By Greg Care

I have blogged previously about the problem of courts taking a hands-off approach to medical residents’ and fellows’ lawsuits alleging discrimination in adverse actions like dismissals, non-renewals, and non-promotions. One such blog, published just eight months ago, discussed a troubling decision by a federal court in Pennsylvania that gave a residency program heightened “academic” deference for its decision to fire a resident. Often, decisions like this are premised on the notion that residency is primarily an educational pursuit, in which courts should be loathed to intervene.

Fortunately, a recent court decision in California now provides a much better reasoned counterpoint to the line of cases that mistakenly give residency programs a presumption of good faith in disciplining their residents.

Earlier this month, the California Court of Appeal (Second District) unanimously decided in Khoiny v. Dignity Health, for the first time under California law, that “the predominant relationship between a medical resident and a hospital residency program is an employee-employer relationship and so academic deference does not apply to the jury’s determination whether the resident was terminated for discriminatory or retaliatory reasons.” Slip op. at 2. Put another way later in the opinion, the Court declared: “[T]here is no such thing as ‘academic deference’ in a California employment case. Nor should be there. FEHA[, the law prohibiting discrimination in employment,] is a power tool in the effort to root out and stop discrimination. There can be no argument that academics are entitled to special treatment or special exceptions in this regard.” Id. at 21.

In reaching the underlying conclusion about employee status for residents, the Court was persuaded in large part by the fact that: at least two-thirds of residents’ time is spent providing patient care, the National Labor Relations Board and the California Public Employees Relations Board classify residents as employees for purposes of union-related issues, and the U.S. Supreme Court has held that residents’ pay is not subject to the student exemption for payroll taxes. The Court also looked to the record in the case, finding that the reasons Dr. Khoiny was terminated from the residency program related to alleged deficiencies in clinical performance or personality issues, which are distinct from what are traditionally “academic” performance issues.

The Court then clarified how lower courts should analyze lawsuits brought by medical residents who allege discrimination. First, it declared that “the jury should be instructed to evaluate, without deference, whether the program terminated the resident for a genuine academic reason or because of an impermissible reason such as retaliation or the resident’s gender.” Next, it concluded that a suitable model for assessing residents’ discrimination claims is that of denial of tenure cases alleging discrimination, specifically a case decided by the U.S. Court of Appeals for the District of Columbia Circuit called Mawakana v. Board of Trustees of the University of the District of Columbia, because of the similar “mixture” of academic and non-academic issues that may be present. Adopting the rationale in Mawakana, the California Court of Appeal pointed out that, in discrimination cases, it is necessary to evaluate the evidence for whether an academic institution’s adverse decision was made in good faith in the first place, and not simply assume that it was because of the academic nature of the institution.

The Khoiny decision points out an important fact: “judges and juries are as equipped as anyone to decide whether an academic institution acted in good faith or for discriminatory reasons. One does not have to be an academic to ferret out discrimination or retaliation in an academic workspace.” Slip op. at 21. And because such claims can be established when the discriminatory or retaliatory reason for discipline was at least a “motivating factor” in the decision being contested, a plaintiff “need not disprove that her allegedly poor academic performance was a factor, or show that her performance was not poor.” Id. at 23.

With that important issue now clarified, Dr. Khoiny will now have the opportunity she should have had for a jury to determine if her evidence of retaliation and gender discrimination was a motivating factor in her termination. Beyond this case, I hope courts across the country take note of this decision and provide the level playing field that residents and fellows deserve.

In these high-stakes matters, it is crucial to know the legal landscape of residency- and fellowship-related disputes. I would urge all medical residents and fellows who are facing remediation, probation, non-promotion, suspension, non-renewal, dismissal, or refusal to graduate to reach out to see how we may be able to assist.

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