By Rebecca Mayo, J.D.
A court held that two cardiologists’ claims that they were actually employees and not bound to the arbitration clause in their independent contractor agreements, was still an issue for arbitration.
A district court found that to make the argument that the cardiologists were in fact employees because their duties exceeded the duties in their independent contractor agreements, required a review of the agreement itself. Because that agreement contained an arbitration clause, the dispute could only be settled in arbitration. The court dismissed the federal False Claims Act (FCA) and sent it to arbitration. The court also declined to exercise supplemental jurisdiction over the remaining state-based retaliation claims and dismissed those claims so the state courts could decide whether those claims belonged in arbitration as well (Kaki v. Tenent Healthcare Corporation, October 9, 2019, Tarnow, A.).
Retaliation claims. In 2013, Tenent Healthcare Corporation purchased Detroit Medical Center and VHS Harper-Hutzel Hospital and in 2014 Tenent opened the DMC Heart Hospital. Two cardiologists who served as Directors at the new DMC Heart Hospital claimed that when Tenent came into the picture in 2013, it began scaling down safety procedures and quality of care procedures. The cardiologists claimed they repeatedly spoke out about unsafe, unethical, and illegal medical practices. The alleged issues ranging from the maintenance of unsterile surgical tools to fraudulent billing under Medicaid and Medicare.
According to the cardiologists, Tenent initiated an investigation into them and terminated their employment in retaliation. The cardiologists filed a number of claims which included retaliatory discharge, retaliatory removal of clinical privileges, false light, defamation, and violations of the FCA, among others. Tenent filed a motion to compel arbitration based on the various contracts the cardiologists had entered into with Tenent’s hospitals.
Arbitration. Both cardiologists entered into Directorship Agreements and Cardio Team One On-Call Agreements with Tenent’s hospitals which included arbitration clauses. The cardiologists assert that the agreements are independent contractor agreements that disclaim any employment relationship and are therefore irrelevant to their employment relationship with Tenent. The court disagreed and noted that the theory that their duties represented those of employees and that their duties exceeded those listed in the agreement is, by default, an attack on the validity of the underlying agreement. Further, the FCA claim specifically lists "removal from Director positions" as an element of the retaliation and asks for reinstatement to previous positions, which would entail reinstatement to positions outlined in the directorship agreements. This would require analyzing facts arising under the directorship agreements. Therefore, this dispute must be heard by an arbitrator.
This is case No. 19-10863.
Attorneys: Deborah L. Gordon (Law Offices of Deborah L. Gordon) and Sharon R. Gross (Ogletree Deakins Nash Smoak & Stewart, PLLC) for Amir Kaki and Mahir Elder. Benjamin W. Jeffers (Hickey Hauck Bishoff & Jeffers PLLC) for Tenet Healthcare Corp., VHS, Inc., VHS of Michigan, Inc. and VHS Harper-Hutzel Hospital, Inc.
Companies: Tenet Healthcare Corp.; VHS, Inc.; VHS of Michigan, Inc.; VHS Harper-Hutzel Hospital, Inc.
MainStory: TopStory CaseDecisions FCANews QualityNews MichiganNews
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