California Appeals Court Upholds $200,000 Damages Award To Physician Claiming Retaliatory Discharge Against Employer

A physician who sued Southern California Permanente Medical Group (Medical Group) and Kaiser Foundation Health Plan, Inc. (Kaiser) (collectively, defendants) based on claims that his employment was terminated in retaliation for “advocating medically appropriate care” was properly awarded $200,000, a California appeals court ruled in an opinion posted December 20.

The California Court of Appeal, Second District, therefore affirmed the judgment and damages award issued by the lower court based on the jury’s special verdict finding that the physician was entitled to sue the defendants in tort for their retaliatory conduct in violation of “public policy” as defined in Cal. Bus. & Prof. Code 2056. 

The appeals court also affirmed the lower court’s order denying the defendants’ motion for judgment notwithstanding the verdict (JNOV).

Prior to his termination, the physician, Dr. Mark L. Woods, had worked for the defendants for 15 years as an emergency room (ER) physician at Kaiser Permanente Bellflower Hospital (Kaiser-Bellflower) in Bellflower, CA.

Woods claimed he complained about working conditions and patient care in the ER, and in retaliation, defendants placed him on administrative leave and reduced pay in November and December of 2003. Subsequently, in March 2004, Woods filed his lawsuit charging that defendants’ actions violated public policy enunciated in Cal. Bus. & Prof. Code 2056.

Although Woods was later reinstated, he was transferred to another Kaiser hospital and then suspended again in April 2006 in retaliation for his continued complaints, the opinion said.

The case went to trial in May 2006, and according to the appeals court, evidence presented at trial supported Woods’ allegations that Kaiser-Bellflower failed to provide appropriate medical screening examinations and stabilizing treatment for emergency medical conditions.

“Kaiser-Bellflower’s policy was to keep patients waiting in the emergency room until they left without treatment,” the appeals court said. “Between 1999 and 2006, more than 5,000 patient were sent home without receiving medical screening exams.”

Moreover, incidents reported as part of the administrative citations process showed that “Kaiser intentionally understaffed and understocked the hospital to increase profits . . . and provided inadequate and unsanitary care for its patients,” the appeals court noted.

In June 2006, the jury in the case returned a special verdict finding Woods’ patient advocacy was a motivating factor for defendant-Medical Group’s placement of Woods on administrative leave and reduction of pay in 2003.

In addition, the jury answered a number of questions, responding “no” when asked whether Woods was an employee of the Medical Group, and “yes” when asked whether Kaiser and the Medical Group were a “single employer” of Woods.

The jury ultimately awarded Woods $200,000 for past economic losses only and did not award punitive damages. The trial court subsequently entered judgment on the special verdict, awarding Woods $200,000 plus interest from the date of the verdict.

Defendants filed a motion for JNOV, contending that because the jury found Woods was not an “employee” of the Medical Group, his claim for wrongful retaliation in violation of public policy enunciated in Cal. Bus. & Prof. Code 2056 must fail as a matter of law.

Shortly thereafter, in July 2006, Woods’ job was terminated. One day later, the trial court denied defendants’ motion.

On appeal, defendants reiterated their contention that Woods could not prevail on his public policy claim because he was not an employee of the Medical Group, according to the jury’s answers to specific questions.

In rejecting this argument, the appeals court explained “the jury’s finding that the Medical Group was not Dr. Woods’s employer was merely a finding that it alone was not . . . Woods’s employer; it was not an exoneration of defendants.”

“In a related finding, the jury expressly found Kaiser and the Medical Group were Dr. Woods’s ‘single employer,’” the appeals court continued.

In addition, the appeals court noted that the jury verdict reflected its determination that the Medical Group had authority over Woods, e.g., placing him on administrative leave and reducing his pay. These actions were "indicia of an employer/employee relationship" between the Medical Group and Woods consistent with the finding that the Medical Group, together with Kaiser, were Woods’ single employer, the appeals court said.

Affirming the lower court’s decision, the appeals court concluded that, “[b]ecause Woods was an employee of the Medical Group and Kaiser,” he was entitled to bring his tort claims based on defendants’ retaliatory conduct in violation of the public policy set forth in Cal. Bus. & Prof. Code 2056.

Woods v. Southern Cal. Permanente Med. Group,  No. B193021 (Cal. Ct. App. filed Nov. 20, 2007 and posted Dec. 20, 2007).