Like physician contracts in every other state, Minnesota physician contracts don’t typically lead to litigated disputes. That’s due in large part to how loosely both the doctor and the employer are bound in most contracts on critical points like resignation or severance. Contracts generally allow the employer to terminate the relationship on notice of a month or two, even without giving or having any reason, and there’s usually a reciprocal provision allowing the doctor to resign after giving similar notice. Moreover, if there’s a claim that a termination resulted from something like age or gender discrimination, it almost always will be based on a statutory violation, not a breach of contract.
There are a host of other issues, however, that can lead to breach of contract disputes between the parties, and when they arise it pays to consult early on with a Minnesota lawyer experienced in dealing with physician contracts. For example, a doctor may claim the employer has breached their contract by not paying a promised bonus, or not counting relative value units correctly, or not adequately supporting research. A hospital might claim that a former employee has breached non-compete or confidentiality provisions.
So, what happens if there is such a breach of contract claim? There are various ways in which the dispute can be resolved, ranging from giving notice and allowing the other side to “cure” the problem, to out-and-out litigation in court, which easily can drag on for a year or more. In between there are various other options: negotiation (the parties try to work things out on their own), mediation (a neutral third party tries to facilitate a negotiated settlement), and arbitration (a neutral third party is authorized by both parties to decide the dispute).
The procedure that will apply in any given case will almost always depend on the language in the contract. Have the parties agreed to a notice and opportunity to cure for certain kinds of breach? Have they agreed to binding arbitration? Have they agreed on whether or not Minnesota law will apply, and what court will have jurisdiction if a case goes into litigation? If such issues are not addressed in the contract, the parties can still agree on a procedure after one party has claimed a breach. For example, they might decide they’d rather at least attempt mediation before going to court. In the absence of an agreement, which state’s law would apply is usually pretty straightforward, because all relevant events will have occurred in one state where all the relevant parties also reside. If that’s not so, there are established legal rules for making the choice, as well as for choosing where a case might be tried.
Another important consideration is what kind of remedy a plaintiff or potential plaintiff is seeking. Does a doctor want money damages, or perhaps a declaration from a court that a non-compete provision is invalid? Does a medical practice want money, or maybe the return of allegedly stolen intellectual property, or an injunction that would prevent the doctor from taking a new job with a competitor? Does a doctor want to compel a former employer to cease making disparaging or even defamatory comments?
In weighing and balancing all these various factors, doctors with potential breach of contract claims should keep in mind that even if they can go to court, they might want to suggest (or accept) some less hostile and time-consuming process. Litigation takes time and emotional energy as well as money, and the outcome is not guaranteed. It can be long and expensive, but sometimes it’s the only way to bring the other side to the table for a negotiated resolution. At Schaefer Halleen we are fully prepared to litigate and try cases when we must, and our reputation for doing so often makes it easier to reach a pre-litigation settlement.
