On Friday, June 16, 2017, the Texas Supreme Court unanimously upheld “without cause” termination provisions in physician employment contracts. The Court affirmed the trial court’s grant of summary judgment in favor of Community Health Systems Professional Services Corporation (PSC), Regional Employee Assistance Program (REAP), and other petitioners against Respondent Dr. Henry Andrew Hansen. Law360, covering the case throughout this appeal, noted “Hansen sued the hospital, REAP and PSC in 2010, after his ouster.” The trial court granted summary judgment for the hospital, REAP and PSC on Hansen’s breach of contract and tortious interference claims, “but the 13th Court of Appeals reinstated the claims in November 2014.” The Texas Supreme Court reversed the court of appeals and reinstated the trial court’s judgment rejecting Dr. Hansen’s “ouster” claims. See Texas High Court Nixes Suit Over Doc’s Ouster, Law360, June 16, 2017.
A team of lawyers from Serpe Jones Andrews Callender & Bell, led by B.J. Bell, successfully persuaded the Court that the reasons behind REAP’s firing of Dr. Hansen were irrelevant, because he was fired pursuant to a “without cause” termination provision. The Court recognized its “longstanding precedent” that a “party does not need ‘grounds’ to terminate a contract in accordance with a without-cause or termination-upon-notice provision[,]” reversed the court of appeals, and affirmed the trial court’s summary judgment on Dr. Hansen’s breach of contract claim.
Mr. Bell also effectively urged the Court to reverse the court of appeals’ finding that a representative of REAP and corporate officer of the hospital where Dr. Hansen treated patients was not entitled to summary judgment on Dr. Hansen’s tortious inference with a contract claim. The Court again drew upon established precedent to reason that “corporate agents should be free to advise the corporation without fear of third party claims of tortious interference.” Deciding for the first time how this principle applies to a no-evidence summary judgment, the Court affirmed the trial court that there was no evidence indicating the representative was anything but REAP’s agent “at all times relevant to Dr. Hansen’s lawsuit[,]” and there was no evidence the representative “was motivated only by his own personal interests” regarding the termination of Dr. Hansen.
Regarding Petitioner PSC, Kent Sullivan, of Jackson Walker, successfully argued PSC was legally justified in interfering with Dr. Hansen’s employment contract. The Court again agreed with the trial court, affirming summary judgment in favor of PSC based on its justification defense. Notably, the Court recognized that the “legal right to interfere with another’s contract” does not require a contractual business relationship. Rather, “[m]any kinds of business relationships can be formed without a contract and nonetheless give rise to a legal right to interfere with another’s contract[, including] that between an agent and principal.” Because PSC conclusively established an agency relationship with REAP for the purpose of providing advice regarding the hiring and firing of its physicians, “PSC has established a legal right to interfere with Dr. Hansen’s employment contract.” The Court completely reversed the court of appeals’ judgment and reinstated the trial court’s take-nothing judgment in favor of REAP, PSC, and the other Petitioners.
To view the Court’s opinion, go to http://www.txcourts.gov/media/1438272/141033.pdf
Serpe, Jones, Andrews, Callender, and Bell has offices in Houston, Texas, and Albuquerque, New Mexico. It maintains a reputation as one of the country’s leading law firms in medical malpractice defense and healthcare law.