Fowler v. Coast to Coast Health Care Servs., Inc. — Feb. 2016 (Summary)

WHISTLEBLOWER, DEFAMATION

Fowler v. Coast to Coast Health Care Servs., Inc.
Civil Action No. 3:15-CV-00071-GFVT (E.D. Ky. Feb. 8, 2016)

The United States District Court for the Eastern District of Kentucky granted in part and denied in part a motion to dismiss claims of whistleblower retaliation and tortious interference with a business relationship brought by the former director of clinical services of a health system against a physician staffing organization. The staffing organization provided physicians to staff the emergency department of the health system. The director made numerous allegations of fraud and misconduct against the staffing organization and its employees. First, the director reported to the health system CEO that one of the emergency room physicians failed to treat a patient who came to the emergency room. Second, the director reported the staffing organization had made a fraudulent claim for services to her insurance provider because none of the staffing organization’s physicians performed any services in relation to her husband’s cataract surgery. Finally, the director sent a peer review report criticizing some of the staffing organization’s physicians to the medical executive committee of the health system. The following month, the director alleged the staffing organization threatened to terminate its contract with the health system because of the “slanderous and libelous comments by [the health system]’s staff.” Approximately one week later, the health system fired the director. The director filed claims of whistleblower retaliation and tortious interference with a business relationship against the staffing organization.

The district court granted the staffing organization’s motion to dismiss the former director’s whistleblower claim, holding the Kentucky whistleblower statute does not apply to a third party who is not an employer. However, the district court denied the staffing organization’s motion to dismiss the director’s tortious interference with a business relationship claim, holding that the director’s at-will employment status did not bar her from bringing such a cause of action.