Recently, in a nonprecedential opinion, the 3rd U.S. Circuit Court of Appeals had the opportunity in the matter of Edwards v. Geisinger Clinic to rule on whether a physician had alleged sufficient evidence to support a breach of contract claim when his employment was terminated by his employer after about a year. The physician had a belief that his term of employment was guaranteed at least until he completed a four-year program necessary for board certification. In this nonbinding decision, the 3rd Circuit affirmed the U.S. District Court for the Middle District of Pennsylvania’s decision to dismiss the physician’s breach of employment contract claim by way of summary judgment.
The case demonstrates Pennsylvania’s strong presumption of employment-at-will, even when the discharged employee may face sympathetic circumstances. It further highlights that when a physician is entering into an agreement for employment and desires a certain minimum period of employment (whether to have sufficient time to obtain board certification or for other reasons), this must be clearly set forth in the formal documents.
Board Certification Sought
In relaying the facts of the matter, the court noted that it wrote “primarily for the parties” and it set forth only those facts necessary to its analysis. The plaintiff in the matter was Dr. Philip Edwards, who is a licensed physician from the United Kingdom specializing in interventional radiology. In 2006, Edwards was working in Kentucky under a temporary work visa. At that point in time, he was approached by the chair of Geisinger’s interventional radiology department to work at its clinic in Danville, Pa. According to the opinion, this meeting involved discussion about Edwards’ desire to obtain board certification from the American Board of Radiology, certification that was required by Geisinger. To obtain the certification, a physician must complete four years of uninterrupted employment at an approved program.
According to the opinion, in these discussions Edwards stated he understood the four-year requirement for board certification and that Geisinger required him to obtain that certification within six years.
Thereafter, in July 2006, Edwards received an offer letter from Geisinger. The letter reiterated its requirement for board certification and provided Edwards with four to six years to obtain the certification. The letter further indicated the offer was subject to Edwards’ execution of a practice agreement, which Edwards claims not to have received with the offer letter. Nonetheless, he executed the offer letter without the practice agreement, according to the opinion.
Later in July of that year, Edwards completed and signed Geisinger’s application for employment. This document stated various reasons for which Edwards’ employment could not be terminated. According to the opinion, such reasons included the following: advocating for medically necessary health care; protesting policies he believed to interfere with his ability to provide medically necessary health care; having a practice including patients with expensive medical conditions; or refusing to provide medical services on moral or religious grounds.
Sometime thereafter, Edwards’ visa expired and he returned to the United Kingdom. After the expiration, both Edwards and Geisinger communicated with the United States immigration authorities to obtain an H-1B visa for Edwards to work for Geisinger in the United States. Geisinger was also working on communicating to the American Board of Radiology on behalf of Edwards.According to Edwards, both parties were responsible to represent to the immigration authorities that Edwards had at least a three-year commitment with Geisinger to obtain the visa. However, according to the opinion, Edwards failed to produce evidence of actual communications. Rather, he relied upon the proposition that Geisinger “had to represent at least a three-year employment commitment, as the visa is for a minimum three-year period.”
The opinion said that, in 2007, after having obtained the visa, Edwards moved from the United Kingdom to Danville to commence employment for Geisinger. At some point on or shortly after commencing services, Edwards signed the practice agreement that had been referenced in the offer letter. The document explicitly stated that his employment was “at will” and terminable at any time by either party. According to Edwards, he was pressed to sign the practice agreement quickly and did not see that “at will” language. According to Edwards, he was called to sign the agreement when he “had a patient on the table.” He flipped through it and signed the agreement.
Thereafter, in 2008, Geisinger terminated Edwards’ employment. In September of that year, Edwards filed suit in the Middle District of Pennsylvania under theories of breach of contract, declaratory relief and specific performance and for a preliminary injunction (which request he withdrew). The district court dismissed Edwards’ specific performance claim. Roughly two years later, Geisinger moved for summary judgment on the breach of contract claim, which the district court awarded. Edwards then filed his appeal with the 3rd Circuit.
Third Circuit Affirms
As the 3rd Circuit was ruling on the propriety of a summary judgment dismissal, its review was plenary. The court ultimately affirmed the decision of the district court.
In arriving at its holding, the court first summarized the appellant’s arguments. The court stated his legal argument before it was that there existed a genuine issue of material fact as to whether he and Geisinger entered into an express contract for a definite term of employment. In so arguing, according to the court, he relied on the following facts: Geisinger had at various times emphasized the necessity of the four-year residency for board certification; there was no at-will disclaimer in the offer letter or the employment application; the employment application stated specific restrictions on Geisinger’s right to terminate; and that Geisinger represented to the American Board of Radiology and to the immigration authorities that it had committed to Edwards for a number of years. The court ultimately rejected each of these arguments.
Prior to addressing each argument, the court first summarized Pennsylvania law on employment, noting that employment at-will is presumed. In order to overcome the presumption, the court said, a party must demonstrate “‘clear and precise evidence’ that the parties intended to enter an employment contract for a definite term.” The court will look to the surrounding circumstances in analyzing the parties’ intent. The court reviewed that an employee’s “subjective expectation” of employment for a definite term does not demonstrate an employment contract of a set term. Likewise, an employer’s “hope” that an employee were to remain employed for a certain time would not demonstrate a contract for employment of a definite term.
The court found that both parties in this matter demonstrated the intent to enter into an at-will employment arrangement. In so finding, the court relied on the fact that both parties “willingly signed the practice agreement.” The court discarded any arguments that Edwards was unaware of the terms of the practice agreement, as ignorance is not a defense to a contractual obligation under Pennsylvania law.
The court next turned to each of Edwards’ individual arguments. It first held that Geisinger’s statements in its discussions with Edwards and in the offer letter relative to the four-year program requirement and the requirement to obtain board certification within six years were not sufficiently definite to “establish an express contract for a definite term.” The court noted these statements fell in the category of an employer’s hope that its employee would remain with it for a set period of time.
The court likewise rejected Edwards’ claim regarding the failure to provide a disclaimer about employment at-will in the offer letter and application, stating Pennsylvania law presumes employment at-will. The court further found that the application’s inclusion of various reasons for which Geisinger could not terminate employment did not overcome this presumption. Rather, the court stated that the listing of these nonterminables suggested that Geisinger actually reserved the right to terminate for other reasons.
The court lastly turned to the representations made to the American Board of Radiology and the immigration authorities. The court noted that the evidence in the record on which Edwards relies of representations to the board was the transmission of the offer letter. As to the communications with the immigration authorities, the court first stated that an H-1B visa “does not guarantee employment for the visa’s maximum duration.” The court further noted the lack of evidence in the record of any actual communications stating Edwards would be employed for any definite period of time.
Therefore, the court affirmed the district court’s dismissal of Edwards’ breach of contract claims.
Vasilios J. Kalogredis is the president and founder of Kalogredis Sansweet Dearden & Burke, a health care law firm, and Professional Practice Consulting Inc., a health care consulting firm, in Wayne, Pa. He can be contacted at 800-688-8314 or at BKalogredis@KSDBHealthlaw.com.
Karilynn Bayus is an associate at the firm. Her practice involves litigation of health care related matters. Bayus graduated from Temple University’s Beasley School of Law in 2006. She may be reached at KBayus@KSDBhealthlaw.com.