An Indiana jury awarded Dr. Timothy Story, an Indiana physician, $2.05 million for his wrongful termination claim against defendant Ascension St. Vincent Medical Group.
According to Story, he was terminated in 2020 because of an alleged federal investigation into his prescribing practices. He was unaware of this, and never charged by authorities.
As a result of the termination, Story's career was disrupted, including his role as internist for the Indiana Pacers and his practice at a concierge medical group.
The jury awarded $300,000 for breach of contract and $1.75 million in punitive damages for tortious interference of contract. https://healthexec.com/topics/healthcare-management/legal-news/physician-earns-2m-judgment-ascension-wrongful-termination-lawsuit (Oct. 11. 2024).
Commentary
Employment contracts are the exception and not the rule in the United States. Most employment relationships, including in the healthcare industry, are at-will - meaning the employer can terminate the relationship for any reason, with or without notice, so long as the reason is not illegal.
However, the plaintiff in this matter alleged his termination had illegal consequences, specifically, interference with existing contractual relationships with other organizations like the Pacers. According to the source:
…Story said, he had no knowledge of any ongoing investigation against him and he was never charged with a crime. He claimed to only receive a subpoena requesting medical records on five patients, which he complied with under the law.
Ascension responded that [being investigated] still constituted a violation of his employment agreement. A day after firing Story, the health system canceled his professional liability insurance, effectively making it impossible for the internal medicine physician to care for patients.
By cancelling his healthcare insurance and effectively his contract, Story argued that defendant Ascension interfered with his contractual relationship with other organizations and therefore impacted his career and income.
Generally described, tortious interference of contract occurs when a third party intentionally disrupts a valid contractual relationship between two other parties.
Broadly, the elements needed to prove a claim of tortious interference are that a valid contract exists between two parties; the party interfering knew of the contract; the wrongdoer acts in a way that causes a party of the contract to breach or disrupt the contract; there is actual disruption of the contract; and damages are suffered.
In the above matter, the cancellation of Story's professional liability insurance caused him to be unable to perform as a physician with medical groups and other organizations.
The takeaway of this loss is that healthcare organizations must evaluate with counsel the "downstream" effects of any change to an employment relationship, especially an executive relationship.
