Employment Law Matters : Employment Lawyer & Attorney : Ogletree Deakins Law Firm : Labor Law, Human Resources

A medical intern who misdiagnosed patients (including mistakenly identifying a patient as deceased), prescribed inappropriate medications or incorrect dosages, and who was “extremely argumentative” with his supervisors and co-workers was unable to perform the essential functions of his job and therefore, according to the 4th U.S. Circuit Court of Appeals, was not a qualified individual with a disability for purposes of the Americans with Disabilities Act. Shin v. Univ. of Maryland Medical System Corporation, 4th Circ., No. 09-1126, March 11, 2010.

Frank Shin, M.D., began a medical internship with the University of Maryland Medical System Corporation (UMMSC) in June of 2006. He initially performed his duties in a satisfactory manner, scoring 8 out of 10 for overall competence. However, after the first month, Dr. Shin’s scores began to fall, and by August, his overall rating was 3 out of 10. Further, at that point, Shin had to be “shadowed heavily” by resident doctors, in order to prevent medical errors. Shin’s workload subsequently was decreased to three patients, but support of other residents was still necessary.

Shin’s falling performance ratings prompted a face-to-face meeting with his supervisor to address the issues. At that meeting, an action plan was developed, further reducing Shin’s patient load to two, and requiring him to interact frequently with others who supported him. When after two weeks, Shin’s performance deteriorated further, he was urged to contact the Employee Assistance Program. On September 1, 2006, Shin was put on probation, and was required to meet certain criteria to remain in the internship program. Shin’s overall competence scores failed to improve during probation, with one of his supervising doctors noting that Shin was “should no longer be allowed to continue in a direct patient care role.”

UMMSC made assistance available to Shin by allowing him to see fewer patients with less complex medical issues, by asking residents to help with Shin’s workload, and by excusing Shin from participating in certain internship program requirements. Despite this assistance, Shin continued to have problems and ultimately was diagnosed with ADD with “significant impairment in visual-spatial reasoning and visual memory.” Although Shin sought expert help, in March 2007, his own doctor determined that Shin had reached maximum medical improvement, but was unfit to return to work as an intern. UMMSC then terminated Shin’s employment. That termination was upheld after an internal appeal procedure held in June 2007.

Dr. Shin ultimately filed a lawsuit against UMMSC and Dr. Wolfsthal under the ADA, alleging discriminatory discharge, and failure to provide a reasonable accommodation. The district court granted summary judgment in favor of the defendants. That decision was upheld by the Fourth Circuit. (Note that the Fourth Circuit reviewed the case under the “old” ADA, because the ADA Amendments Act, which took effect on January 1, 2009, was not applied retroactively.)

For both wrongful termination and failure to accommodate claims, a plaintiff must establish that he or she was a “qualified individual with a disability” in order to be eligible for the protections offered under the ADA. That Act defines a “qualified” individual as someone with a disability who, “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” Therefore, in order to survive a motion for summary judgment, Shin had to show not only that he was disabled, but that he qualified for the protections of the ADA.

To prove that he was qualified, Shin had to show that he was able to fulfil the essential functions of his job. Those essential functions, in essence, were “to provide competent medical care to patients with efficiency and reasonable autonomy.” The available evidence and testimony clearly indicated various problems and concerns related to Shin’s performance of those functions. The Court held that Shin was unable to perform the essential functions of his job and, therefore, that he was not qualified to bring a lawsuit under the ADA. The Court went a step further, and addressed Shin’s claim that he would have been “qualified” had UMMSC provided certain requested accommodation, including a permanent reduction in the number of patients for whom Shin was responsible. According to the Court, the ADA does not require an employer to assign an employee to “permanent light duty” or to reallocate job duties in order to change the essential functions of a job. On that basis, the Court held that no reasonable jury could conclude that a reduced work load was a reasonable accommodation under these facts.

According to the Fourth Circuit, Dr. Shin was not a qualified individual with a disability for purposes of the ADA - because he was not able to perform the essential function of his job - and his requested accommodations were unreasonable under the circumstances. Therefore, Shin was unable to support his claims under the ADA. With many hospital systems moving to an “employment” model for physicians, it is critically important that hospital administrators and managers understand the employment-law implications of actions involving individuals in protected categories, and understand that ADA claims typically must be reviewed on a case-by-case basis.
 

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On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act, which contains more than $17 Billion in tax credits aimed to stimulate employment, and includes $20 Billion for highway and transit infrastructure programs. One of the most important provisions for businesses is a tax credit for hiring from the ranks of the unemployed.
Under the HIRE Act, the employer of a “qualified employee” is excused from paying the employer match for the 6.2% Social Security portion of that employee’s wages in 2010. A qualifying employee is one who is hired after Feb. 3, 2010 and before Jan. 1, 2011, is not hired to replace another employee, is not related to the employer, and certifies under penalty of perjury that he or she has not been employed for more than 40 hours during the 60-day period ending on the date that employment begins with the new employer. This incentive can save the employer up to $6,621.60 for each qualified employee hired (6.2% of the maximum Social Security withholding for 2010), with increased savings for hiring qualified veterans, whose maximum Social Security withholding amount is higher. Employers also can receive a tax credit on their 2011 return for each new employee hired and retained for 52 weeks under certain criteria; that credit is the lesser of $1,000 or 6.2% of the wages paid to the employee for those 52 weeks.
These tax incentives are meant to spur job creation, especially for small businesses who are undecided about whether to begin to ramp up company-building efforts in light of recent economic difficulties. In addition, the Act includes a one-year extension of expensing thresholds so that small businesses may elect to write-off up to $250,000 of certain capital expenditures (subject to a phase-out once those expenditures exceed $800,000) in 2010 in lieu of depreciating those costs over time. The goal of that provision is, of course, to provide an incentive to businesses to invest immediately in equipment and inventory to jump-start economic activity.
The Act also extends current federal aid for certain highway programs, saving existing jobs associated with that work. Further, it establishes a new Build America Bonds program that will provide an optional direct subsidy for bonds issued for certain school and energy projects.

One key revenue source for the Act’s programs is a limitation on the ability of multinational corporations to shift assets among foreign institutions in order to minimize withholding tax. In 2004, Congress provided to certain taxpayers an election to take advantage of a rule for allocating interest expense between U.S. sources and foreign sources for purposes of determining that taxpayer's foreign tax credit limitation. The phase-in of that rule previously was delayed a number of times. The HIRE Act further delays the implementation to 2021, which is estimated to raise nearly $10 Billion over the next ten years.

Congressional leadership has called the HIRE Act the “first of several” laws intended to stimulate job creation. Employers should make themselves aware of the opportunities that are becoming codified in new laws, and should maximize on those opportunities for employing and re-employing qualified individuals. However, employers also must recognize that these new laws do not excuse employers from complying with existing anti-discrimination laws, and should be aware that increased hiring may also call for increased diligence in compliance with those laws.

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The Family and Medical Leave Act (FMLA) entitles an eligible employee to 12 weeks of leave, but only if the employee can show that he or she suffers from a “serious health condition that makes the employee unable to perform the functions of the position of such employee.” The Act defines a serious health condition as an illness or other condition that involves “continuing treatment by a health care provider.” The regulations related to the FMLA require a showing of at least three days of incapacitation plus treatment by a health care provider, in order to support a claim of serious health condition. However, those regulations do not require – or even mention – that expert medical evidence is necessary to prove those days of incapacitation, and courts have been left to determine the role that a doctor’s diagnosis plays in that proof. Recently, the 3d U.S. Circuit Court of Appeals held that a combination of personal and medical testimony regarding the illness of a medical practice receptionist was sufficient to raise a jury issue regarding whether that person suffered from a serious health condition sufficient to support a claim under the FMLA. Schaar v. Lehigh Valley Health Services, Inc., 3d Circ., No. 09-1635, March 11, 2010.

Rachael Schaar worked as a medical receptionist for the Lehigh Valley Physicians Business Services (Lehigh Valley) in Bethlehem, Pennsylvania, from December 2002 until her employment was terminated for violation of the group’s absence/call-off policy. On Wednesday, September 21, 2005, Schaar was diagnosed – by one of Lehigh Valley’s physicians - with a urinary tract infection, fever, and low back pain. The physician prescribed an antibiotic and an anti-inflammatory, and wrote a note advising Schaar’s supervisor that Schaar’s illness would prevent her from working on September 21 and 22. Schaar taped the note to her supervisor’s door and went home. Consistent with that note, Schaar took September 21 and 22 as paid sick days. She previously had scheduled vacation days for Friday, September 23, and Monday, September 26, and returned to work on September 27, claiming that she had spent the weekend sick in bed, and had felt well enough to get up and around only on Monday. Schaar did not request FMLA leave for her absence, nor did she ask to have her vacation days converted to sick days. Although Schaar’s supervisor initially said that Schaar could be fired for failing to call off on her two sick days, she subsequently told Schaar that the decision to leave a note in lieu of calling off was not a terminable offense. Six days later, however, Schaar was terminated, and was informed that the termination was based on “never calling off from work,” along with certain performance issues.

Schaar sued Lehigh Valley and its parent corporation, claiming interference with her FMLA rights. In its motion for summary judgment, Lehigh Valley asserted that Schaar has failed to prove that she was “incapacitated” for three days, as required under the FMLA. The lower court granted that motion, finding that because she had not presented expert medical testimony establishing three days of incapacity, Schaar has failed to prove that she suffered from a “serious medical condition.” On appeal, the Third Circuit addressed the issue of whether Schaar presented evidence that she was incapacitated for more than three days, and the question of whether she had to establish that incapacitation through medical evidence.

Courts have answered those questions in three ways, holding: (1) that the supporting evidence used to establish incapacity has to come exclusively through a medical provider; (2) that lay testimony, standing alone, is sufficient to establish incapacity; and (3) lay testimony can be used to supplement a medical professional’s testimony or evidence regarding incapacity.

In spite of the fact that district courts within the Third Circuit previously have used the first approach, the Third Circuit has established, through this decision, that lay testimony can create an issue of fact regarding a 3-day incapacitation, so long as medical evidence has been proffered to establish the underlying medical condition. The Court points out that while the subject DOL regulation does not speak specifically to whether medical testimony is required, a related regulation requires the testimony of a health care provider in order to determine when an employee is “unable to perform the functions of the position,” thereby making medical evidence a necessary element of an employee’s case. However, because there is no language in the regulations to exclude all lay testimony regarding the length of any incapacitation, the Third Circuit would not categorically exclude such evidence.

Therefore, while the Court has rejected the approach taken by the Fifth and Ninth Circuits (which each have held that lay testimony alone is sufficient to create a genuine issue of material fact regarding “serious health condition”), it has determined that such evidence can be sufficient if it is offered in combination with medical evidence linking incapacitation to the subject health condition. Because of the FMLA’s administrative complexities, employers should review requests on a case-by-case basis, including a review of both medical and lay information, before rejecting a claim for FMLA leave.
 

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Congress enacted the Uniformed Services Employment and Reemployment Rights Act (USERRA) to encourage non-career service in the uniformed services, by minimizing the disadvantages to civilian employment which can result from such service. An employer violates the USERRA if an adverse action is taken against an employee, and the employee’s membership in the armed services is a “motivating factor” in that action – unless the employer can prove that it would have taken the same action in the absence of that membership. In an unpublished opinion, the 11th U.S. Circuit Court of Appeals held that an Alabama National Guard member who was fired from his job at an auto assembly plant was unable to establish that his Guard service motivated his firing. Dees v. Hyundai Motor Manufacturing Alabama, LLC, 11th Cir., No. 09-12107, February 26, 2010.

Jerry Leon Dees was a veteran and a member of the National Guard when he was terminated from his employment with Hyundai. He sued the company, claiming that he was discriminated against and harassed because of that status, and that he ultimately was fired because of his National Guard obligations. The district court granted summary judgment in favor of Dee’s claims, and the Eleventh Circuit affirmed that decision on appeal.

To establish a prima facie case under the USERRA, an individual must show that his protected military status was a motivating factor in the adverse action of which he complains. The status need not be the sole cause so long as it is one of the factors relied upon, taken into account, or considered by the employer. Courts may infer discriminatory motivation under the USERRA from a variety of factors, including proximity in time between the employee’s military activity and the adverse employment action suffered, inconsistencies between the proffered reason and the employer’s actions, expressions of hostility by decision makers toward protected military status, and disparate treatment of protected employees when compared to similarly situated non-protected employees. Unless the employee meets this burden, his case cannot go forward. Once that burden is met, the burden shifts to the employer to prove that legitimate business reasons for the action taken would have induced the employer to act, even in the absence of the individual’s military service.

In Dee’s case, the district court found that Dees failed to establish that the Company relied upon, took into account, or conditioned its decision to fire him on the basis of his military service. Dees testified that he had no direct evidence that his military status motivated his termination, and was not fully aware of who was involved in the decision to terminate him. In short, Dee’s allegations were based upon insufficient conclusory statements that were not actual “evidence” of discrimination. In response to Dee’s assertions that two supervisors “harassed” him about his military obligations, the Court specifically pointed out that Dee’s termination was implemented only after an independent investigation by the Company of his performance issues, and that no supervisor’s discriminatory recommendation was the direct cause of the firing.

This case provides to employers two different lessons for avoiding liability under the USERRA. First, employers must be fully aware of the Act, its obligations, and its broad scope. An employee alleging violation of the USERRA does not have to prove that his or her military service was the only reason for an adverse action – only that such service was one of the motivating factors. Therefore, in order to avoid liability under the USERRA, employers should be particularly careful to fully review employment decisions related to military service members to assure that the decisions are based upon business-related criteria, and that military service is not a motivating factor in any work-related decision. The second lesson is that in this case, the Company’s independent investigation of Dee’s work performance convinced the Court that prior remarks alleged to have been made by certain supervisors did not, therefore, form the basis of the termination decision. The lesson here is that a complete and independent investigation, fully documented and focused upon business-related criteria, can help an employer to support the affirmative defense necessary to defeat liability under the USERRA.
 

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Under certain circumstances, 42 U.S.C. §1981 (Section 1981) creates a federal cause of action for individuals claiming intentional racial discrimination. To support such a claim, a plaintiff must allege that he is a member of a racial minority, and that he was discriminated against within a particular group of activities set forth in the statute. Those activities include the right to “make and enforce contracts . . . as is enjoyed by white citizens.” The 11th U.S. Circuit Court of Appeal recently dismissed the claims of a physician who claimed that the suspension of his medical staff privileges violated rights protected by Section 1981, holding that such privileges did not constitute contractual rights as defined by the statute. Jimenez v. Wellstar Health System, 11th Cir., No. 09-10917, February 18, 2010.

Dr. Omar F. Jimenez, an African-American physician with a specialty in neurosurgery, held medical staff privileges at Wellstar Health System in the state of Georgia. In January 2006, Jimenez was asked to appear before Wellstar Surgery Department’s Medical Care Evaluation Committee to address a number of complaints received by the Committee regarding Jimenez’ medical performance. The complaints included allegations that Jimenez had failed to respond promptly to emergency room calls, had failed to make patient rounds in a timely manner, and had failed to manage certain surgeries appropriately. Based on those allegations, Wellstar suspended Jimenez’ medical staff privileges, which meant that Jimenez was precluded from treating patients at Wellstar’s hospitals. Although Jimenez initially requested a hearing on the suspension, a year went by within which no hearing was held, for reasons for reasons not explained in the Court’s opinion. At that point, Jimenez withdrew his request.

Jimenez ultimately filed a federal law suit, including a claim under Section 1981 alleging race discrimination based upon contractual rights. He claimed that Wellstar discriminated against him when it suspended his privileges and when it delayed a hearing on that suspension, and that those privileges established a contract between Jimenez and Wellstar. The district court dismissed the lawsuit for Jimenez’ “failure to state a claim,” and the case was appealed. The Eleventh Circuit upheld the dismissal, finding that the suspension of Jimenez’ medical staff privileges did not violate rights protected under Section 1981.

Wellstar’s policies include specific language that membership on the system’s medical staff “does not create a contractual relationship between Wellstar or any Medical Staff and the Medical Staff Member.” In addition, medical staff members at Wellstar must meet certain minimum objective criteria, and failure to do so can result in automatic termination of medical staff privileges, which runs counter to a typical contractual relationship. Importantly, under Georgia state law, medical staff bylaws do not create a per se contractual right to the continuation of medical staff privileges. According to the Court, interpreting the bylaws as a contract in Jimenez’ case would run counter to the state’s policy of allowing a hospital to suspend or withhold privileges from doctors that it believes are unqualified to serve on its medical staff. Therefore, Jimenez did not the possess the contractual relationship necessary to support his Section 1981 claim.

It is noteworthy that because Jimenez was not an employee of Wellstar, he was unable to base his claim for racial discrimination on Title VII of the Civil Rights Act, the federal “anti-discrimination” statute which prohibits race and national origin discrimination (as well as gender and religious discrimination) by employers against employees. Had Jimenez been a direct employee of the hospital system, the fact that his medical staff privileges did not constitute a contract would not have precluded a federal claim by Jimenez, because Title VII would have been available to him. Health care providers that are moving toward an employment model with physician staff members should take this issue into consideration and should assure that managers and supervisors are trained to recognize and resolve complaints of discrimination when they arise, in order to avoid legal liability under Title VII, regardless of whether Section 1981 applies.
 

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