Terminating Medical Practice Staff: Be Sure to Follow the Law

Physician practices face the same concerns as other employers across the country, especially when it comes to terminating an employee. Whether the employee is a receptionist or a physician, there are important laws and considerations to be made before ending any relationship:

1. What is the reason for the termination? Has it been documented? Has the employee been subject to discipline prior to termination if the issues have been ongoing (tardiness, refusal to see patients, etc.)? The more thorough the employee’s personnel file, the more helpful it will be. Make sure all interactions with the employee are properly documented along the way, and include formal warnings and other actions in the file. Don’t forget, if annual reviews are part of your HR approach, include any issues raised during the review in the file.

2. Does the employee have an employment contract? Employers need to review any signed documents before firing an employee. Is notice required? Is the employee entitled to an opportunity to cure the alleged breach? Make sure all employment contracts/policies are reviewed before a termination and be familiar with state law requirements. A contract properly prepared from the start, particularly when it comes to physician-employees, can avoid significant issues upon termination.

3. Regardless of whether a practice believes the reason for termination is legitimate, you can anticipate an employee may make a claim against the practice, such as for discrimination related to a “protected class,” such as: race, gender, age, sexual orientation, or disability. It’s important to be aware of potential claims on these grounds when it comes to replacing the employee. I always recommend talking with counsel before terminating someone who falls into a protected class, has a history of complaining/threatening to the practice, or has sued an employer in the past.

4. Claims of harassment are not uncommon upon termination or when it becomes clear termination is imminent. Make sure termination takes place with a witness of the same sex and listen for claims the terminated individual has been “harassed” or “abused.” Whether true or not, these words are “red flags” as to the employee’s mindset. I have dealt with employees who claim everyone in the organization, no matter the gender and no matter the topic, “harassed” them. More often than not this is a litigious employee.

5. When it comes to disabilities, employers must be cognizant of responsibilities under the Americans with Disabilities Act. Whether a physical or mental ailment, you may be required to take steps to accommodate an employee. This may involve making a reasonable accommodation, such as a change in schedule or the use of an assistant. Talk to counsel before letting an employee go who has, or may have, a disability.

6. If your practice fears that a lawsuit may be imminent, it’s advisable to consider termination without cause. This may involve paying the employee during a contractual notice period. However, this approach could cost substantially less than legal fees associated with a for-cause termination. In addition, consider the true cost to your practice in challenging a claim for unemployment, even if you have valid grounds. Challenging unemployment can be more expensive than the unemployment cost itself. In addition to not challenging unemployment, it’s often worth it to offer a small settlement in exchange for a release of all claims against the practice (real or imagined). This is something that should be discussed with counsel.

7. Terminated employees pose a risk to practices in terms of qui tam and other compliance claims. Make sure your practice has a proper and active compliance plan in place and be sure to document and respond to alleged violations. Also, be sure no employee has access to documents, e-mail or other practice data once termination is imminent. You may also wish to make arrangements to change alarm codes and passwords after termination.

Being an employer can be a challenging role. Make sure your practice is on top of its legal responsibilities and designate one individual in the practice to stay abreast of human resource issues. It’s always advisable to work with legal counsel on employment issues. Although it may be an unwanted expense, it’s also an investment that will likely pay off in the future.