We kick off the Operating Season with a captivating story featuring a plastic surgery practice owner and the aftermath of one of his physicians crossing the line with a patient. Tune in to learn how to protect your practice and your patients amidst turmoil. We share essential strategies for employment agreements, non-compete clauses, and navigating medical board investigations. Listen now and discover the profound impact one rogue individual can have on your practice’s reputation and success.
Listen to the full episode using the player below, or by visiting one of the links below. If you have any questions or would like to learn more, email us at info@byrdadatto.com.
Transcript
*The below transcript has been edited for readability.
Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences, creating simplicity in 3, 2, 1.
Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto with my co-host, Michael Byrd. Michael, we’re so excited we get to bring a brand new season to our audience.
Michael: It’s amazing. Audience, as a business and health care law firm, we meet a lot of interesting people and learn their amazing stories. This season, we are riding the emotional rollercoaster of the crises that arise in the operating season of a business. Our theme this season is Running a Business.
Brad: Yes, Michael. And as we alluded to in the first season when we kind of addressed this in season 15, running a business is just one of the several seasons of a business. What are those other seasons?
Michael: Yeah. As we’ve talked about, there are four seasons of a business and we’re spending a podcast [00:01:00] season on each season this year. We have the building season we just completed, that’s starting a business. The operating season, the running of a business; then we’re going to talk about growing a business during the scaling season, and then the buying and selling season. So, we will be camping out for this season on running a business – operating
Brad: Yeah. And audience members, this season we’re going to illustrate the types of problems that arise when running a business and typically, like the crisis that occur. And yes, audience members, these are real client stories, but we actually will still sprinkle in a few guests during these episodes.
Michael: The fun thing for us in the operating season is that you never know what you’re going to encounter. And as we were preparing for this season, there were a few crazy stories that we started remembering and talking about. And we just couldn’t quite turn them into a full story for our episode, [00:02:00] so I thought it’d be fun, Brad, to sprinkle in a few kind of mini stories during the opening banter this season.
Brad: Okay. So you have a mini story. I guess you’re going to try to share a mini story now? Is that what you’re trying to tell me?
Michael: I thought you would never ask, Brad.
Brad: Well, I’ll bet you that you’re going to lead with one of your favorite stories of all time. I know we’ve talked about it a number of times, but is it the golf course story, right? It’s got to be it.
Michael: Of course, yes, I have to. It is one of my favorite stories. Our client in this story is an orthopedic surgeon, and I know you remember this day well, Brad, because we talked about it in the heat of the moment when it happened. But our client called me in the middle of the day on a Friday afternoon. This was like 15 years ago.
Brad: Oh my gosh, y’all! Aren’t y’all so proud? Michael could remember that far back. That’s great. They’re agreeing with me.
Michael: Okay, good. Well, so I answer the phone, and my client, we will call him Dr. Fore, was [00:03:00] whispering on the phone to me.
Brad: Okay. You mentioned this is a golf course story. So first question, was he whispering? Because I watched so much golf and like, you know how they always whisper when they’re announcing stuff? But maybe not. Or are you calling him Fore because of his fore handicap or something?
Michael: All funny points, Brad, and you know the answer. No, not the number four, but the phrase that’s used when you hit an errant golf shot, which I know you know very well.
Brad: Yes, I know how to yell fore. All right, so let’s keep going.
Michael: So Dr. Fore was whispering in the phone that he was in Arizona playing golf at an exclusive club, and he had hit a ball through someone’s window.
Brad: Oh, no, so that’s probably why he was whispering.
Michael: Yes. The homeowner was walking out of the house towards him with the ball in her hand, and Dr. Fore wanted my [00:04:00] legal advice on what to do.
Brad: Did you try to set up a zoom meeting real quick and start kind of drawing out the whiteboard of having what an MSO model could look like and how it can help limit his liability?
Michael: I had no idea what to do, but definitely was aware that an MSO was not going to solve this problem.
Brad: Okay. So since no MSO, what did you say?
Michael: I started winging it. I asked him if he had any money in his wallet, and he said I have $200. I said, take the money out and start walking confidently towards her and start apologizing for putting her window out and offer her the only cash that you have to fix her window.
Brad: I’m trying to remember this, but what year in law school did you learn this maneuver?
Michael: Yeah. You know, we’ve heard the expression law and the raw before, where you’re just kind of making stuff up – this was not taught in law school.
Brad: Okay. Well, I guess the audience is probably wondering, but did it work? [00:05:00]
Michael: Well, that’s the best part. That’s why it’s one of my favorite stories because it turned out to be some of the best legal advice I’ve given, which maybe not. It’s not a compliment to my other legal advice.
Brad: Yeah, let’s cut that out.
Michael: It’s the best outcome. We’ll just call it that. So the lady wasn’t so frustrated because over the years of people putting out her window with having a house on a golf course and then not taking responsibility for it, that the fact that he kind of came to her and apologized and offered money, she actually started thanking him profusely. And she ended up having all these kind of benefits by being a member at this club, and she gave him a free round of golf the next day. She gave him a gift certificate to eat at the club restaurant that evening. And Dr. Fore and I were talking, and pretty sure the value of what he received [00:06:00] back then was well over $500.
Brad: Yeah, I remember you walking in our office afterwards and you were laughing about how random stuff just pops up. But for our audience, Michael, what was the lesson learned?
Michael: Brad, that’s why this couldn’t be a full episode because we were just winging it and it turned out well, so I don’t think there’s a teachable legal lesson here. I guess maybe the moral of the story is to turn into your problems when you have them, but even that’s not necessarily going to guarantee you’re going to get that steak dinner like Dr. Fore got.
Brad: Yeah, no doubt. Well, thanks for taking us down memory lane, but I guess since our audience is still with us, let’s get into today’s story.
Michael: Let’s get started. Brad, our client in today’s story is named Dr. Doolittle.
Brad: Michael, I need some serious context here. Now, as you know, I love movies, but there’s literature out there. And are you talking about the character that Eddie Murphy played in a [00:07:00] version of his movie, Dr. Doolittle? Or are we going with Robert Downey Jr. Character who’s a little more edgy because he’s Robert Downey Jr., Obviously, he played in a different Dr. Doolittle movie?
Michael: Well, I can appreciate the need for context, Brad, but you are coming in pretty hot with your questions to start this off. So, I named our character, our client today after the straight-laced character played by Eddie Murphy. And Dr. Doolittle tended to all the chaos around him and the animals that he treated.
Brad: Okay. Sorry for the sidebar, but you may proceed.
Michael: So Dr. Doolittle in our story today is a successful plastic surgeon. His practice is a hundred percent cosmetic surgical procedures, and he had hired someone we’ll call Dr. Fudge as an employed plastic surgeon to join the practice.
Brad: You know, I kind of vaguely remember the movie Dr. Doolittle. I don’t remember there being a Dr. Fudge. Should I do I dare ask why the name Dr. Fudge?
Michael: [00:08:00] Let’s just say the reason for his name will reveal itself shortly.
Brad: Fine for now. All right. For context, let’s define what you mean. You said by an “employed plastic surgeon”.
Michael: Yeah, fair. For our longtime listeners, you’ve may have heard us talk about employed physicians in various shows, and this is exactly what it sounds like. The surgeon is legally an employee of the practice. They often should have employment agreements, and so they’re not actually a legal partner or an owner of the practice. The reason it’s even worth mentioning is because oftentimes the outside world’s not going to even know this. The outside world often perceives all the doctors of a practice to be partners because of the way practices routinely kind of hold them out as a “partner” of the practice. And legally speaking, they may be an employee. And that can be really important when you’re talking about stories like the one we have today, where you have [00:09:00] a different type of a relationship, an employer employee relationship.
Brad: And for audience members, if you’re following, that means the employed plastic surgeon has all the professional responsibilities to make all the independent medical decision-making as a physician, but does not have any of the responsibilities of being an owner of a business, which are two different hats they can wear.
Michael: So, Brad, on a random Monday, I receive a call from Dr. Doolittle and asked if I had a few minutes.
Brad: Was he on the golf course? No, no, no, that was a different story. That’s right.
Michael: That was a Friday.
Brad: You know, those calls sometimes can be very scary as you sometimes just sense it’s a bomb just waiting to be dropped on you.
Michael: In this case, Brad, it was bombs away.
Brad: No.
Michael: Though it did start kind of with a little mild disturbance.
Brad: Okay. What do you mean by mild disturbance?
Michael: So, Dr. Fudge had just left Dr. Doolittle’s office, and he had come in kind of sheepishly [00:10:00] to give him a heads up that the husband of a patient had called and threatened him professionally and personally for allegedly having an affair with his wife. And so, of course, Dr. Doolittle was calling me to kind of get some thoughts and feedback on this. The husband was threatening to call Dr. Fudge’s wife. The husband was threatening to call the practice and to turn him into the medical board among other things.
Brad: Okay, I hope this doesn’t have anything to do with how you named our naughty character today.
Michael: Oh, Brad, you had to go there. No, Brad, get your mind out of the gutter. The answer still has not revealed itself yet.
Brad: Okay. Yeah. Well, you are handling a 13-year-old boy next to you. Okay, what in the world did Dr. Doolittle say?
Michael: Well, he did a great job in [00:11:00] interacting with Dr. Fudge, and he asked the obvious question, the one I was wondering, well, is it true?
Brad: Oh, yes. So let’s go there. What did Dr. Fudge say?
Michael: He said, “Oh, no, the patient’s crazy.” That she had started becoming obsessed with Dr. Fudge after he had operated on her and given her breast implants.
Brad: So did Dr. Doolittle accept this explanation?
Michael: Well, he didn’t reject it, but it wasn’t adding up, and so he didn’t accept it either. He just kept asking follow up questions and Dr. Fudge would reveal a little bit more information like pulling on the thread. And so he kind of then admitted a little more that, “Well, she was sending Dr. Fudge texts with pictures of her breast.”
Brad: Okay. Now, audience member, just to understand that’s not necessarily a bad sense, he did operate on her breast. Believe it or not, this type of stuff is not uncommon, even though I could take us on a long tangent on the whole HIPAA issue. [00:12:00]
Michael: Brad, why would you try to ruin a good story by even saying the word HIPAA?
Brad: Sorry, us geeky. Privacy/HIPAA attorneys can ruin a good story. All right, just please delete that comment and pretend I never said it. So as I said, I don’t see anything nefarious with this when sending pictures of her breasts in this context.
Michael: Well, did I mention Brad, that she was not wearing any clothes when she sent the picture, and it was more of a full body shot?
Brad: No, I don’t remember hearing that detail. I, I actually think I would have remembered that statement. This is starting to cross the line, Michael.
Michael: Yes. So the thread kept getting pulled on Dr. Fudge kept giving additional little nuggets where he finally admitted to engaging in some inappropriate texts, but nothing happened physically. So it was now, well, it was all her. And then, well, maybe I kind of did some inappropriate texts back, but again, nothing happened physically. [00:13:00]
Brad: Does this have to do with his nickname?
Michael: You guessed it, Brad. Dr. Fudge would show himself to be a liar, and the lies never seemed to stop.
Brad: Please don’t tell me that Dr. Fudge actually slept with his patient. Because that’s a big line to cross.
Michael: Well, Brad, as you’ll soon learn, Dr. Fudge crossed a lot of lines, which was all in the medical board complaints filed against him by several patients.
Brad: Oh, no. He really fudged up.
Michael: First Dad joke of the year. It was so painful. All right, Brad, let’s go into commercial, and on the other side, let’s talk about this story from the view of Dr. Doolittle and the issues he faced as the employer with an employed surgeon giving him these partial truths that, let’s face it, implicated patient safety.
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Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host Brad Adatto, my co-host, Michael Byrd. Now Michael, this season, our theme is Operating a Business and we’re talking about the real stories or more important, real client stories where problems do pop up in the operating season, which kind of leads to crisis’ and which leads to potentially calls to your attorneys. And boy did you start the season off with a doozy. [00:15:00] And I believe, Michael, you started really to unpack of what the world, Dr. Doolittle had to deal with, with this new information that he had from Dr. Fudge, which was kind of fudging a little bit on the facts here.
Michael: Yeah. And I think what we can do during this kind of application section, Brad, is kind of walk through the journey through the eyes of Dr. Doolittle, the issues he had to deal with, because it’s not as simple as, oh, you crossed the line, you’re fired. Like, there’s a bunch of stuff to unpack. And so, the first thing Dr. Doolittle did after getting to this conversation was to tell Dr. Fudge that until this was sorted out, he was not to interact with this patient. He also took them off the surgery schedule as he did not want to endanger patients if there was a problem. Because remember Brad, at this point in the story, [00:16:00] Dr. Doolittle only knew what Dr. Fudge had admitted to at that point. And that was that he had exchanged inappropriate text.
Brad: Yes. Naughty on him for inappropriate text. But let’s pause for a moment and remember that there’s a duty of a physician and the practice to make sure that there is overall safety of the patient is never jeopardized no matter what course of the treatment is in that that physician patient relationship. And when that patient safety is jeopardized, it is the obligation of that physician and or sometimes the supervising physicians and sometimes the practice, to really step in and prevent the harm and stop the harm from continuing. And for those who don’t know, failure to do so can obviously cause that physician, and obviously the practice itself subject to both board actions, which you kind of alluded to, and obviously civil liability issues.
Michael: Yeah. I mean, if you think about this, this is [00:17:00] the first moment in time where the nature of this being an employer employee relationship kind of reveals a different type of thinking even as it relates to patient care. So as you noted, I mean now you’ve got an employer who is over this doctor, even though the doctor has an independent license. And so, if something were to go wrong, would the practice be liable because he didn’t interfere knowing what he knew? And then same with the same with the boards, if there was an investigation. But again, beyond the patient care, there is employee issues by this employer employee relationship. So, Dr. Doolittle also documented Dr. Fudge’s employee file kind of as a next step and then continued his investigation to try to figure out what actually happened.
Brad: Yeah. And that’s a good point for Dr. Doolittle [00:18:00] as far as a check the box kind of moment. Look again, as an employer you have many duties and one of which is when an employee is performing inappropriate manners, not only do you need to step in and stop it, but as an employer from your employer’s perspective, you really should start documenting the actions that the employee took and what you did, and then obviously document it in the file because you never know when that’s going to come up later on. And clearly in this case, the employer hopefully had a really good employee handbook in place. And a good employee handbook is really going to gain you the insight that you need as to what are the processes that you need to do and how you document that. The actions that the employee took, and then how did you go to that investigation that he started to, to open up. Because a lot of times an employee handbook, it’s going to have that processes put together, and you want to follow that as the employer. And as this particular story adds some confusion because you’re sitting there thinking, wait, [00:19:00] this is an employee issue, but I thought you said it was a patient issue. But they’re under the exact same facts and circumstances. So you have the typical employee employer relationship issue, but you also have patient safety issues that you have to be concerned with. So it really falls into two different buckets. Every practice should have a good employee handbook. But in this particular case, because we had patient safety involved, it adds an additional layer on the safety side.
Michael: Yeah. And audience, it’s important to know – we know kind of where this story is going. It made a podcast episode, so we all kind of can see the title of it is pretty revealing of what happened. But in reality, if you put yourself in the shoes of Dr. Doolittle at this moment in time, there is a possibility that this is a patient that he didn’t sleep with, and that the doctor didn’t do anything wrong. And so, it is equally protective to follow your handbook and do the [00:20:00] investigation in case it turns out that it’s untrue. And so, Dr. Doolittle did a good job of kind of following the process with some pretty inflammatory information. However, Bradwithin about five days, Dr. Doolittle did learn enough information through his investigation that he knew he had to fire Dr. Fudge.
Brad: I think you kind of did a little hat tip earlier about to what it was, but let the audience know what was the tipping point.
Michael: Well, you reminded me recently of the quote that I said to you when… So Dr. Dr. Doolittle had gotten word but didn’t have confirmation that Dr. Fudge had confessed to his wife, so he was pretty sure another threat. So Dr. Doolittle confronted him and [00:21:00] is like, “Hey man, I’m hearing that you’re confessing to this, did you sleep with your patient?” And he said, “well, I may have” and he used the F word “my patient,” to which you and I both cracked up thinking. How did you not remember what’s the may? So yes, after the investigation, it ended with a confession when he was basically cornered and so he had slept with a patient.
Brad: Yeah. And audience members, that’s not the appropriate physician patient relationship that’s supposed to be having.
Michael: Is that the takeaway for today’s episode?
Brad: Yeah. But it sounds like he really was again fudging in his words since the beginning of the conversations that he had with Dr. Doolittle.
Michael: Yes, Brad, you’re having a field day today with your dad jokes. [00:22:00] Not only was he sleeping with the patient, we also learned, Brad, that he was prescribing her narcotics.
Brad: Oh, no.
Michael: And this was well past the recovery time from her surgery.
Brad: Yeah. Well, for those probably following, well, the decision to fire is obvious. I have to wonder whether there was an employment agreement to deal with on top of all this.
Michael: Great point. And one last thing, which is kind of funny I just remember, that when he said he may have slept with her, his next excuse was, but she wasn’t no longer a patient. But then the fact that he was prescribing her narcotics made her an ongoing patient at the time. So, it was just a gift that kept on giving Brad.
Brad: Oh, goodness.
Michael: And thankfully, yes, there was an employment agreement. It was a great question. There was an employment. So we had to evaluate when we’re thinking about terminating the contract or firing [00:23:00] Dr. Fudge, the notice provisions to be able to properly terminate the relationship.
Brad: So in this agreement, was there a provision that says you can terminate if you sleep with your patient and prescribe them narcotics after the fact and keep sleeping with them?
Michael: Well, not literally. I don’t think that should be on the table on something you should have to put in a contract. But there are what we call bad boy clauses in most employment agreements or bad girl clauses, that allow for immediate termination for cause.
Brad: Let’s be honest, audience members, normally it is a bad boy, but he definitely was a bad boy. Was that the end of it for Dr. Fudge?
Michael: No. Dr. Fudge decided that he was going to open up his own practice down the street.
Brad: Oh, no. You said there’s an employment agreement. Did he have a non-compete?
Michael: Yes, Brad, he had a non-compete, [00:24:00] and Dr. Doolittle sued him. And that became its own thing. Dr. Doolittle had his employment attorney, they got into it and Dr. Fudge ended up writing a check for $600,000 to Dr. Doolittle to buy out of his non-compete.
Brad: Wow. Dr. Fudge is really living up to his name, so let me start again. Was that the end of it for Dr. Fudge?
Michael: No, Brad, Dr. Fudge, as I said, was the gift that kept on giving Dr. Doolittle was dragged through the medical board investigation that was started against Dr. Fudge. As the medical board complaint noted, not only was Dr. Fudge prescribing controlled substances and having an affair with the patient, but even worse, Brad, here’s a new string that came out.
Brad: Oh, no.
Michael: Dr. Fudge decided, I guess, that he wanted a little side hustle income. [00:25:00]
Brad: You mean different side hustle than this patient?
Michael: Yes. That’s a different kind of hustle. This was more of a revenue type hustle. And so he decided that he was going to operate on patients on the weekends at another OR suite, a facility that was closed. And so, he had a key and he would take them in there and it was really more like an exam room, like not a true operating room. And so he would bring an anesthesiologist and put them under and put the NFL football on the TV while he was doing these cases. This is all in the medical board case. This is not like additional fluff to make this more exciting. This is exactly what happened. And so, of course, Dr. Doolittle knew none of this.
Brad: Yeah. And I mean, first off, that’s a giant no-no across the board, as you can tell, but I’ll just talk about, just in general. [00:26:00] So this case, Dr. Doolittle, our client, unfortunately has a bad actor in his office. And even though as you’ve explained, he did a really good job of dealing with patient safety immediately and dealing with the issues surrounding as an employer, following the process, and really working through that, that doesn’t prevent you that when you have a bad actor inside of your practice that you can’t, as the good guy, in this case, Dr. Doolittle, the hero of this story, who can get sucked in to these medical board investigations. And if I remember correctly, luckily had a good documentation about what he did internally because he ended up, if I remember correctly, had to cancel surgery and go down there. This is back nowadays in this case, he actually had to go to Austin, Texas to testify and explain to what happened on his knowledge of what was going on. And that’s again, this is the worst case [00:27:00] scenario for most owner operators that you have to go deal with it. But the good news is, he did everything properly when he found out this issue. So, Michael, whatever happened to Dr. Fudge and more importantly Dr. Doolittle?
Michael: Yeah. Well, so the good news, as you just alluded to, because of the way Dr. Doolittle handled this, from the moment he became aware, he never was the target of the medical board. And sometimes even when you do the right thing, the medical board will start trying to get everybody. And so, it did end up being more a consumption of Dr. Doolittle’s time because he was a witness to this. Ultimately, the medical board suspended Dr. Fudges license based on all these allegations. Dr. Doolittle was mortified to have his practice dragged into this matter. This ended up making the news, [00:28:00] and it was multiple publications. It was a trying time for our Dr. Doolittle, but he got out of it relatively un escaped. Not to mention the fact that he got that $600,000 check after Dr. Fudge started competing and then got his license yanked. So, what a way to start our season, the crisis season, the running of business season, Brad. What are your final thoughts?
Brad: Yeah, and this story demonstrates for audiences where threats come from for many different practices. And I say this from a practice perspective, your threats typically can come from your patients, they can come from your employees and sometimes they can come from competitors. And this is a story that you’re just sitting there operating, doing your stuff. And Dr. Doolittle had hired someone he thought would be a great surgeon, and sometimes these organizations, [00:29:00] you’re not prepared for when that crisis happens. And I’ll say for Dr. Doolittle, the good news was, when the crisis happened, he handled it because he had everything he needed in place. He had employment agreements, he had the handbook in place, he filed the handbook. He didn’t let the initial – obviously he had to have those hard conversations with him. He didn’t just let it kind of go away.
And in doing so as an owner and operator, you need to think of other things besides potential. You know, and I don’t know this to be true, he and Dr. Fudge could have been good friends outside of this event. And then when this event happens, you as an owner operator have to think of number one, we talked about patient safety and how to protect yourself and making sure that you’re doing the right thing. But number two, there is deep civil liability that could happen if you could let this person continue to behave that way in that same manner. And then as you alluded to at the end – and you could get sucked into a board investigation where you, yourself, the owner operator can also get your hand slapped. So, I think the story demonstrates of how [00:30:00] quickly things can escalate and how important it is to really have the right tools in place when something bad happens like this. But Michael, I think we’re getting near the end of the day, so what’s your final thoughts?
Michael: Well, interestingly, there’s actually, if you go back to our golfer, Dr. Fore and Dr. Doolittle, there is some commonality. They both were dealing with a crisis, right? And one of the things they both did right, was when the fire hit, they called me and not you. But no, I mean, in all seriousness, they called me because when a crisis hits, you have to assess the situation, you’ve got to come up with a strategy and you got to execute on the strategy. Now, the golfing thing was kind of fun, but it is an illustration of the greater thing that happens during the operating season of a business. Something goes down and you need to deal with it immediately and come up with a plan of action before it [00:31:00] turns into a dumpster fire, which is a whole different kind of season.
Brad: Absolutely. Well, Michael, next Wednesday we have series regular, Jay Reyero, is back with us. He’s going to join us and talk about, unfortunately, the worst case scenario from a medical provider when a patient dies. Thanks again for joining us today. And remember, if you like this episode, please subscribe, make sure to give us a five star rating and share with your friends.
Michael: You can also sign up for the ByrdAdatto newsletter by going to our website at byrdadatto.com.
Outro: ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Please consult with an attorney on your legal issues. [00:32:00]
