STAYING OUT OF HOT WATER
him without just cause or if he left “for good reason.” Felici said he was asked to “gracefully” resign from the system “so that the move would garner favorable public relations for all parties involved.”
“Upon the plaintiff’s resignation, both Brian Felici and board members from the OVHS&E made positive comments about the other as they had previously agreed,” Felici’s lawsuit says. “Denied,” the hospital’s answer responds. Hospital officials, Felici and Felici’s attorney all declined to comment or did not return calls for this story.
The lawsuit states that system executives told Felici orally and in writing that they would make severance payments, and the hospital notified him in a July 8, 2010 letter that the system’s board of directors had voted to cease all payments and benefits. Felici accused the system of fraudulently breaching its contract and inducing him to end his employment.
Felici also sued American Healthcare Solutions for allegedly committing “tortious interference” with his employment contract by causing the cessation of payments to him, and filed a claim of intentional infliction of emotional distress against the consultancy and the hospital system.
The firm is disputing the allegations in court, and its CEO, Jan Jennings, declined to comment. A trial date has been set for February 2013.
The system has reacted in kind to Felici’s lawsuit, denying the allegations of fraud and then countersuing him to recoup his salary because it alleged he concealed illegalities that hurt the system financially—facts that would have caused it not to renew his contracts.
The system said Felici entered into fraudu- lent contracts with physicians going all the way back to his days at East Ohio Regional Hospital and going forward, including deals that resulted in millions of dollars in excess payments to physicians that eventually triggered millions in penalties to regulators.
The system agreed last September to pay $3.8 million for alleged Stark violations that were discovered by American Healthcare Solutions, George Couch, who was then the system CEO, said in a September 2011 interview with Modern Healthcare.
The system also entered a five-year corporate integrity agreement with HHS’ inspector general’s office related to its business arrangements with physicians.
In addition, the system alleged that Felici Experts say most disputes between CEOS and governing boards end up in settlements, not lawsuits. Here are some tips for avoiding litigation:
Employment contracts need specific definitions of “for cause” when a board has power to cancel severance payments for performance.
CEO candidates should know some public hospitals might not be able to guarantee multiyear severance payments because of community opposition.
Boards should document CEO performance and failures through annual reviews that correlate with contract goals.
Consider requiring binding arbitration in a contract to sort out questions about severance payments. Boards should require CEOS to agree not to sue as a term of severance. Since emotions can run high during separation negotiations, it’s important to immediately document any terms in writing after such meetings. mismanaged a restricted charitable gift that resulted in a court-ordered repayment, and then lied about it to the board.
In response to the counterclaims, Felici said the system had not produced enough information for him to rebut the claims, adding that the system has “unclean hands” by blaming the former CEO for alleged acts of which system officials and employees knew about and/or participated in.
Hawley v. Slidell Memorial
In Louisiana, Robert Hawley’s lawsuit is testing the limits of what an employment contract can stipulate.
Hawley started working as CEO of St. Tammany Parish’s Slidell Memorial Hospital in 2000, and in 2006 started receiving two-year, renewable employment contracts that spelled out his terms of service and severance.
What turned out to be his final contract was renewed for two years effective July 1, 2011, during a June 27, 2011 meeting of Slidell’s Board of Commissioners.
The contract listed seven specific reasons for which Hawley could be terminated without severance, including felony conviction and “prohibited conduct.” Section 3.6 of the contract said that if Hawley was terminated for any other reason, the hospital district would pay him all compensation due to him through the end of the two-year contract term.
Less than two weeks into his contract, on July 13, 2011, Hawley was arrested at about 4 a.m. by a Lake Pontchartrain Causeway police officer as he was driving his BMW 81 mph with the top down on the narrow bridge, according to a narrative of the arrest released by the department to Modern Healthcare.
He showed “obvious signs of impairment,” was arrested and booked at St. Tammany Parish Jail, according to the police report.
St. Tammany Parish court records show Hawley pleaded guilty to one count of a second offense of driving while intoxicated on Dec. 6. Hawley was fined $750 and sentenced to serve 26 days of community service.
The hospital’s censure, however, came faster than the judge’s: the board voted to terminate Hawley on July 29.
“Mr. Hawley’s recent arrest for secondoffense DWI made this decision necessary,” Slidell Chairman Larry Englande said in a July 29 written statement.
That October, Hawley sued the public hospital in St. Tammany Parish District Court for wages and benefits that would have been paid through June 30, 2013, saying the district did not terminate him for a valid reason listed in his employment contract.
His salary was not disclosed in legal records