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Burns v. Universal Health Services

Case Date: 01/01/2004
Docket No: 3869

3869 - Burns v. Universal Health Services

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Katherine Burns, Appellant,

v.

Universal Health Services, Inc., Respondent.

Appeal From Aiken County
James R. Barber, III, Circuit Court Judge

Opinion No. 3869
Heard September 14, 2004 – Filed September 27, 2004

REVERSED and the JURY VERDICT is REINSTATED

V. M. Manning Smith, of Beaufort, for Appellant.

Richard J. Morgan and Robyn W. Madden, of Columbia, for Respondent.

ANDERSON, J.: Katherine Burns appeals the trial court’s decision granting Universal Health Service’s (Universal) motion for a judgment notwithstanding the verdict (JNOV) on Burns’ action for breach of the implied covenant of good faith and fair dealing.  In addition, Burns argues the trial court erred in refusing to admit evidence of the deterioration and quality of patient care at the hospital after Universal purchased the hospital and took over the management thereof.  We reverse and reinstate the jury verdict.

FACTUAL/PROCEDURAL BACKGROUND

This action arises out of Universal’s termination of Burns’ employment.  The issue before this Court is Burns’ contention that certain hospital policies and procedures created an employee contract which altered the at-will employment relationship.

Burns began her employment with Aiken Regional Medical Centers in February 1989.  Universal purchased Aiken Regional Medical Centers from Hospital Corporation of America in July of 1995.  For approximately eight years, Burns remained employed with the hospital as a nurse.  On January 21, 1997, Universal terminated Burns’ employment due to her “insubordinate refusal to meet with the Hospital to discuss a confidential patient care issue.”  Burns claims her termination was the result of tension between Universal and herself after she expressed concern regarding the quality of health care services being provided by the hospital after Universal purchased the hospital in July 1995.

Upon employment with the hospital in 1989, Burns received an employee handbook.  On February 27, 1989, she signed an acknowledgment card indicating she read and understood the acknowledgment card and agreed to read the employee handbook.  The acknowledgment card provided in part:

I understand that the purpose of this Handbook is to provide employees of the Hospital with general information regarding the policies and procedures the Hospital attempts to follow in most cases but that neither this handbook nor any provision of this handbook is an employment contract or any other type of contract. . . . .

I understand and agree that my employment at HCA Aiken Regional Medical Centers is for an indefinite term and is terminable at any time at the will of either myself or the Hospital for any reason.

(emphasis in original).  Additionally, Burns signed a Confidentiality Statement in 1989 declaring she understood that violating patient confidentiality was grounds for immediate termination.  In 1993, Burns signed another acknowledgment card and receipt for handbook, which stated in part:

The purpose of this Handbook is to provide associates of the Hospital with general information regarding the personnel guidelines the Hospital attempts to follow in most cases, but NEITHER THIS HANDBOOK NOR ANY PROVISION OF THIS HANDBOOK IS AN EMPLOYMENT CONTRACT NOR ANY OTHER TYPE OF CONTRACT. . . . .

All associates at Aiken Regional Medical Centers are employed for an indefinite term, and employment may be terminated, with or without cause, at any time, at the will of either the associate or the Hospital.

During her employment with Aiken Regional Medical Centers, Burns received Form Number HR116, which set forth the procedures for disciplinary actions.  Universal adopted HR116 in July of 1995 and amended HR116 on August 3, 1997.  Form Number HR116, as amended by Universal, is titled “DISCIPLINARY ACTIONS” and articulates:

I.    PURPOSE

To establish definitive policies for the initiation of disciplinary and corrective actions and termination of employment.

II.   POLICY

Disciplinary actions must be administered in accordance with established Human Resources policies, procedures and guidelines, and without regard to race, sex, age, religion, national origin or disability.

Employment may only be terminated with the prior approval of the Director of Human Resources or authorized designee.

III.  TYPES OF DISCIPLINARY ACTIONS

A.  Aiken Regional Medical Centers has developed the following progressive disciplinary approach which may be utilized when violations of hospital policy or practice of Service Excellence standards occur.  The following progressive steps should generally be followed when an associate has disciplinary problem(s):
1.  Written counseling session.
2. Written warning (Win Win).
3. Final warning.
4.   Discharge.

The attached document, Rules of Conduct, gives general guidelines for administering disciplinary actions for common infractions.  These guidelines should be used whenever possible to ensure that associates receive fair and consistent treatment in performance and disciplinary related problems.  Disciplinary problems which are not addressed in the Rules of Conduct, or those involving extenuating circumstances may be addressed with the Director of Human Resources or an authorized designee.

In any given case, the circumstances of the specific incident will dictate the severity of the disciplinary actions, and nothing in this policy should be construed, [sic] otherwise  Aiken Regional Medical Centers reserves the right to administer disciplinary action up to and including termination as it deems appropriate.

All terminations must be reviewed and approved by the Director of Human Resources or authorized designee prior to termination.

Disciplinary actions should be recorded on an Associate Management Record form or in memo form, provided that all points are adequately explained.

B.      For the documentation to be complete, the following points should be noted:

1.   A specific date, time and location of incident(s).
2.     A complete description of the negative performance or behavior exhibited by the associate—the problem.  (Use additional paper as an attachment if necessary to adequately describe the problem.)
3.    Consequences of that action or behavior on the associate’s total work performance and/or operation of the associate’s work unit.
4.    Reference to prior discussion(s) with the associate.
5.    Disciplinary action to be taken and specific improvement expected.
6.  Consequences, if improvement is not made.
7.   The associate’s reaction to the disciplinary action, and an offer to submit a written rebuttal.
8.     Note witnesses, if appropriate.

C.  Warnings should be reviewed with associates within 24 hours of the infraction, or as soon after completion of an investigation as possible.  If greater than 24 hours, document reason why action is delayed.

D.  The associate should sign the document as an acknowledgment that the incident was reviewed with them.  Associates are encouraged to write down their improvement action plan in the space provided.

E.  All written and final disciplinary action documentation must be accompanied by an Action Plan for Problem Employee Management form (available in Human Resources) or a Win Win Partnership Agreement.

F.  All official disciplinary action documents must be forwarded to Human Resources to be filed in the associate’s file within three (3) working days following the counseling session.  Failure to submit disciplinary action forms to Human Resources in a timely manner may limit our recourse in dealing with future disciplinary problems.

The “Rules of Conduct” form is bifurcated: (1) Category I (Causes for Immediate Termination); and (2) Category II (Cause for Counseling or Termination for Continuous Violations).  Category I provides:

1. Patient abuse or neglect.
2. Discourteous behavior towards patients, visitors, physicians, management personnel, co-workers, or volunteers.
3. Two (2) consecutive scheduled days absence without notifying your immediate supervisor.
4. Removing any hospital property from the premises without express permission from a member of management.
5. Refusal to perform work assignments as directed by your supervisor or other members of management, including hospital-wide activities and programs.
6. Sexual harassment or harassment of another associate, patient or guest.
7. Possession, consumption, selling, offering for sale, or being under the influence of alcoholic beverages, intoxicants, narcotics or non-prescribed barbiturates on Aiken Regional Medical Centers premises.  Associates must communicate to their supervisor prior to starting job assignments if they are taking prescribed medications which could impair their mental or physical ability to perform job tasks.
8. Failure to submit to a drug screen based on our Drug Free Workplace policy.
9. Unauthorized possession or use of firearms, weapons, or explosives on hospital premises.
10. Immoral or indecent conduct on Aiken Regional Medical Centers premises or off the premises when an associate can be identified as being an associate with the hospital as a result of wearing a uniform, name badge, or other identifying attire.
11. Damage to hospital property.
12. Clocking in or out on another associate’s timebadge, or asking another associate to clock in or out for you, falsifying or altering time, personnel records, or other hospital documents.
13. Sleeping during work hours.
14. Unauthorized access, release, or copying of hospital records, including patient medical charts or divulging any medical information to non-deserving personnel.
15. Failure to report, to your immediate supervisor, gifts or other items of value from patients, patient’s relatives, or Aiken Regional Medical Centers’ vendors.  Acceptance of cash as a gift for any amount is prohibited.
16. Fighting, provocation that leads to fighting, or other forms of disorderly conduct.
17. Falsifying or misrepresentation of information on employment applications, resumes, or other hospital documents.

Burns filed this action on December 19, 1997, alleging wrongful termination, breach of the implied covenant of good faith and fair dealing, civil conspiracy, defamation, and intentional infliction of emotional distress.  Universal filed a motion to dismiss, motion to strike, and a motion for a more definite statement in addition to an answer in response to Burns’ amended complaint.  Several of these motions were granted.  Burns appealed from the trial court’s order.  The court of appeals, in Burns v. Universal Health Servs., Inc., 340 S.C. 509, 532 S.E.2d 6 (Ct. App. 2000), reversed the circuit court’s order for sanctions and remanded.

Thereafter, Burns filed a Second Amended Complaint averring breach of the implied covenant of good faith and fair dealing, civil conspiracy, slander/defamation, and intentional infliction of emotional distress.  Universal moved for summary judgment on the causes of action asserted in the Second Amended Complaint.  Universal’s motion for summary judgment was granted on the issue of intentional infliction of emotional distress.  Burns withdrew her civil conspiracy claim.

Burns proceeded to trial on the claims for breach of the implied covenant of good faith and fair dealing and slander/defamation.  The jury returned a verdict for Burns on her claim for breach of the implied covenant of good faith and fair dealing in the amount of $32,000 and a verdict for Universal on the slander/defamation claim.  Universal filed a motion for JNOV.  Approximately six weeks after the trial, the circuit judge granted the JNOV.  In his order, the trial judge ruled:

Based on this evidence the Court finds that the only inferences to be drawn from the trial evidence are: (1) that the hospital maintained and preserved the at-will employment relationship; (2) Plaintiff failed to identify any policy that she relied on that supports an exception to the employer’s preservation of the at-will relationship; (3) that she was provided actual notice of the terms of the at-will relationship in conspicuous language; (4) at no time during her employment did the hospital ever have mandatory language in any document that would alter the at-will relationship; and (5) at no time during her employment at the hospital did the hospital relinquish the discretion to review any individual matter and take steps it believed appropriate to the circumstances.

STANDARD OF REVIEW