Why Termination Disputes Occur

Termination disputes can lead to major headaches for healthcare providers, including lengthy and expensive lawsuits. When someone is terminated from their position, they may not take the news in stride and can contest the termination. While it is impossible to prevent disputes when someone is terminated, there are steps that healthcare providers can take to minimize the risk of disputes. Here is what healthcare providers should keep in mind regarding termination to avoid potential disputes.

Unclear Employment Contracts

One of the leading causes of termination disputes in healthcare is unclear or incomplete employment agreements. Contracts that fail to clearly define “for cause” termination, notice requirements, or performance expectations create significant room for disagreement.

Common contract issues include:

• Vague definitions of “cause” for termination
• Lack of clear performance metrics or productivity standards
• Unclear notice and cure periods for alleged deficiencies
• Inconsistent language regarding credentialing or privileging requirements
• Missing or unclear non-compete and restrictive covenant clauses

Employers should:

• Clearly define “for cause” termination with specific, detailed examples to avoid ambiguity
• Establish measurable performance and productivity standards that employees can realistically understand and meet
• Include clear notice and cure periods so employees know how long they have to correct deficiencies
• Spell out credentialing and privileging requirements to prevent confusion about job qualifications and responsibilities
• Use precise and consistent contract language to avoid conflicting interpretations of terms
• Ensure non-compete and restrictive covenant clauses are clearly written and compliant with state law
• Conduct regular legal reviews of physician employment agreements

Differential Policy Enforcement/Perceived Favoritism

Policies are only as effective as their implementation. Employees often compare their treatment with that of their coworkers, and when disciplinary measures appear arbitrary, inconsistent, or influenced by perceived favoritism, they may conclude that unlawful motives played a role in the employer’s decision-making. Even the appearance that certain employees receive preferential treatment can undermine trust in the fairness of workplace policies and increase the likelihood of complaints or legal challenges. Inconsistent enforcement can take many forms, including issuing different disciplinary measures for similar conduct, overlooking violations by favored employees, deviating from established procedures without explanation, or applying attendance standards unevenly.

Employers should:

• Apply workplace policies consistently and base disciplinary decisions on objective, job-related factors
• Train supervisors on proper policy enforcement and the risks associated with actual or perceived favoritism
• Document the reasons for disciplinary actions, including any factors that justify different outcomes
• Follow established procedures and explain any necessary deviations
• Periodically audit disciplinary practices to identify patterns, unintended disparities, or inconsistencies requiring corrective action

Lack of Documentation

Lack of documentation is a major contributor to employment disputes in healthcare organizations. Disputes often arise when there is insufficient written evidence showing that an employee was notified of performance or behavioral concerns. Without clear records, it becomes difficult to demonstrate that the employee was given a fair opportunity to improve. Proper documentation, including written warnings, performance evaluations, and improvement plans, helps establish a clear timeline of issues and corrective actions. Maintaining consistent and detailed records also protects employers in the event of legal challenges or termination disputes.

• Maintain comprehensive and accurate records to support decisions, ensure consistency, and reduce risk in disputes or complaints
• Ensure documentation is timely, factual, and aligned with company policy and legal requirements
• Record performance evaluations and regular review outcomes
• Document coaching and counseling sessions, including dates and key points discussed
• Issue and retain written warnings when disciplinary action is taken
• Develop and track corrective action plans, including follow-up steps and progress
• Track attendance concerns and identify patterns of absenteeism
• Record policy violations and corresponding disciplinary outcomes
• Take note of employee responses to discipline, including explanations, objections, and follow-up actions

Claims of Retaliation 

Healthcare employees are sometimes legally required to, or feel strongly about, raising concerns about patient safety, billing practices, staffing levels, infection control procedures, workplace harassment, and regulatory compliance. When an employee is terminated after engaging in protected activity, questions can arise regarding why the employee was let go.

The timing of a termination can significantly influence how a dispute unfolds. If an employee is dismissed shortly after making a complaint, they may argue that the termination constituted unlawful retaliation.

Employers should:

• Treat employees consistently and avoid holding people who raise concerns to a different standard than everyone else
• Make sure there are clear, documented reasons for termination based on performance, conduct, or policy violations—not the employee’s complaint.
• Address employee concerns promptly and take complaints seriously, documenting how they were reviewed and resolved
• Avoid making termination decisions in the heat of the moment or immediately after an employee raises an issue, unless there is a clear and legitimate reason.
• Have human resources or legal counsel review proposed terminations involving employees who recently engaged in protected activity
• Keep records of performance discussions, coaching, disciplinary actions, and policy violations that support the decision
• Train managers on what retaliation is, how to avoid it, and how to handle employee complaints fairly and professionally

Claims of Discrimination

Some employees who are fired may claim that they were discriminated against by their employer. Common protected categories include:

• Race
• Gender/Gender Identity
• Sexual Orientation 
• Age
• Disability
• Pregnancy or family medical leave
• Religion 
• National origin

Employers should: 

• Apply consistent termination and disciplinary policies across all employees
• Document all performance issues, warnings, and corrective actions clearly
• Ensure decisions are based on legitimate, job-related performance factors only
• Train managers on anti-discrimination laws and proper workplace conduct
• Review termination decisions with HR or legal counsel before final action
• Maintain equal treatment regardless of protected characteristics such as race, gender, age, or disability
• Keep thorough records to demonstrate fair and objective decision-making in all employment actions

Contact an Experienced Healthcare Litigation Attorney 

Termination disputes in healthcare can quickly escalate into complex legal claims. A fired employee can assert a variety of claims against the healthcare organization, all of which can expose the organization to significant liability. An experienced healthcare law attorney can help healthcare organizations in the first place by reviewing contracts and policies. In the event of a lawsuit, healthcare law attorneys can help to develop a defense strategy and resolve claims, preventing small disputes from becoming costly litigation. Contact us for immediate assistance.