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TeamHealth, EP Clash over Noncompete Clause, Incentive Plan

SoRelle, Ruth MPH

doi: 10.1097/01.EEM.0000295871.68854.c9

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Restrictive covenants and expenses charged against an incentive plan have pitted a Florida emergency physician against his former employer, TeamHealth Southeast, according to lawsuits filed by both.

The court denied a request by David Soria, MD, for summary judgment in May, and he and his attorney are now seeking certification as a class action suit, he said. “Right now, it's just me who has filed the suit,” Dr. Soria said. “Once it's certified, others will be climbing aboard.”

Dr. Soria said his suit was prompted by one filed against him by InPhyNet, now called TeamHealth Southeast, in 2005, after the hospital where he works, Wellington Regional Medical Center in West Palm Beach, FL, changed contract management groups and terminated its agreement with TeamHealth. The TeamHealth suit said by accepting employment from a new firm and continuing to work in the Wellington ED, Dr. Soria violated the restrictive covenant in his contract. TeamHealth's suit named Dr. Soria and the new contract management group.



“They are continuing to go forward with enforcing the noncompete against me,” Dr. Soria said. “I did everything I could do to resolve that issue with them,” including trying to obtain other employment from TeamHealth, he said, but that was unsuccessful. “I am staying at the same hospital, but I'm employed by another group altogether. I have no ownership in the group. I'm purely an employee as I was with TeamHealth. I went from being employed by Team-Health to being employed by another group.”

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‘Conspiracy Against TeamHealth’

“There is very little we can say at this point because it is in litigation,” said TeamHealth spokeswoman Tracy Young, a marketing vice president.

But in its complaint, the company noted that Dr. Soria, who was the medical director of the Wellington ED, had access to confidential information about Wellington Regional Medical Center, including incentive plans for other emergency physicians who worked at the hospital, information that if given to the company's competitors could have put TeamHealth at a “competitive disadvantage.”

According to the TeamHealth complaint, “Dr. Soria and [the new contract holder engaged] in a conspiracy to pirate away the emergency room contract.” The TeamHealth suit said Dr. Soria had improperly discussed the possibility of employment with the company that ended up staffing the Wellington ED. The suit also accuses him of enticing other physicians to work for the new company. “Dr. Soria began communicating with [the new contract holder] with the aim of becoming employed by [it] in the same or similar role he had been serving at the emergency department at WRMC as an employee of [TeamHealth],” the suit says.

In its response to Dr. Soria's request for summary judgment, TeamHealth accused Dr. Soria of trying to convince Wellington CEO Kevin DiLallo to terminate the contract in 2004. “After Soria's failed 2004 coup, [TeamHealth] offered him re-employment subject to his entering a new employment agreement. … Did Soria sign and return the new employment agreement? The answer is ‘no.’ What he did was unilaterally alter the new employment agreement by taking out language that would preclude him from working at Wellington if the InPhyNet contract were terminated again in the future. … Dr. Soria emailed his altered employment agreement (with its watered down restrictive covenant) back to … InPhyNet hoping that nobody would notice his unilateral alteration of the restrictive covenant portion.”

The suit also noted that Dr. Soria's continuing role as the medical director of the emergency department at Wellington violates provisions in his contract that forbid him from continuing to work at the hospital after his TeamHealth contract was terminated. “Dr. Soria knowingly and deliberately breached his restrictive convenant. … It is beyond dispute that David Soria is in breach of his restrictive covenant,” the suit noted. TeamHealth's suit also said he left the company's employment without giving the required 60-day notice.

Dr. Soria said the problems began when the hospital's chief executive officer attempted to terminate TeamHealth's contract in 2004. He later withdrew that termination, and TeamHealth strengthened the noncompete clause in the physicians' contracts, he said. “Because I was the director, they put in a stronger one for me.”

In 2005, the CEO terminated the contract again, he said. “He gave them a termination notice, put out an RFP [request for proposal], and spoke to other groups. He went with another group. That's when TeamHealth continued to aggressively go after me and our group to enforce the noncompete,” Dr. Soria said. Ultimately, he said, the company sued him and the new contract holder at the hospital. Mr. DiLallo did not respond to Emergency Medicine News' request for comment, and Dr. Soria said he had no improper discussions with the new contract management firm at any time.

Dr. Soria said he filed suit after finding irregularities in TeamHealth's physician incentive plan, which is given to physicians based on profits. “In their expense column is an unknown expense or an expense item that was unexplainable,” said Dr. Soria, adding that the company would not explain the expense, which was listed as “physician benefits” or as “other physician benefits.” Those funds count against profits and ultimately against physician incentives, he said.

“I filed suit afterward because I knew of this,” said Dr. Soria. “I basically countersued to let them know that I'm not going to let them get away with it. The noncompete clause stated that I was not to work at the facility if they lost the contract.”

Ms. Young of TeamHealth said the company denies Dr. Soria's allegation about the incentive plan, but couldn't comment any further because the company had not yet filed a response.

Dr. Soria also said he and his group, Emergency Specialists of Wellington, were not offered other jobs within TeamHealth. “They left me no other choice. Am I to be without a job? Am I not to be able to generate an income and have to move out of the area? It doesn't make an emergency physician who is seeking employment want to take a job with a company like TeamHealth,” he said.

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Profession vs. Business

Robert McNamara, MD, a past president of the American Academy of Emergency Medicine, said the group supports Dr. Soria on the restrictive covenant issue. It's one of our core principles that they are not appropriate in emergency medicine. A lot of the other issues in his suit are typical reflections of what happens when corporate influence gets into emergency medicine. It's basically emergency medicine ceding the control of our practice to corporations.

“TeamHealth is representative of the industry,” he said. “They are a business. We are a profession. There is tension between the bottom line and professionalism. The Soria case is an example in which a corporation held a contract, lost the contract, and are going after the physicians.”

He said AAEM will do what it can to support Dr. Soria. “The question is, ‘Why did you sign that contract that has that clause in it?’ The reason people sign these contracts is that there are areas where this is the only job they can get, and they are forced to sign,” Dr. McNamara said. “We as a specialty have not been good at educating physicians as to the dangers of these contracts.”

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