Insights

Home > News & Insights > Insights > Eastern District of Virginia Dismisses Employment Contract Case

Share this on:   a b j c

Eastern District of Virginia Dismisses Employment Contract Case

Published by on September 5, 2008

The U.S. District Court for the Eastern District of Virginia, Alexandria Division, awards attorneys’ fees and costs to the employer on a breach of contract claim brought on the basis of an employment agreement that was terminated.  A copy of the opinion is here. The plaintiff was a sixty-five (65) year-old African-American physician and Board […]

The U.S. District Court for the Eastern District of Virginia, Alexandria Division, awards attorneys’ fees and costs to the employer on a breach of contract claim brought on the basis of an employment agreement that was terminated.  A copy of the opinion is here.

The plaintiff was a sixty-five (65) year-old African-American physician and Board Certified anesthesiologist who had practiced medicine in Virginia for more than 25 years.   In September 1998, Plaintiff signed an Employment Agreement, which covered his employment relationship with Defendant Anesthesia Associates, Ltd. (“AAL”).  The Agreement stated that upon approval of 75% of AAL’s shareholders, AAL could terminate the Agreement at any time by providing the physician with 90 days notice.

AAL solely provided anesthesia services to Inova Alexandria Hospital.  In June 2005, Inova told Defendant Dr. Reed S. Underwood M.D., who at the time was Chairman of Inova’s Anesthesia Department and a shareholder and director of AAL, that it received a complaint accusing Plaintiff of sexually harassing one of Inova’s female employees.  After an investigation by Inova’s Human Resources Department, Inova informed several individually named Defendants and AAL, that it had concluded the sexual harassment had occurred.

AAL believed that it would lose the Service Contract with Inova if it permitted Plaintiff to return to Inova.  In addition, because Inova was AAL’s only client, Plaintiff could not perform any services for AAL as a result.  AAL therefore asked Plaintiff to resign and when he refused AAL suspended him without pay.  AAL later informed Plaintiff and the other directors that a director’s meeting would be held on August 23, 2005, to consider the termination of Plaintiff’s employment and to decide whether to ratify the decision to place Plaintiff on unpaid leave.  In that meeting, the directors voted unanimously to terminate Plaintiff “without cause” under the terms of his Agreement.

Plaintiff brought an action against Defendants seeking damages for violation of 42 U.S.C. §1981 and Va. Code §§ 18.2-499 and 500, breach of contract and tortious interference with contract.  Defendants moved for summary judgment.  The Court granted Defendants’ motion for summary judgment with respect to the § 1981 claim because Plaintiff provided no evidence that AAL’s termination of his employment was based on discrimination. 

The Court also granted Defendants’ motion for summary judgment with respect to the breach of contract claim, stating that Plaintiff provided no evidence that he was terminated for any reason other than the reason articulated by Defendants.  Further, Paragraph 16 of the Agreement provided that if any party “commences legal proceedings” under the Agreement, the prevailing party in any such proceedings shall be entitled to attorneys fees.  Therefore, the Court awarded AAL reasonable attorneys’ fees and costs relating to the breach of contract claim.

The Court also granted summary judgment on the Tortious Interference with Contract claims, because as a matter of law, a party cannot interfere with its own contract.  Thus, because the individual Defendants were acting within the scope of their employment and agents of AAL, they could not be held liable for Tortious Interference with Contract.

Contributed by Michael K. Wilson

Topics: , ,

Share:   a b j c