filed a lawsuit, alleging that her demotion was a result – in whole or in part – of her protected FMLA leave. While the lower court dismissed the FMLA claim on summary judgment, the Seventh Circuit reversed that decision, holding that Lewis presented sufficient evidence of an impermissible retaliatory motivation to create a genuine issue for a jury.
As part of that evidence, the Court specifically cited the District’s initial failure to inform Lewis of her right to FMLA leave, the District’s decision to hold Lewis to the standard of a full-time employee during her period of FMLA leave, and School Board members’ expressions of hostility toward Lewis’ absences.
The Court’s opinion provides a checklist for employers. First, FMLA leave should be discussed with the employee as soon as the employer is made aware that that individual is caring for a family member with a serious medical condition. Second, an employee should not be disciplined or demoted for performance issues caused by the actual FMLA leave, as to do so would negate the purpose of the Act. Third, employers should ensure that its decision makers are made fully aware of employees’ rights (and employers’ obligations) under the FMLA, and that such decision makers are trained to appropriately discuss and consider the ramifications of those rights and obligations.
Monday, May 5, 2008
Issue: USERRA plaintiffs need not pre-pay filing fees in federal court actions
For the week of May 5, 2008
According to the 7th U.S. Circuit Court of Appeals, a military veteran claiming that his employment termination was a violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA) is not required to pay the filing fee to pursue that claim in federal court. Davis v. Advocate Health Ctr. Patient Care Express, 7th Cir., No. 07-2709, April 28, 2008.
Robert Davis, a veteran of the Vietnam conflict, worked briefly as an answering service agent for Advocate Health Center Patient Care Express. When Davis was terminated from that position prior to completing his probationary period, he filed a lawsuit in federal court, claiming violation of the USERRA. At the same time, Davis filed a motion to waive the filing fee associated with the lawsuit, arguing that the USERRA excused such payment by a veteran.
The district court denied the motion, finding that language in the USERRA regarding fees and costs did not include a waiver of filing fees for lawsuits, and holding that such waiver would "encourage frivolous lawsuits." The court directed Davis to pay the filing fee within 25 days, or his suit would be dismissed. Davis did not pay the fee, waited for the 25 days to pass, and then filed an appeal to the Seventh Circuit.
While the district court never formally entered judgment against Davis, the Seventh Circuit accepted jurisdiction of the matter for purposes of the appeal. It found that because Davis had not complied with the condition upon which the case could have gone forward (payment of the filing fee), the lower court’s conditional dismissal became an appealable "final decision" whether or not a final judgment was entered. The Court held that all that is required for a judgment to be final for purposes of appeal is "that the district court is done with the case."
The Seventh Circuit then addressed the question of whether the USERRA excuses Davis from paying his filing fee, and found that it does. The employer argued that the only statutory mechanism that allows a plaintiff to avoid paying filing fees is the in forma pauperis statute. However, the Seventh Circuit pointed out a number of other statutes in which filing fees are waived for members of the armed services, including a specific federal statute that seamen may file suit without prepaying fees or costs, and one that allows military members seeking review of courts-martial to petition the Supreme Court for review without prepayment of fees and costs. Based upon those statutes, and upon the fact that the few cases to have addressed the same issue have been decided in favor of the military veteran, the Seventh Circuit reversed the lower court’s decision. It then directed its own clerk to refund the appellate filing fee paid by Davis.
While cases involving procedural issues of this type typically are of more interest to lawyers than to employers, the message in this case is universally applicable: courts construe the USERRA liberally in favor of veterans seeking its protection. Based on that message, employers should be knowledgeable about the provisions of the USERRA, and should recognize how those provisions may affect employment-related decisions involving veteran/employees.
According to the 7th U.S. Circuit Court of Appeals, a military veteran claiming that his employment termination was a violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA) is not required to pay the filing fee to pursue that claim in federal court. Davis v. Advocate Health Ctr. Patient Care Express, 7th Cir., No. 07-2709, April 28, 2008.
Robert Davis, a veteran of the Vietnam conflict, worked briefly as an answering service agent for Advocate Health Center Patient Care Express. When Davis was terminated from that position prior to completing his probationary period, he filed a lawsuit in federal court, claiming violation of the USERRA. At the same time, Davis filed a motion to waive the filing fee associated with the lawsuit, arguing that the USERRA excused such payment by a veteran.
The district court denied the motion, finding that language in the USERRA regarding fees and costs did not include a waiver of filing fees for lawsuits, and holding that such waiver would "encourage frivolous lawsuits." The court directed Davis to pay the filing fee within 25 days, or his suit would be dismissed. Davis did not pay the fee, waited for the 25 days to pass, and then filed an appeal to the Seventh Circuit.
While the district court never formally entered judgment against Davis, the Seventh Circuit accepted jurisdiction of the matter for purposes of the appeal. It found that because Davis had not complied with the condition upon which the case could have gone forward (payment of the filing fee), the lower court’s conditional dismissal became an appealable "final decision" whether or not a final judgment was entered. The Court held that all that is required for a judgment to be final for purposes of appeal is "that the district court is done with the case."
The Seventh Circuit then addressed the question of whether the USERRA excuses Davis from paying his filing fee, and found that it does. The employer argued that the only statutory mechanism that allows a plaintiff to avoid paying filing fees is the in forma pauperis statute. However, the Seventh Circuit pointed out a number of other statutes in which filing fees are waived for members of the armed services, including a specific federal statute that seamen may file suit without prepaying fees or costs, and one that allows military members seeking review of courts-martial to petition the Supreme Court for review without prepayment of fees and costs. Based upon those statutes, and upon the fact that the few cases to have addressed the same issue have been decided in favor of the military veteran, the Seventh Circuit reversed the lower court’s decision. It then directed its own clerk to refund the appellate filing fee paid by Davis.
While cases involving procedural issues of this type typically are of more interest to lawyers than to employers, the message in this case is universally applicable: courts construe the USERRA liberally in favor of veterans seeking its protection. Based on that message, employers should be knowledgeable about the provisions of the USERRA, and should recognize how those provisions may affect employment-related decisions involving veteran/employees.
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