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July 2012

Practice Perfect: Compliance & Risk Management
What to Do If You Get Sued by an Ex-Employee
By Jean Shaw, Contributing Writer
Interviewing Nancy Baker, Elise Levine, MAG, CRC, OCS, and Robert A. Wade, JD
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After several frustrating months of trying to improve the performance of a difficult employee, you fired her. But according to her, she did an acceptable job, and she never should have been dismissed. Even worse, she’s filed a suit claiming that you discriminated against her on the basis of her ethnicity. Now what?

Employee lawsuits can rattle your nerves, swallow hours of your time, and cost a significant amount of money. Here’s a look at what to expect and how to prepare. 

Good News, Bad News

The good news is that employee suits against medical practices are not as common as you might think, although they do happen.

“We see very few lawsuits brought by employees who were either discharged or not hired to begin with, although the risks [of such suits occurring] are there,” said Robert A. Wade, JD, a partner at Wade, Goldstein, Landau & Abruzzo in Berwyn, Pa. “I suspect it’s a financial matter, in that it’s too expensive for most people” to pursue lawsuits.

It’s much more likely that you’ll face a hearing about denial of unemployment insurance, said Nancy Baker, practice administrator with the Elander Eye Group in Santa Monica, Calif. While people may not be inclined to file a suit charging you with wrongful termination, she said, “they will fight for their unemployment insurance, and it can end up going to a hearing.”


Critical First Steps

Even if an employee’s suit is essentially a frivolous complaint, it will be a “disruptive, expensive process,” said Ms. Baker, who’s on the AAOE board of directors. “The first thing to do is to take a deep breath and call your attorney.” Next, consider the following steps.

Don’t destroy evidence. “Never alter or destroy evidence,” said Mr. Wade. “The record is the record; it’s what it is.” Going back and changing things undermines your case and can prove disastrous, he said.

This applies to all e-mail correspondence and other electronic files, not just to pieces of paper in an employee’s personnel file. “In this day and age, there’s nothing that can’t be uncovered electronically,” said Mr. Wade. “Yet some people persist in the belief that they can go back and delete or change things. Never change the record.”

Ask someone to take a second look. Once a suit has been filed, it’s always helpful to take a second look at the policies and procedures that your practice has been following, said Mr. Wade. “Have someone independent look at the personnel file; he or she can get a good read on what’s there in the file.” Ideally, this person will be a good employment lawyer with whom you already have a working relationship. “An employment lawyer can tell you where you stand” and how solid your case is likely to be, said Mr. Wade.


The AAOE in Chicago

The American Academy of Ophthalmic Executives (AAOE) is not just for administrators—it is for physicians too. In Chicago, during the Academy/APAO Joint Meeting (Nov. 10-13), Eye M.D.s can attend the AAOE’s practice management instruction courses by using the same Academy Plus course pass as is used for the Academy’s clinical instruction courses.

For more information, visit


How to Avert Legal Troubles

In truth, preparing for a suit should start long before one is filed.

If you anticipate trouble, contact an attorney before firing an employee. If you have a potentially sticky situation with a current employee, pick up the phone and call your attorney. “The money you will spend on talking to your attorney before you fire someone can really pay off,” said Ms. Baker. “The way I look at it is, either I can pay a bit on the front end and dislike the situation somewhat, or I can pay big on the back end and dislike it a great deal.”

Find an attorney. If you don’t have a working relationship with an attorney, what’s the best way to find someone with experience in employment law? “I prefer word of mouth and personal referrals,” said Ms. Baker. The physician(s) in your practice may be a resource, she pointed out. “Physicians usually know people in their community and can get referrals.”

Other sources of referrals include your county and state medical associations and your state employment development department (EDD). “We found our attorney through the California EDD,” said Elise Levine, MAG, CRC, OCS, practice administrator and director of clinical research for the North Valley Eye Medical Group in Mission Hills, Calif. “The department does quarterly seminars, and she came in and did a pro bono presentation.” Ms. Levine, who chairs the AAOE board of directors, also recommended checking with local and state chambers of commerce as well as with labor law firms in your area.

“You can interview lawyers,” Ms. Baker said. “You want to know whether the two of you communicate well, and you want to know whether you can get through to them quickly. Are they accessible? Will they pick up the phone when you call?”

Be thorough with your documentation. If you have a file that is organized with complete, accurate information, your attorney will be able to tell you straight away how strong your case is and whether you should settle or fight, said Ms. Baker. If you fight, then this full documentation “will help your attorney approach the plaintiff’s attorney with a stronger argument in your favor,” which hopefully will discourage any aggressive legal attack. “You want to provide enough evidence to make the plaintiff’s attorney not want to go down that road,” she said.

Make sure staff know that you are fair (and that you can prove it). Staff communication that is even, open, and fair—and personnel policies and procedures that are clear, legally sound, and consistently applied—will steer employees away from filing suits, she said. “My staff knows that I’m on the ball; they know that I document and write things down; they know that they sign for everything,” said Ms. Baker. “Again, the more organized you are, the better off you are. Then disgruntled employees aren’t thinking that you’re a vulnerable person; they know you have the information you need.” And when that’s the case, an unhappy employee is less likely to pursue a lawsuit, she said.

“In addition, if you have a clearly identified plan for performance improvement, then you should have a timeline” that can be given to your lawyer; and this timeline should document when and how things transpired, said Ms. Levine. “Verbal warnings must be documented, which then should escalate to written warnings. Absences and tardy arrivals should be noted and addressed at the time they occur. If you terminate an employee for frequent absences and tardiness, a calendar showing times and occurrences will most likely trump” any spurious claims such as accusations of bigotry, she said.

Pick your battles. There are times when you just have to pick and choose your battles, Ms. Baker advised. This is particularly true in the case of unemployment insurance, she said. “When you deny employees their unemployment insurance, they can cause so many problems. Even though you may be within your rights, you need to look at the bigger picture and what’s right for the practice.”

Stay up to date. Regularly review your personnel manual as well as any other forms and policies, said Ms. Levine. The laws change, and you can’t afford to be left behind. See “Stay Informed” (below) for sources of information that will help keep you up to date.


Stay Informed

Here are some sources of information on labor law, from the federal to the local level.
Bureau of National Affairs. BNA, which is now part of the Bloomberg news network, is a highly respected publisher of news on human resources and labor issues. Publications include the Daily Labor Report. Go to

U.S. Department of Labor. The DOL’s website has compliance materials, including an expert “e-laws” system and a listserv to which you can subscribe for updates. Go to

Employment Law Information Network. This website is designed as a portal for employment law, and it provides a roundup of federal and state news with links to stories on affiliate websites. The navigation bar at the top of the page allows you to click on “State Articles” to find news in your area. Go to

State EDDs. Check with your state employment development department. Both Ms. Baker and Ms. Levine rely on the California EDD for information and continuing education seminars.

State and county medical associations. Ms. Baker particularly recommends these as sources. “You need to know what happens federally, but that tends to be very broad,” she said. “What tends to get you in trouble is what happens in your state.”

Listservs. “I sign up for e-mail lists on labor issues,” said Ms. Levine. That way, if something is coming down the pike, I can call our attorney and ask her about it.” She noted that the Employment Law Information Network (above) is “a great place to start.”


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