Doctor Sued Hospital for Breaching An Exclusive Contract In Texas
In East Tex. Medical Ctr. Cancer Inst. v. Anderson, 991 S.W.2d 55 (Tex. App.--Tyler 1998, no pet.), Dr. Anderson claimed his privileges were unfairly reduced by the Center's entering into an exclusive contract with another physician through which all doctors practicing at the Center would have to be employed. Id. at 58. He claimed that by entering the exclusive contract agreement, the Center breached its agreement with him that he would receive a hearing prior to reduction or termination of his privileges at the Clinic. Anderson, 991 S.W.2d at 62.
The Tyler court found that while the bylaws did constitute an agreement that was enforceable against the Clinic, as a matter of law, the Clinic's actions in entering the exclusive contract agreement did not breach that agreement. Id. at 63.
The court reasoned that the contract rights afforded under the bylaws were "for the purpose of maintaining competency in professional conduct and practice" by the Clinic's staff doctors. Id.
"These procedures were not intended to cover cases in which a doctor's staff privileges have been affected by some administrative decision not directly involving that doctor." Id.
The court held that the Clinic's entering into the exclusive contract agreement was not a challenge to Dr. Anderson's professional conduct nor an effort to remove him for cause. Id.
Again, the court found that Anderson was not owed a hearing because the underlying rationale for a hearing was not present, noting that "the purpose of such a hearing could not be to override administrative decisions regarding the operation of the Institute." Id.