An informative case regarding constructive discharge of pharmaceutical and medical employees is Smith v. LHC Group, No. 17-5850, 2018 WL 1136072 (6th Circuit March 2, 2018). There the director of nursing reported to management certain health care fraud by co-employees. However, the profitable fraudulent practices continued, leaving Smith the choice of turning a blind eye which could cause criminal charges against her and the loss of her nursing license, or resign. The Sixth Circuit held that plaintiff nurse was constructively discharged, in a thorough and reasoned opinion.
The plaintiff’s case of constructive discharge would have been even stronger had she been personally instructed act in violation of law.
Note that HIPAA provides stiff fines and imprisonment for those that violate its provisions. Under 42 U.S.C. 1320d-6, violation of HIPAA by unauthorized access to PHI carries a maximum $50,000 fine, up to 1 year imprisonment, or both. If done for commercial advantage, the fine increases to $250,000 with 10 year imprisonment.
Sales representatives, employees, and contract workers who refuse the employer’s directions due to HIPAA violation concerns may find themselves between a rock and a hard place–eventual discharge or criminal law violations.
Kurt H. King, Missouri attorney
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