Hansen v. Jackson (Summary)

PHYSICIAN EMPLOYMENT

Hansen v. Jackson, No. 13-14-00039-CV (Tex. Ct. App. Nov. 6, 2014)

fulltextThe Court of Appeals of Texas affirmed in part and reversed in part a lower court’s dismissal of a cardiovascular (“CV”) surgeon’s breach of contract, business disparagement, and tortious interference claims against a hospital. The CV surgeon was hired by a third-party employer to work exclusively at a hospital. The CV surgeon’s contract was for a five-year term. The third-party employer could only terminate the CV surgeon for cause during the first three years, then without cause for the remainder of the contract if “annual practice losses” exceeded $500,000. Furthermore, the CV surgeon was guaranteed due process rights if he was terminated for cause.

Two years into his contract, the hospital was acquired by a system. The system’s vice president recommended that the hospital terminate the CV surgeon’s contract based on his high “clinic losses” as compared to his base annual salary of $750,000. Around this time, the CV surgeon began feuding with the hospital’s cardiologists. The hospital requested that the third-party employer terminate the CV surgeon’s contract, citing his behavior with the cardiologists and the fact that his “clinic losses” were over the $500,000 threshold. The CV surgeon brought suit claiming that (1) the third-party employer breached their contract, (2) the hospital damaged his economic interests by disparaging him, and (3) the hospital interfered with his contract with the third-party employer.

While a trial court granted summary judgment in favor of the hospital, the appellate court held that the CV surgeon’s breach of contract and tortious interference claims should proceed to trial. The appellate court explained that the third-party employer did not conclusively establish the grounds on which it terminated the CV surgeon. If he was terminated for cause, then the CV surgeon was entitled to a due process hearing. If he was terminated without cause, then the third-party employer did not present evidence that “clinic losses” were actually “practice losses” as stated in the contract. Moreover, this ambiguity could prove that the hospital intentionally interfered with the CV surgeon’s contract. However, the ambiguity was not enough to show that the hospital acted with malice, as is required for a business disparagement claim.