ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, June 24, 2011

Virginia Supreme Court on Tortious Interference (or Why Academia Is Where You Want to Be)

Aesculap-serpentine Earlier this month, the Virginia Supreme Court decided Lewis-Gale Medical Center, LLC v. Allredge.  Karen Allredge was an emergency physician employed by Southwest Emergency Physicians (SWEP) to work in Lewis-Gale's emergency room.  She worked there from 2005 until she was terminate in 2008.  She sued, alleging that Lewis-Gale tortiously interfered with her contract with SWEP.  The facts, as recounted by the Virginia Supreme Court are as follows:

Dr. Allredge attended a dinner in the company of some of Lewis-Gale's nurses.  The nurses griped about their work conditions and mentioned a letter they had drafted addressed to the hospital administration.  A few weeks later, the nurses showed the letter to Dr. Allredge, but she did not sign it.  After the chief nurse received the letter, she was apparently displeased.  She also learned that Dr. Allredge was associating with the authors of the letter and informed the hospital's management of her view that Dr. Allredge was involving herself in the hospital's personnel matters.  Armed with this information (and nothing else that the Court found worthy of mention), Lewis-Gale's COO denounced Dr. Allredge as an "organizational terrorist" to SWEP's Board of Directors.  Not long thereafter, SWEP terminated Dr. Allredge.  

Dr. Allredge sued, alleging that Lewis-Gale had made improper threats to terminate its agreement with SWEP and thus forced SWEP to terminate her.   Lewis-Gale moved to dismiss, arguing among other things that Dr. Allredge was an employee-at-will and thus could be terminate on any grounds.  In addition, Lewis-Gale's contract with SWEP could also be terminated without cause.  The trial court rejected these arguments as irrelevant to the question of whether Lewis-Gale had used improper methods and thus tortiously interfered with Dr. Allredge's contract with SWEP.  The case proceeded to trial, and a jury awarded Dr. Allredge $900,000 in compensatory damages.

Virginia's Supreme Court determined that Dr. Allredge was indeed an at-will employee and thus bore the burden of establishing that Lewis-Gale had used improper tactics in its dealings with SWEP.  The Supreme Court was not persuaded that Dr. Allredge had made any showing of improper conduct.  The key language is as follows:

Dr. Alldredge did not allege or present any evidence tending to prove that Lewis-Gale’s actions were “illegal or independently tortious.” Nor was there any fiduciary duty owed to Dr. Alldredge that Lewis-Gale could have violated. 

Dr. Alldredge did not assert that Lewis-Gale’s motivation in seeking to have SWEP terminate her employment involved a desire to gain some competitive advantage, violated an established standard of the dealings between hospitals and their independent medical contractors, or involved unethical conduct in the form of sharp dealing, overreaching, or unfair competition. 

Rather, Dr. Alldredge maintains that Lewis-Gale’s actions were improper in that it used intimidation, duress, and undue influence based upon Lewis-Gale’s ability to bring “financial ruin” on SWEP by canceling its contract to provide emergency room services to Lewis-Gale, which was SWEP’s principal source of revenue. However, while the evidence supported the inference that SWEP was concerned about the continuation of its contract with Lewis-Gale, the at-will contract between Lewis-Gale and SWEP allowed termination of the contract upon due notice and without cause at any time. This status required that SWEP be continually sensitive to the possibility of termination for any reason or no reason, regardless of any specific action or comment made by Lewis-Gale officers or personnel. Thus, the inherent intimidation or duress experienced as a result of the very nature of this at-will contract cannot rise to the level of improper methods necessary to establish a cause of action for tortious interference with contract expectancy. 

In short, although Lewis-Gale's administrators' conduct was "harsh " and "unsavory," it was not actionable.  The Supreme Court therefore reversed the trial court's judgment affirming the jury verdict and entered a final verdict in favor of Lewis-Gale.  

No doubt, there is more here than meets the eye, but based on this opinion, it seems that Dr. Allredge could have been fired for doing nothing other than listening sympathetically to the nurses' complaints about their working conditions.  


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And that's why they call it "terminable at will.". That's how it is in the real world.

Posted by: Sfw | Jun 24, 2011 7:06:42 AM

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