Doctors Exclusive Contract Termination Clause
In Abrams v. St. John's Hospital & Health Center (1994) 25 Cal. App. 4th 628, the plaintiff physician was given a position as head of the defendant's pathology department pursuant to an agreement which provided that he was an independent contractor and the agreement could be terminated by either party with 90 days' notice or, if for cause, 30 days' notice. (Id. at p. 632.)
The agreement also provided that the plaintiff waived any rights to a hearing and appellate review under the hospital or medical staff by-laws for purposes of challenging a suspension or termination.
When the defendant terminated the plaintiff, the plaintiff sued claiming breach of contract, among other things.
In affirming the denial of a motion for a preliminary injunction, the court noted the general rule, discussed above, that "when a hospital wishes to terminate the staff privileges of a doctor, it must do so in a 'procedure comporting with the minimum common law requirements of procedural due process' wherein it is shown that the hospital has 'adequate cause' for termination." (Id. at p. 636.)
But the court concluded the plaintiff had no right to a hearing under the hospital or medical staff bylaws because he contracted away those rights. (Id. at p. 638.)
The conclusion was based upon that the plaintiff had an exclusive contract to provide medical services to the hospital.
The court explained that doctors who obtain such exclusive contracts "are bound by the contractual termination provisions to which they have agreed.
These doctors are to be contrasted with other staff physicians who do not hold these exclusive contracts but who are entitled to certain due process hearing rights pursuant to hospital and medical staff bylaws." (Id. at p. 631, 30 Cal. Rptr. 2d 603.)