Healthcare practices often employ doctors under formal employment agreements that set forth the parties’ respective rights and obligations. As illustrated by a recent case involving a Florida dentist, such employment agreements not only define what the practice can do, but also implicitly define what the practice cannot do under the agreement.
Nancy Havens is a dentist who had a five year employment agreement with Coast Florida, P.A. (“Coast”). Three years into the agreement, Coast suspended her without pay pending an internal investigation. Havens demanded that her compensation be reinstated during her suspension. When Coast refused, Havens resigned her employment and sued Coast.
The trial court dismissed the complaint, but the Second District Court of Appeal, in Nancy Havens, D.D.S. v. Coast Florida, P.A., Case No. 2D12-1047 (June 12, 2013), reversed and remanded the case to the trial court, ruling that Havens stated a claim for breach of the agreement. The result is that Coast may have to pay Havens out for the remaining two years of the agreement.
The reason? The agreement was silent on the issue of suspension. Ruling that the substantive right to suspend could not be read into the contract, the Second DCA noted that if there was an ambiguity on the right to suspend, the ambiguity must be construed against Coast, the drafter of the agreement.
So what did Dr. Havens do to prompt an internal investigation? The Second DCA’s opinion does not say, and it does not matter. Even if Dr. Havens engaged in egregious wrongdoing, her employment agreement did not give Coast the right to suspend her without pay. It is that simple. The employment agreement contained a “cause” termination provision. If Coast had cause to terminate Havens, it could have invoked that provision rather than suspending her without pay. Alternatively, Coast could have proposed to Havens that, with her consent, she would be suspended without pay while her behavior was investigated. Coast’s decision to suspend Havens without pay despite the agreement’s silence on this issue may cost the dental practice dearly.
For Florida healthcare employers, the lesson of the Coast Florida case is clear. Employers should not assume they have contractual rights that are not spelled out in their employment agreements.