Physician Employment: At-Will Employment Contract Does Not Insulate Employer from Claim Based on Violation of State Public Policy—LoPresti v. Rutland Reg'l Health Servs., Inc.

Abstract

Physician Employment: At-Will Employment Contract Does Not Insulate Employer from Claim Based on Violation of State Public Policy-LoPresti v. Rutland Reg'l Health Servs., Inc.1-The Supreme Court of Vermont held that a contract provision allowing an employer to terminate an at-will employee or without cause does not insulate employer from a claim based on violation of public policy.2 The court reversed a summary judgment decision dismissing plaintiffs claim of wrongful discharge in violation of Vermont public policy, affirmed a summary judgment decision dismissing plaintiffs alternate claims of promissory estoppel and breach of an implied covenant of good faith and fair dealings, and remanded case for further proceedings.3 The plaintiff, Dr. Leigh LoPresti (LoPresti), was a primary care physician employed by defendant, Rutland Regional Physician Group, Inc. (Rutland). When necessary, LoPresti referred his patients to specialists employed by Rutland for treatment. At some point, LoPresti became concerned about three specialists employed by Rutland to whom he referred his patients. LoPresti believed that these specialists were providing clearly care.4 As such, LoPresti stopped referring his patients to these specialists, but continued to refer patients to other specialists employed by Rutland. LoPresti based his decision to stop referring patients to certain specialists on his ethical duties as a physician, as set forth in American Medical Association's Principles of Ethics, Rutland's internal Code of Ethics, and Vermont state law.5 LoPresti sought relief for two distinct claims. First, LoPresti alleged that Rutland terminated his employment because he did not make referrals to three substandard specialists and, therefore, that Rutland violated public policy restricting an employer's ability to discharge its employees.6 Further, LoPresti alleged that his termination constituted a breach of contract based on an implied covenant of good faith and fair dealing and promissory estoppel.7 In response, Rutland presented three arguments. First, Rutland argued that its reasons for termination were irrelevant, as employment contract explicitly permitted termination without cause.8 Second, Rutland claimed that public policy does not prevent an employer from terminating an employee who refrains from referring patients because of concerns about his professional responsibility.9 Finally, Rutland argued that promissory estoppel was not applicable since there was a written contract between employer and employee.10 On appeal, Vermont Supreme Court rejected trial court's holding that or without cause clause of contract was enough to withstand LoPresti's claim of wrongful discharge. Under well-established Vermont law, an at-will employee can be terminated with or without reason unless there is a clear and compelling public policy against reason advanced for discharge.12 The court noted that trial court failed to address Payne v. Rozendaal,13 in which Vermont Supreme Court specifically held that an employer's right to terminate employment is not unlimited, and must be subject to public policy restrictions.14 The court dismissed Rutland's argument that notice requirement in LoPresti's contract distinguished contract from other at-will contracts.15 Specifically, court stated that LoPresti's contract included key element of an at-will contract-employer discretion.16 The court recognized that Vermont courts have allowed public policy to override written contractual provisions only when such provisions were injurious to interests of public or contravened some established interest of society.17 In this case, court concluded that if LoPresti could prove his allegations of potentially harmful care, the enforcement of public policy would have a tangible connection to protection of health care consumers. …