Edwards v. Geisinger Clinic (Full Text)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

PHILIP EDWARDS, M.D.,

Plaintiff,

GEISINGER CLINIC,

Defendant.

CIVIL ACTION No. 3:08-CV-1653

(JUDGE CAPUTO)

MEMORANDUM

Now before the Court is Defendant Geisinger Clinic’s (“Geisinger”) Motion to Dismiss

Plaintiff’s Complaint (Doc. 12). For the reasons set forth in detail below, the Defendant’s

motion will be granted in part and denied in part.

The Court has jurisdiction in this matter pursuant to 28 U.S.C. 1332.

BACKGROUND

On September 4, 2008, the Plaintiff, Dr. Philip Edwards, f iled a Complaint (Doc 1)

initiating the present action. In the Complaint, Dr. Edwards alleges the following.

Dr. Philip Edwards is a citizen of the United Kingdom and is a licensed physician

specializing in interventional radiology. (Compl., Doc. 1 ¶¶ 1, 5, 6.) Dr. Edwards was

recruited for employment with the Geisinger Clinic in Danville, Pennsylvania in early 2006.

(Id. ¶ 7.) At the time Dr. Edwards joined Geisinger, he and the chair of the department, Dr.

Dominick Conca, discussed and agreed that it was their mutual intent for Dr. Edwards,

through his employment with Geisinger, to become eligible for certification by the American

Board of Radiology (“ABR”). (Id. ¶ 8.) Certification by the ABR is a prerequisite for many

professional and academic appointments in the United States. (Id. ¶ 10.) Moreover,

Geisinger has a policy requiring all staff physicians hired after January 2002 to become

board certified. (Id. ¶ 11.)

In order to satisfy the prerequisites for board certification, Dr. Edwards needs to

complete four (4) years of uninterrupted practice in a hospital with an approved residency

program. (Id. ¶ 12.) Since Geisinger was in need of interventional radiologists, Drs. Conca

and Edwards agreed that Geisinger would create a four (4) year program for Dr. Edwards

that would meet the ABR requirements. (Id. ¶¶ 13-14.) It was further agreed that Dr.

Edwards would be given a medical staff appointment at Geisinger Medical Center. (Id. ¶

14.) Upon agreeing to this program, Dr. Conca communicated with the ABR, notifying them

that Dr. Edwards was committed to a four (4) year program. (Id. ¶ 15.) In a letter to Dr.

Edwards, dated July 5, 2006, Dr. Conca stated that Edwards’ board certification would

proceed as described by the ABR and that Dr. Edwards would be granted four (4) to six (6)

years from the date of employment to obtain board certification. (Id. ¶ 16; July 5, 2006

Letter to Edwards from Conca, Doc. 1, Ex 2.) Dr. Edwards further alleges that both he and

Geisinger entered into their employment relationship with the understanding that they were

entering into an agreement for a minimum of four (4) years. (Id. ¶ 21.) Edwards alleges

that due to this agreement, during the term of the contract, his employment could only be

terminated for cause. (Id. ¶ 23.)

At the time of his employment, Geisinger assisted Dr. Edwards in securing an H1B

visa. (Id. ¶ 18.) This is a visa that is valid for three (3) year periods, subject to renewal for

an additional three years. (Id.) Dr. Edwards H1B visa is conditioned on his continued

employment with his visa sponsor, Geisinger. (Id. ¶ 19.) Dr. Edwards cannot work for

another employer under this visa, and if his employment with Geisinger is terminated, he

is required to leave the United States within forty-eight (48) hours. (Id. ¶ 20.)

At the time Dr. Edwards initiated his employment with Geisinger, his fiancé (now wife)

was employed at Morgan Stanley in the United Kingdom. (Id. ¶ 24.) Understanding that

Dr. Edwards’ agreement with Geisinger would keep him in the United States for a minimum

of four years, his wife arranged to relocate her employment to the United States, and

obtained an L1 visa at her employer’s cost. (Id. ¶ 25.) Relying on the terms of the

agreement between Dr. Edwards and Geisinger, Dr. Edwards’ wife made a contractual

agreement to remain in her United States-based position until January 31, 2009. (Id. ¶ 28.)

Dr. Edwards alleges that, during his employment with Geisinger, the interventional

radiology division has been shorthanded and understaffed. (Id. ¶ 31.) Despite the

department’s difficulties in meeting the demands of its patients, Dr. Edwards consistently

received favorable performance appraisals, and in March of 2008 received an appraisal

rating his clinical skills as meeting or exceeding expectations in all areas. (Id. ¶¶ 32-33;

Annual Professional Staff Review 1/1/2007-12/21/2007, Doc. 1, Ex. 4.)

According to Dr. Edwards, in late May 2008, a representative of Geisinger accused

Dr. Edwards of dissuading candidates from taking positions with Geisinger. (Id. ¶ 34.) Dr.

Edwards denies making any such statements. (Id. ¶ 35.) In a letter dated May 30, 2008

from Richard Merkle, Geisinger’s Chief Human Resource Officer, Dr. Edwards was notified

that he has been involuntarily terminated, effective May 28, 2008, that he had a right to

request a hearing and review of this termination in accordance with Geisinger Human

Resources policy No. 440, and that his termination was converted to a suspension for up

to thirty (30) days during which Geisinger expected to resolve the hearing and review

process. (Id. ¶ 36; May 30, 2008 Letter to Edwards from Merkle, Doc. 1, Ex. 5.) Dr.

Edwards alleges that Geisinger has never suggested that it had good cause for terminating

his employment. (Id. ¶ 37.) Since May 30, 2008 to the present, Dr. Edwards has remained

on suspension with pay from Geisinger. (Id. ¶ 39.) In July 2008, Geisinger offered to

reinstate Dr. Edwards and he accepted that offer. (Id. ¶ 40.) Upon accepting this

reinstatement, Dr. Edwards, through his counsel, asked Geisinger if he could defer his

return to work in order to deal with a family medical emergency in the United Kingdom. (Id.

¶ 41.)

Dr. Edwards alleges that Geisinger neither granted nor denied the request, but rather

rescinded the offer to reinstate Dr. Edwards and insisted that the hearing and review

process pursuant to Geisinger Human Resources policy No. 440 proceed without further

delay. (Id. ¶ 42.) Dr. Edwards further alleges that during this hearing and review process,

Geisinger did not allow him to have counsel present during an interview, and did not allow

counsel to question witnesses or present arguments on Dr. Edwards’ behalf. (Id.) Dr.

Edwards alleges that this was part of a plan to control the hearing and review process,

thereby biasing the result of that process. (Id.) He further alleges that there are no

guidelines, standards or procedures governing the conduct of the appeal and review

process and that the process is left to the unfettered discretion of the participants, none of

whom have any legal training or expertise. (Id.) Dr. Edwards represents that he abided by

Geisinger Human Resources policy No. 440 only because he believed that he had no

choice but to do so or lose his right to challenge his termination with Geisinger. (Id. ¶ 44.)

And finally, Dr. Edwards states that he has, at all times, been ready, willing and able to

return to work at Geisinger and perform the functions of his position. (Id. ¶ 45.)

Dr. Edwards filed his Complaint with this Court on September 4, 2008 (Doc. 1) along

with a Motion for a Temporary Restraining Order (Doc. 2). In this Complaint, Dr. Edwards

articulates three counts against Defendant Geisinger Clinic. Count I alleges a breach of Dr.

Edwards’ employment contract by Geisinger and seeks declaratory relief; Count II alleges

a breach of Dr. Edwards’ contract for reinstatement by Geisinger and seeks specific

performance of that contract; and Count III seeks preliminary injunctive relief against

Geisinger’s pending termination of Dr. Edwards’ employment and salary. On September

8, 2008, the Court denied Dr. Edwards’ motion seeking a temporary restraining order (Doc.

5), and on September 12, 2008, Dr. Edwards informed the Court and counsel for the

Defendant that he withdrew his motion for preliminary injunction (Count III), without

prejudice (Doc. 9). The Court confirmed this withdrawal in an Order dated September 15,

2008. (Doc. 10.) On November 11, 2008, Defendant Geisinger Clinic filed a Motion to

Dismiss (Doc. 12) the remaining two counts of Plaintiff’s Complaint, and on November 18,

2008, filed an accompanying Brief in Support (Doc. 13). Dr. Edwards filed a Brief in

Opposition to Defendant’s motion on December 8, 2008. (Doc. 14.) Defendants did not file

a brief in reply. Accordingly, Defendants motion has been completely briefed and is

currently ripe for disposition.

LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the dism issal of

a complaint, in whole or in part, for failure to state a claim upon which relief can be granted.

Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint,

Plaintiff has not plead “enough facts to state a claim to relief that is plausible on its face,”

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), meaning, enough factual

allegations “to raise a reasonable expectation that discovery will reveal evidence of” each

necessary element. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008); see

also Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993) (requiring complaint to set forth

information from which each element of a claim may be inferred). In light of Federal Rule

of Civil Procedure 8(a)(2), the statement need only “give the defendant fair notice of what

the . . . claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 127

S.Ct. 2197, 2200 (2007) (per curiam). “[T]he factual detail in a complaint [must not be] so

undeveloped that it does not provide a defendant the type of notice of claim which is

contemplated by Rule 8.” Phillips, 515 F.3d at 232; see also Airborne Beepers & Video, Inc.

v. AT&T Mobility LLC, 499 F.3d 663, 667 (7 Cir. 2007).
th

In deciding a motion to dismiss, the Court should consider the allegations in the

complaint, exhibits attached to the complaint and matters of public record. See Pension

Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993), cert.

denied, 510 U.S. 1042 (1994). The Court may also consider “undisputedly authentic”

documents where the plaintiff’s claims are based on the documents and the defendant has

attached a copy of the document to the motion to dismiss. Id. The Court need not assume

that the plaintiff can prove facts that were not alleged in the complaint, see City of

Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 (3d Cir. 1998), nor credit a

complaint’s “bald assertions” or “legal conclusions.” Morse v. Lower Merion Sch. Dist., 132

F.3d 902, 906 (3d Cir. 1997).

When considering a Rule 12(b)(6) motion, the Court’s role is limited to determining

whether the plaintiff is entitled to offer evidence in support of the claims. See Scheuer v.

Rhodes, 416 U.S. 232, 236 (1974). The Court does not consider whether the plaintiff will

ultimately prevail. See id. The defendant bears the burden of establishing that the plaintiff’s

complaint fails to state a claim upon which relief can be granted. See Gould Elecs. v.

United States, 220 F.3d 169, 178 (3d Cir. 2000).

DISCUSSION

Applicable Substantive Law

The Court has subject matter jurisdiction in the current case due to the diverse

citizenship of the parties involved. 28 U.S.C. 1332(a)(2). Therefore, Pennsylvania

substantive law shall be applied in this case. Erie Railroad Co. v. Tompkins, 304 U.S. 64

(1938).

II.

Count I – Breach of Employment Contract

Defendants argue that Dr. Edwards’ breach of contract claim (Count I) fails because

he was an at-will employee. “In Pennsylvania, ‘the employment relationship is presumed

to be at-will unless the employee can overcome that presumption with evidence of definite

and specific terms of employment concerning length of employment or cause for

termination.’” Viloanti v. Emery Worldwide, 847 F. Supp. 1251, 1258 (M.D.Pa. 1994)

(McClure, J.) (quoting Engstrom v. John Nuveen & Co., Inc., 668 F. Supp. 953, 957

(E.D.Pa. 1987)).

The presumption may be overcome by express contract, implied in-fact
contract (that is, the surrounding circumstances of the hiring may indicate that
the parties did not intend it to be at-will), and additional consideration passing
from the employer (that is, if the employee bestows a legally sufficient benefit

or incurs a sufficient detriment for the benefit of the employer beyond the
services for which he was hired, a court may infer that the parties intended to
overcome the at-will presumption).

Id. (quoting Scott v. Extracorporeal, Inc., 376 Pa. Super. 90, 545 A.2d 334, 336 (Pa. Super.

1988)). “Great clarity is necessary to contract away the at-will presumption.” Greene v.

Oliver Realty, Inc., 363 Pa. Super. 534, 551, allocatur denied, 517 Pa. 607 (1987). “The

clearest manner in which a party can overcome the at-will doctrine is where the employer

and the employee have entered into a contract which expresses a definite term of

employment and forbids discharge in the absence of “just cause” or without first utilizing an

internal dispute resolution mechanism.” Rutherfoord v. Presbyterian-University Hospital,

417 Pa. Super. 316, 324 (Pa. Super. Ct. 1992).

Accordingly, in the context of Defendant’s Motion to Dismiss, the question currently

before the Court is whether the Plaintiff’s Complaint has made sufficient allegations of fact

to raise a reasonable expectation that discovery will reveal evidence reing the

presumption that Dr. Edwards was an at-will employee of Geisinger. Plaintiff’s Complaint,

along with documents attached to the Complaint as exhibits, makes several allegations

relevant to this question. Notably, Dr. Edwards alleges that Dr. Conca, a department head

at Geisinger, represented to the American Board of Radiologists that “Geisinger was

committed to a four year program by which Dr. Edwards would meet the Board’s

requirement.” (Compl., Doc. 1, ¶ 15.) Furthermore, Dr. Edwards has provided the Court

with a letter from Dr. Conca to Dr. Edwards stating that Dr. Edwards would “be granted 4-6

years from the date of employment to become board certified in view of the prescriptive

measures provided by the American Board of Radiology. . ..” (July 5, 2006 Letter to

Edwards from Conca, Doc. 1, Ex 2.)

The allegations in Dr. Edwards’ Complaint certainly do not satisfy the high burden

required to rebut the at-will employment presumption employed by Pennsylvania Courts,

but at this early stage of litigation, the “notice pleading” requirement of Federal Rule of

Procedure 8 and relevant interpretive case law, including the Supreme Court’s Twombly and

Erickson decisions, require that Dr. Edwards need only provide Geisinger with notice of his

claim and the grounds upon which it rests. Furthermore, the Court believes that the

allegations in the Complaint are sufficient to create a reasonable expectation that discovery

in this case–which would, presumably, include depositions of Dr. Conca and productions

of documents, including correspondence between Geisinger and the ABR–will reveal

evidence that Dr. Edwards and Geisinger had more than an at-will employment relationship.

Accordingly, the Court will deny Defendant’s motion with respect to Count I.

III.

Count II-Breach of Contract for Reinstatement

Defendant Geisinger Clinic presents two arguments in favor of dismissing Count II

of Plaintiff’s Complaint, which seeks specific performance of the July 2008 offer of

reinstatement. First, Geisinger argues that the alleged promise of reinstatement is

unenforceable for lack of mutuality of obligation. In the alternative, Geisinger argues that

Dr. Edwards possesses an adequate remedy at law and reasonably ascertainable

damages, a situation where Pennsylvania courts deny specific performance remedies. And

as a final alternative, Geisinger argues that the reinstatement agreement was a personal

services agreement and that Pennsylvania law prohibits courts from granting specific

performance of such agreements. While noting Geisinger’s first two arguments concerning

mutuality of obligation, damages and appropriate remedies, the Court observes that

Geisinger’s third argument questions whether this Court has the ability to grant the relief Dr.

Edwards seeks in Count II of his Complaint. Since a finding that the Court is unable to

provide the relief requested in Count II would predominate over the other two arguments,

the Court will first determine if Pennsylvania law prohibits courts from ordering specific

performance of personal services contracts.

“[U]nder Pennsylvania law, ‘a court of equity will not grant specific performance of

a contract for personal services.” Nicholas v. Pennsylvania State University, 227 F.3d 133,

146 (3d Cir. 2000) (quoting McMenamin v. Philadelphia Transportation Co., 356 Pa. 88, 51

A.2d 702, 703 (Pa. 1947)). Noting that Plaintiff’s Complaint and supporting documents

allege that Dr. Edwards and Geisinger entered into an employment contract, Defendants,

accordingly, argue that Dr. Edwards is not entitled to specific performance of this alleged

contract for personal services. (Def.’s Br. in Supp., Doc. 13, at 19-20.)

In response, Plaintiff argues that the McMenamin decision, upon which Nicolas was

based, is “clearly no longer good law” since courts applying Pennsylvania law regularly

order reinstatement of employees who were improperly discharged. (Pl.’s Br. in Opp., Doc.

14, at 19.) In support of this argument, Plaintiff cites to the Pennsylvania Supreme Court’s

decision in Pennsylvania State Police v. Pennsylvania State Troopers Association, 559 Pa.

586, 741 A.2d 1248 (Pa. 1999), a case where the court affirmed the decision of an arbitrator

reinstating two police officers after they had been fired for off-duty criminal conduct.

Similarly, Plaintiff cites to the Commonwealth Court of Pennsylvania’s decision in County

of Mercer v. Teamsters Local 250, 946 A.2d 174 (Pa. Commw. Ct. 2008), a case where the

court reversed an arbitration award and reinstated a prison guard accused of falsifying

reports and other improper conduct. Having reviewed each of the cited cases, the Court

believes that the current case is unique and distinguishable from both the Pennsylvania

State Troopers and Teamsters Local cases.

In Teamsters Local, a union filed a grievance on behalf of a prison guard who had

been terminated for cause. This grievance was processed through a contractual grievance

procedure and, ultimately, submitted to arbitration where a decision was reached in favor

of the prison guard. A trial court vacated and reversed the arbitrator’s award. Accordingly,

the question presented to the Commonwealth Court of Pennsylvania was whether the “trial

court erred as a matter of law in apply the extremely narrow scope of judicial review of a

labor arbitration award. . ..” Teamsters Local 250, 946 A.2d, at 178. In its analysis, the court

noted that “factfinding exceeds the authority of a court reviewing an arbitration award” and

that it was the “arbitrator’s role to interpret the terms of the [collective bargaining

agreement].” Id. at 183. Ultimately finding that the “Arbitrator’s award was rationally derived

from and drew its essence from the [collective bargaining agreement] and did not violate

public policy,” the court reinstated the arbitrator’s award, thereby reinstating the prison

guard to his former position.

Similarly, in Pennsylvania State Troopers, a case arising after two police officers

committed off-duty crimes and were subsequently terminated from their positions, the court

confronted a question of “what is the proper scope of review of an appeal from an

[statutorily enacted] grievance arbitration award.” Pennsylvania State Troopers, 559 Pa.,

at 591. The court’s analysis focused on the various policy considerations leading to the

Pennsylvania legislature’s statutory adoption of employment grievance procedures for

police and fire personnel, Id. at 591-92, and the appropriate role for courts reviewing

arbitration decisions arising out of this process, Id. at 592-593. The court took particular

care to note that its decision was not about whether it agreed with the arbitrator’s decision

to reinstate the two police officers, and stated that the questions presented specifically

“concern the application of existing legislation.” Id. at 594.

While the outcome of both cases resulted in the reinstatement of previously-

terminated employees, these cases do not support the proposition that Pennsylvania courts

may simply order specific performance of contacts for personal services. Rather, each case

addresses the proper scope of judicial review of arbitrators’ decisions resulting from either

contractually- or statutorily-established employment grievance procedures. While the case

currently before the Court does involve an on-going employment grievance review, it does

not present an issue involving the outcome and appropriateness of an arbitrator’s decision

arrived at through a negotiated and agreed upon grievance procedure. Accordingly, finding

no authority suggesting McMenamin’s clear statement that “a court of equity will not grant

specific performance of a contract for personal services,” 356 Pa., at 91, is no longer good

law, the Court finds that it is unable to grant the relief Dr. Edwards requests in Count II of

his Complaint. For this reason, the Court will grant Defendant’s motion with respect to

Count II of Plaintiff’s Complaint.

IV.

Counsel Fees

Finally, Defendant argues that this Court should dismiss Plaintiff’s requests for

counsel fees because there is no expressly provided statute or agreement between the

parties providing for fee shifting. (Def.’s Br. in Supp., Doc. 13, at 20.) Defendants support

this argument by citing to Corace v. Balint, which states that “‘[o]ver and over again [the

Pennsylvania Supreme Court has] decided there can be no recovery for counsel fee from

the adverse party to a cause, in the absence of express statutory allowance of the same.

. .’ or clear agreement by the parties, or some other established exception.” 418 Pa. 262,

271 (1965) (quoting Smith v. Equitable Trust Co., 215 Pa. 413, 417 (1906); citing

Fidelity-Philadelphia Trust Company v. Philadelphia Transportation Company, 404 Pa. 541,

548 (1961); Hempstead v. Meadville Theological School, 286 Pa. 493 (1926)).

Plaintiff responds that he “seeks only the right to ask for such remedy, depending on

the outcome of this litigation, if equitable considerations so require.” (Pl.’s Br. in Opp., Doc.

14, at 22.) Plaintiff further notes that “federal courts, in the exercise of their equitable

powers, may award attorneys’ fees when the interests of justice so require.” Hall v. Cole,

412 U.S. 1, 4-5 (1973) “The power to award such fees ‘is part of the original authority of the

chancellor to do equity in a particular situation,’ and federal courts do not hesitate to

exercise this inherent equitable power whenever ‘overriding considerations indicate the

need for such a recovery.’” Id. at 5 (quoting Sprague v. Ticonic National Bank, 307 U.S.

161, 166 (1939); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391-392 (1970); citing

Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967)).

Examining Plaintiff’s Complaint, the Court finds that Dr. Edwards has made

allegations of fact with respect to Count I to raise a reasonable expectation that the Court

may, with the benefit of additional facts elicited through discovery, exercise its equitable

authority and award attorneys fees. Accordingly, the Court will deny Defendant’s motion

to strike Plaintiff’s demand for attorneys’ fees in connection with Count I of the Complaint.

CONCLUSION

For the reasons detailed above, the Court will (1) deny Defendant’s motion to dismiss

Count I of Plaintiff’s Complaint, (2) grant Defendant’s motion to dismiss Count II of Plaintiff’s

Complaint, and (3) deny Defendant’s motion to strike Plaintiff’s request for attorneys’ fees.

Plaintiff’s Count I claim for breach of employment contract is the only claim remaining in this

case.

An appropriate order follows.

March 6, 2009
Date

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

PHILIP EDWARDS, M.D.,

Plaintiff,

GEISINGER CLINIC,

Defendant.

CIVIL ACTION No. 3:08-CV-1653

(JUDGE CAPUTO)

ORDER

Now, this 6th day of March, 2009, it is HEREBY ORDERED that Defendant’s

Motion to Dismiss (Doc. 12) is GRANTED in part and DENIED in part as follows:

(1)

(2)

Defendant’s motion to dismiss Count I of Plaintiff’s Complaint is DENIED.

Defendant’s motion to dismiss Count II of Plaintiff’s Complaint is

GRANTED.

(3)

Defendant’s motion to strike Plaintiff’s request for attorneys’ fees is

DENIED.

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge