Health Care Whistleblower Claim Sufficiently Alleged; Arbitration Decision That Termination Was For “Just Cause” Did Not Preclude Retaliation Claim

In Von Maack v. Wyckoff Heights Med. Ctr., 140 A.D.3d 1055 (N.Y. App. Div. 2d Dept. June 22, 2016), the court held that (1) an arbitration determination that plaintiff was terminated for just cause did not collaterally estop her from pursuing a retaliation claim under New York’s “health care whistleblower law”, codified at New York Labor Law § 741, and (2) plaintiff’s complaint stated a cause of action under that statute.

The facts, briefly:

The plaintiff was employed by the defendant as a staff registered pharmacist from November 15, 2004, until her employment was terminated on August 11, 2011. The plaintiff’s union challenged the termination, and the matter was heard in an arbitration proceeding. The arbitrator determined that the termination, which had occurred after a sequence of uncooperative behavior, was for just cause based on an incident in which the plaintiff refused to accept a delivery of medication.

Collateral Estoppel

Initially, the court held that the arbitration determination did not preclude plaintiff’s subsequent claims under the doctrine of collateral estoppel:

Under the doctrine of collateral estoppel, a party may not relitigate in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same. However, [c]ollateral estoppel applies only if (1) the issue sought to be precluded is identical to a material issue necessarily decided by the [prior tribunal] in a prior proceeding; and (2) there was a full and fair opportunity to contest this issue in [that] tribunal. [C]ollateral estoppel effect will only be given to matters actually litigated and determined in a prior proceeding. Because the issue of retaliation raised by the plaintiff in this action was not actually litigated in the arbitration proceeding, the plaintiff cannot be collaterally estopped from litigating that issue in this action.

Pleading Sufficiency

Next, the court held that plaintiff sufficiently alleged a violation of the Labor Law. “Labor Law § 741(2) provides that no employer shall take retaliatory action against any employee because the employee … discloses or threatens to disclose to a supervisor, or to a public body an activity, policy or practice of the employer or agent that the employee, in good faith, reasonably believes constitutes improper quality of patient care.”

In this case, “plaintiff sufficiently pleaded that she was an employee as defined by Labor Law § 741 by alleging that she was responsible for compounding medications, compounding chemotherapy and consulting with physicians, nurses and patients.”

The court explained that “for pleading purposes [for a Labor Law § 741 cause of action], the complaint need not specify the actual law, rule or regulation violated, although it must identify the particular activities, policies or practices in which the employer allegedly engaged, so that the complaint provides the employer with notice of the alleged complained-of conduct.”

Applying the law to the facts, it concluded that “plaintiff sufficiently identified the activities, policies, and practices in which the defendant allegedly engaged and which may have presented a substantial and specific danger to public health or safety or a significant threat to the health of a specific patient.”

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