Bonzani v. Goshen Health Sys., Inc. — May 2020 (PDF)
FAILURE TO INCLUDE ARBITRATION PROVISION IN SEPARATION AGREEMENT PREVENTS HEALTH SYSTEM FROM INVOKING EMPLOYMENT AGREEMENT ARBITRATION CLAUSE
Bonzani v. Goshen Health Sys., Inc.
Case No. 3:19-CV-00586 DRL-MGG (N.D. Ind. May 11, 2020)
The United States District Court for the Northern District of Indiana denied a health system’s motion to compel arbitration in a dispute with a physician who left his employment pursuant to a separation agreement signed seven days before he was to have his final medical staff hearing at the hospital (related to the suspension of his privileges following a patient death and subsequent investigation of his care). The court did grant dismissal of a few of the physician’s other claims, but in large part left the physician’s claims intact on the basis that most of the claims required additional fact finding before they could be decided.
Of particular interest, in this case, was the court’s refusal to compel arbitration as requested by the hospital and health system. Notably, the physician’s employment agreement included an arbitration provision, but the separation agreement did not. According to the court, if the separation agreement is enforceable, then the parties would not be required to arbitrate because, by the separation agreement’s terms it replaces and terminates the employment agreement. In a catch-22 of sorts, the court noted that the physician argues that the separation agreement should be enforced to terminate the employment agreement but, on the other hand, also argues that the separation agreement should not be enforced because, amongst other things, he was in such an emotionally distraught state when it was presented to him (because of his suspension) that he could not understand it or read it. The court found the parties had not adequately briefed the issue of whether the separation agreement is enforceable and, therefore, concluded that the best way forward for the parties would be to conduct discovery on the enforceability of the separation agreement.