In re Girard Medical Center

128 B.R. 938, 1991 Bankr. LEXIS 980, 1991 WL 131988
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedJune 28, 1991
DocketBankruptcy No. 90-10804S
StatusPublished
Cited by1 cases

This text of 128 B.R. 938 (In re Girard Medical Center) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Girard Medical Center, 128 B.R. 938, 1991 Bankr. LEXIS 980, 1991 WL 131988 (Pa. 1991).

Opinion

MEMORANDUM

DAVID A. SCHOLL, Bankruptcy Judge.

Dr. Jay H. Davidson (“the Claimant”) filed a Proof of Claim (No. 19)1 in the amount of $3,846.25 for “any unpaid benefits” arising out of his allegedly wrongful discharge as the Debtor’s “Chief of Medicine” pursuant to a written Memorandum of January 22, 1990, from William Vazquez, the Debtor’s President (“Vazquez”).

Vazquez testified for the Debtor that he was hired in April, 1988, at a time when the Debtor was in danger of losing its accreditation as a medical facility from the Commonwealth and had lost the confidence of its patient community. Pursuant to a study by a state commission conducted in connection with the Debtor’s licensure, Vazquez, at a meeting of the Debtor’s Patient Services Committee (“the PSC”) of November 27, 1989, recommended dismissal of the Claimant as Chief of Medicine (although not as a staff member). The PSC agreed to this action, with a directive that Vazquez handle the dismissal in such a fashion as to avoid professional discredit to the Claimant in light of his association of over 40 years with the Debtor.

Unfortunately, on January 22, 1990, before Vazquez had been able to reach a resolution with the Claimant, the Claimant engaged in a boisterous dispute with the Debtor’s Medical Executive Committee (“the MEC”) resulting from his refusal to name a staff member whom he intended to discipline. Therefore, the MEC directed Vazquez to dismiss the Claimant immediately, thus resulting in the Memorandum noticing his termination.

Thereafter, at a meeting of the Debtor’s full Board of Directors of April 16,1990, of which the Claimant received no prior notice, the Board ratified the Claimant’s discharge.

The Debtor’s Medical Staff Bylaws contained two provisions relative to dismissal of parties holding positions such as the Chief of Medicine. The first, 1111.2.1(c), provides that removal “may be initiated by the Board ... pursuant to Section 9.3.” The Second, ¶ 9.3.1, provides that removal for grounds unrelated to professional conduct “may be accomplished in accordance with the usual personnel policies of the hospital.” The Debtor’s corporate Bylaws state that the dismissal of any such official is subject to review upon written request by the party dismissed within five days after the Board action is taken.

The Claimant argues that his employment was terminated without his being given procedural rights afforded him by the two sets of Bylaws. He did not argue that the Debtor lacked substantive basis for its actions. The damages claimed are his salary of $50,000 annually from January 22, 1990, to the date of his resignation from the Debtor’s staff in September, 1990.

Pennsylvania law provides that “[ajbsent a statutory or contractual provision to the contrary, the law has taken for granted the power of either party to terminate an employment relationship for any or no reason.” Geary v. United States Steel Corp., 456 Pa. 171, 175, 319 A.2d 174, 176 (1974). See, e.g., Carlson v. Arnot-Ogden Memorial Hospital, 918 F.2d 411, 414 (3d Cir.1990); Smith v. Calgon Carbon Corp., 917 F.2d 1338, 1341-42 (3d Cir.1990), cert. denied, — U.S.-, 111 S.Ct. 1597, 113 L.Ed.2d 660 (1991); and In re Frymire, 96 B.R. 525, 533-34 (Bankr.E.D.Pa.), vacated in part & aff'd in part sub nom. Frymire v. PaineWebber, Inc., 107 B.R. 506 (E.D.Pa.1989). This body of law is known as the “at will doctrine.” Id. It is applicable here because the Claimant has not alleged that he was employed under a contract of a definite duration, which is an exception to the doctrine. See Frymire, [941]*941supra, 96 B.R. at 534-37. The only other exception to the doctrine as a controlling principle of (lack of) employee rights is a class of circumstances where it can be found that the employee’s discharge was against public policy. Smith, supra, 917 F.2d at 1342-46; and Geary, supra, 456 Pa. at 184, 319 A.2d at 180. However, Smith, supra, notes that in only a few instances have Pennsylvania courts sustained wrongful discharge claims based on public policy considerations. 917 F.2d at 1343.

The class of cases which we find most analogous .to the instant case involve circumstances where employees have attempted to assert that company policies, as delineated in certain employee or personnel handbooks, “constituted promises rising to the level of contractual obligation[s].” Ramsbottom v. First Pennsylvania Bank, N.A., 718 F.Supp. 405, 409 (D.N.J.1989). The employees in these cases have argued that their respective employers’ failure to abide by the policies or procedures set forth in handbooks gives rise to a cause of action of the employees for breach of contract. See, e.g., id.; Morosetti v. Louisiana Land & Exploration Co., 522 Pa. 492, 564 A.2d 151 (1989); Banas v. Matthews Int’l Corp., 348 Pa.Super. 464, 502 A.2d 637 (1985) (en banc); and Richardson v. Charles Cole Memorial Hospital, 320 Pa.Super. 106, 466 A.2d 1084 (1983).

In Ramsbottom, a New Jersey district court applied Pennsylvania law to an employee’s claim that his employer’s distribution of a policy manual bound the employer to contractually adhere to the policies and procedures outlined therein. The court viewed the “at will presumption” as a status where there already exists a “contract between the [parties], the terms of which were that [the employee] could be discharged for any or no reason.” 718 F.Supp. at 409, quoting Martin v. Capital Cities Media, Inc., 354 Pa.Super. 199, 216, 511 A.2d 830, 838 (1986), allocatur denied, 514 Pa. 643, 523 A.2d 1132 (1987). Furthermore, the court construed that presumption to mean that “neither party is bound to follow any particular procedure or decision making process in terminating the employment.” 718 F.Supp. at 409.

The court in Ramsbottom distinguished the “handbook cases” from those which apply either of two exceptions to the at will doctrine, where there is a contract or if there is a contrary public policy, viewing the theory involving handbook policies as one intended to “supplant the at will rule.” Id. This analysis, implying that, in handbook cases, it is reasoned that the handbook constitutes a contract which replaces the presumption, is supported by the holding of Morosetti, supra, where the Supreme Court of Pennsylvania stated that, for handbook policies to be binding against an employer, the elements of basic contract law must be proven. Specifically, the Morosetti court held that, for an employee to establish that policies expressed in a handbook evidence contractual obligations, it must be shown that the employer intended to offer such policies to the employee, perhaps as an “inducement for employment,” and that the employer intended to be bound by them. 522 Pa. at 495, 564 A.2d at 152— 53. Likewise, the court in Ramsbottom

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128 B.R. 938, 1991 Bankr. LEXIS 980, 1991 WL 131988, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-girard-medical-center-paeb-1991.