Our Georgia-based physician employment health law firm advises and represents may physician employers, as well as many physician employees, with regard to factual circumstances that may raise breach of contract allegations. Breach of contract allegations can arise from application of the “for cause” termination provision. Almost every physician employment agreement will contain termination sections that separately deal with termination “without cause” and termination “for cause.”
Georgia Physician Employment Agreement Law Firm
In some circumstances, an employer may see a certain advantage in terminating a physician for cause. For example, the following situations may lead an employer to explore terminating a physician for cause:
- An actual good faith belief that facts and circumstances meet the definition of “cause” as defined in the contract;
- A desire to conclude the physician’s employment sooner than permitted under the “without cause” termination provision;
- A desire to avoid paying the tail insurance premium (where the contract specifies that the physician is obligated to pay the tail insurance premium if terminated for cause);
- A desire to avoid paying a production bonus (where the contract provides that if the physician is not employed on the last day of the year the physician is ineligible to receive a production bonus); and
- A desire to treat the physician in a hostile way due to conflict between the practice and the physician.
The first motivation is legitimate and typically would not create legal problems. But legal disputes can easily arise where an employer endeavors to manufacturer “cause” to terminate where “cause” as specifically defined in the contract does not clearly exist, as may be the case with the other examples above.
Such circumstances can have significant legal ramifications, as terminating a physician “for cause” is, generally speaking, a drastic measure. It is important for the medical practice and the physician that a “for cause” termination event be clear before that approach is taken. Under Georgia law, manufacturing cause to terminate an employed physician can constitute breach the Employment Agreement and the implied covenant of good faith and fair dealing imbedded within every Georgia contract. Capital Health Mgmt. Grp., Inc. v. Hartley, 689 S.E.2d 107, 112 (Ga. Ct. App. 2009).
Moreover, a medical practice that manufactures “cause” to terminate a physician can be found not only to have breached the Employment Agreement also liable for an award of litigation expenses, including attorneys’ fees, under O.C.G.A. § 13-6-11. Expenses of litigation and attorneys’ fees may be awarded pursuant to Section 13-6-11 if an employer acted in bad faith in its adverse employment action. See Atlanta Emergency Servs. LLC v. Clark, 761 S.E.2d 437, 441 (Ga. Ct. App. 2014). In Clark, the Georgia Court of Appeals did not overturn the jury verdict in favor of the physician-employee that included an award of attorneys’ fees under Section 13-6-11 based on the employer’s bad faith in terminating the physician-employee “immediately even though it lacked cause to do so.” Id. at 442.
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Our AV-rated health law firm has represented hundreds of medical practices and physicians in matters involving alleged breach of a physician employment agreement. We pride ourselves in our commitment to each customer and the highest level of customer services. We provide an initial consultation without charge for you to determine if our health law team is a fit for your legal need. Reach out to us today at info@littlehealthlaw.com or 404.685.1662. We look forward to connecting with you.