No Basis for Million-Dollar Jury Verdict for “Incivility in the Workplace”

Vosough v. Kierce, 437 N.J. Super. 218 (App. Div. 2014).  Plaintiffs, all “highly-regarded OB/GYN specialists,” had independent contractor agreements (“ICA’s”) with St. Joseph’s Regional Medical Center in Paterson.  Under those ICA’s, plaintiffs served as attending physicians in St. Joseph’s; OB/GYN department, handling patients who came in without their own doctors, supervising residents and other medical students, and performing other duties.  Plaintiffs were paid hourly under the ICA’s, and the ICA’s were terminable “without cause, reason or justification” by either party on 60 days’ notice.

Defendant Roger Kierce, M.D., was the head of the OB/GYN department and plaintiffs’ direct supervisor.  Kierce was “inclined to disparage and insult physicians and staff under his supervision,” including plaintiffs and other doctors.  Kierce admitted that he would use “biting language” and be “harsh” and “stern.”  Kierce’s conduct violated St. Joseph’s Medical Staff Bylaws, which required that “all persons within its facilities be treated with courtesy, dignity and respect,” and forbade “[v]erbal or physical attacks, hostility, threats of violence or retaliation … [c]riticism addressed to the recipient in such a way as to unreasonably intimidate, undermine confidence, belittle or imply stupidity or incompetence.”

In particular, in front of a number of other doctors, Kierce at one point accused one of the plaintiffs, Dr. Vosough, of perjuring himself in a deposition in a malpractice case.  At another time, he insulted attending physicians as a group, labeling them “vultures.”  On still another occasion, Kierce loudly threatened that if plaintiffs did not attend a certain meeting, Kierce would “rip their skulls from their skeletons and keep a headcount.”  Finally, Kierce announced a new policy under which attending physicians would be responsible for “all patients within the scope of their duties, whether or not the attending physician had specific notification of the patient’s admission and need for services.”  Plaintiffs considered that this policy change unreasonably exposed them to malpractice risks.  They complained to the Medical Center’s CEO, William McDonald, about the policy change and about Kierce’s verbal abuse.  McDonald left the policy change in place and, according to plaintiffs, promised to investigate Kierce’s verbal outbursts but did nothing about them.

Plaintiffs ultimately resigned from their positions, in 2006, and sued the Medical Center, Kierce, McDonald, and another individual.  Plaintiffs contended that they had been forced out by Kierce’s wrongful acts and McDonald’s failure to deal with those acts.  Plaintiffs’ legal theories were breach of contract, tortious interference, and negligence.  Except as to the negligence claim, defendants’ dispositive motions were largely denied, and the case went to trial.  The jury awarded plaintiffs $1,269,079 in compensatory damages, based on testimony of plaintiffs’ expert that that was how much plaintiffs had suffered in lost income from 2007-2010.  Defendants appealed.  In an opinion by Judge Ashrafi that was issued today, the Appellate Division reversed the jury verdict and entered judgment for defendants.

Judge Ashrafi first noted that because the ICA’s were between plaintiffs and the Medical Center, there could be no breach of contract claims against Kierce or McDonald, non-parties to the ICA’s.  Likewise, since a party cannot tortiously interfere with its own contract, there could be no tortious interference claims against the Medical Center.  What remained were tortious interference claims against Kierce and McDonald and breach of contract claims against the Medical Center.

Addressing tortious interference first, Judge Ashrafi noted that “[t]heoretically, employees and agents of a corporation can be charged with the tort of intentional interference with a plaintiff’s contract with the corporation.  Printing Mart[ v. Sharp Electronics], 116 N.J. [739,], 761-63 [(1989)].  However, if an employee or agent is acting on behalf of his or her employer or principal, then no action for tortious interference will lie.”  After canvassing cases coming out both ways on the issue of what acts are within the scope of employment, Judge Ashrafi concluded that no reasonable jury could have found that McDonald and Kierce had acted outside the scope of their employment.  “McDonald’s representation that he would investigate was the kind of task he was employed by the hospital to perform, it occurred at the time and place he was performing his duties for the hospital, and it was intended to serve the purposes of the hospital in managing its staff.”  Plaintiffs’ claim that he performed those duties poorly, or not at all, did not take them out of the scope of his employment or create tort liability for non-feasance.  Nor did McDonald’s failure to revoke Kierce’s new policy about attending physicians to which plaintiffs had objected.

“Similarly, with respect to Kierce, all the incidents occurred in the course of Kierce’s employment as the chairman of the OB/GYN department, they occurred at the time and place where Kierce performed his duties as chairman, and he was motivated, however misguidedly, by his desire to supervise in his own way the work and performance of physicians and employees in his department.  Whether his methods were good or bad does not change their nature and purpose as acts performed on behalf of the employer.”

Plaintiffs’ breach of contract claim against the Medical Center failed, as a matter of law, for a different reason.  Judge Ashrafi observed that the ICA’s were terminable upon 60 days’ notice, without the need for any cause or reason.  Even if plaintiffs’ resignation had been forced by the Medical Center’s breach of the ICA’s, that 60-day period was the only time as to which plaintiffs could claim damages.  Plaintiffs presented no evidence of any damage that they suffered during the 60-day window surrounding their resignation in 2006.  Their expert calculated damages beginning as of 2007.

We have seen this movie, or at least a comparable one, before.  In Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc.,  282 N.J. Super. 140 (App. Div. 1995), a plaintiff who presented very oppressive facts won a multi-million dollar tortious interference (and New Jersey Antitrust Act) judgment in the Law Division, only to see it reversed in its entirety and judgment entered for the defense as a matter of law in the Appellate Division, despite facts that were seemingly favorable for the plaintiff.  The Supreme Court denied certification in that case.  Given the size of the overturned jury verdict here, a petition for certification is likely.  Plaintiffs here have some potentially interesting arguments to make in such a petition, especially as to tortious interference.