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New York High Court Holds Exception To At-Will Employment Rule Does Not Apply To Physician Employed By Nonmedical Employer


HLD, v. 31 n. 5 (May 2003)

New York High Court Holds Exception To At-Will Employment Rule Does Not Apply To Physician Employed By Nonmedical Employer

Sheila Horn sued her former employer, The New York Times (Times), alleging breach of contract after a reorganization of the Times' Medical Department resulted in the phasing out of her position as Associate Medical Director. Horn sought compensatory and punitive damages for the alleged breach. Horn claimed her primary responsibilities were to treat and advise employees, and to determine if injuries suffered by employees were work-related, which could result in the employee's eligibility for workers' compensation benefits. According to Horn, the Times' human resources department frequently asked her to provide them with employees' confidential medical records, and instructed her to misinform employees about their injuries in an attempt to limit workers' compensation claims. Horn claimed she refused to share the employee medical records without the employee's consent, and as a result the Times restructured the medical department to get rid of her. The Times filed a motion to dismiss, which the New York Supreme Court denied, holding that the exception in Wieder v. Skala , 80 N.Y.2d 628 (1992), to the employment at-will rule should be extended to a physician employed by a nonmedical entity. The Appellate Division affirmed, and certified a question to the Court of Appeals whether the Appellate Division's order affirming the Supreme Court's order was proper.

The New York Court of Appeals reversed the Appellate Division's judgment, granted the Times' motion to dismiss, and answered the certified question in the negative. In Wieder, an associate in a law firm asked the firm's partners to report another associate's misconduct as required by the New York Code of Professional Responsibility, but the partners declined and the associate requesting the action was subsequently fired. The associate sued the firm on a claim of retaliatory discharge and the appeals court reinstated the associate's breach of contract claim after it was dismissed, holding that the provision of professional services to the firm's client was the only purpose of the associate's employment at the firm and because of the "common professional enterprise" the associate and the firm were both bound to follow the requirements of the Code of Professional Responsibility to report the misconduct. The high court explained the unique circumstances of the employment situation in Wieder created an exception to the at-will employment rule. Applying the holding in Wieder , the high court determined that Horn had not established that her employment was a "common professional enterprise." Horn's primary responsibilities were to provide medical treatment to employees as directed by her employer, and the provision of those services did not occupy "the very core" of her employment, said the high court. Rejecting Horn's argument that physician-patient confidentiality required her to refuse to turn over employee medical records, the appeals court determined that issue was not central to the "conduct of her practice on her employer's behalf." Accordingly, the high court reversed the appeals court's judgment and granted the Times' motion to dismiss.

A dissenting opinion argued that Horn had stated a claim for breach of contract because the Times had an obligation of good faith and fair dealing, and appeared to have restructured the medical department to get rid of Horn and the other physician who also refused to turn over employee medical records without the employee's consent.

Horn v. The New York Times, No. 20, 2003 WL 443259 (N.Y. Feb. 25, 2003) (10 pages).

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