Baker-Heser v. State

309 Neb. 979

963 N.W.2d 59

Natalie BAKER-HESER, M.D., and Stacey Werth-Sweeney, appellants,

v.STATE of Nebraska and Nebraska Department of Health and Human Services, appellees.

No. S-20-758.

Supreme Court of Nebraska.

Filed August 13, 2021

David A. Domina, of Domina Law Group, P.C., L.L.O., Omaha, for appellants.

Heidi A. Guttau, of Baird Holm, L.L.P., Omaha, for appellees.

Heavican, C.J., Cassel, Stacy, Funke, Papik, and Freudenberg, JJ., and Welch, Judge.

Cassel, J.

INTRODUCTION

Two employees of a state hospital highlighted deficient recordkeeping by hospital psychiatrists. Following an investigation, the Nebraska Department of Health and Human Services (DHHS) fired the two employees. These former employees sued DHHS, alleging violations of the Nebraska Fair Employment Practice Act (NFEPA)¹ and the Health Care Facility Licensure Act (HCFLA).² The district court dismissed the HCFLA claims on sovereign immunity grounds and granted DHHS’ motion for summary judgment on the NFEPA claims. Because the former employees did not show that they complained about an unlawful practice of DHHS and because the State did not waive its sovereign immunity for claims under the HCFLA, we affirm the district court's judgment.

BACKGROUND

LINCOLN REGIONAL CENTER

DHHS operates the Lincoln Regional Center (LRC). The LRC is a state hospital.³ Because many psychiatrists will not work at state hospitals, the LRC has difficulty recruiting psychiatrists. The LRC is licensed under an administrative regulation⁴ and is obligated to meet requirements specified in state⁵ and federal⁶ regulations. Requirements include having medical staff bylaws⁷ and maintaining medical records.⁸

KEY EMPLOYEES AND EVENTS

Stacey Werth-Sweeney (Sweeney) began employment at the LRC in 1989. Following a number of promotions, she became the facility operating officer in 2010. In that capacity, Sweeney's job duties included working with department heads to ensure policies and procedures were current, to ensure staff were trained, to lead quality improvement, and to oversee crises. She tracked any documentation delinquency and reported it to the medical director each month.

In 2015, the LRC rehired a psychiatrist, whom we will refer to as "Psychiatrist 1." The LRC knew that he had a long history of being delinquent in his medical recordkeeping. Psychiatrist 1 is Indian.

In February 2016, the LRC hired another psychiatrist, whom we will refer to as "Psychiatrist 2." When hired, Psychiatrist 2 had a private practice in Illinois and the medical director allowed him to continue his private practice for 1 year. In 2018, Psychiatrist 2's private practice remained open, resulting in his absence every other Monday and Tuesday. Psychiatrist 2 is Iranian.

In January 2017, Psychiatrist 2 received a written warning due to his failure to adhere to LRC's bylaws and agency values. Two months later, he filed a charge of discrimination against DHHS, alleging whistleblower retaliation for complaints he had made beginning in February 2016. In November 2017, Sweeney emailed a complaint about Psychiatrist 2's abusive behavior to the director of the division of behavioral health with DHHS and to Bo Botelho, DHHS’ chief operating officer and general counsel. In December 2017, a psychologist emailed a complaint to Botelho and DHHS’ director of human resources regarding unprofessional behavior by Psychiatrist 2.

On March 12, 2018, Natalie Baker-Heser, M.D. (Baker), became the LRC's medical director. Her job duties included providing leadership to medical staff at the LRC and promoting a sense of teamwork. Baker supervised six psychiatrists. Three of those six psychiatrists, including Psychiatrist 1 and Psychiatrist 2, were not current with patient documentation. The LRC's medical staff bylaws authorized the medical director to initiate investigations and to summarily suspend a practitioner when the practitioner's conduct threatened the life of a patient. And as a physician, Baker had a mandatory reporting obligation.⁹

In April 2018, Baker, along with the facilities director and a human resources partner, met with Psychiatrist 1 to discuss his more than 200 delinquent records (mostly patient contact notes and progress notes) and how they could assist him in becoming current. Approximately 5 weeks after becoming the medical director, Baker began recommending the employment termination of Psychiatrist 1 and Psychiatrist 2 (collectively the Psychiatrists). She observed numerous violations of medical recordkeeping requirements by them. Baker believed that the entire patient population cared for by Psychiatrist 2 was at risk and that noncompliance with laws and regulations involving patient safety put the LRC's accreditation at risk. According to Baker, LRC policies contain time requirements for completion of progress notes and assessments.

INVESTIGATION

In mid-April 2018, Grant Dugdale, an attorney, joined DHHS. He reported to Botelho. Dugdale had practiced law for over 30 years and had significant experience conducting workplace investigations. Soon after Dugdale started, Botelho asked him to advise Baker on issues related to Psychiatrist 2. Dugdale described being in a "counseling role" with Baker in which he was trying "to figure out what was going on, what her concerns were, how to address those concerns." Shortly after Dugdale did that, Botelho instructed him to conduct a " ‘top to bottom’ " investigation of the LRC. Botelho issued an oral directive that DHHS was putting all employment-related decisions and terminations on hold at the LRC pending completion of Dugdale's investigation. DHHS put disciplinary actions on hold during the investigation because it wanted to ensure that there were legitimate, nondiscriminatory reasons for terminating the Psychiatrists’ employment.

Dugdale completed his investigation within 1 month. As part of his investigation, he prepared interview summaries of the employees with whom he spoke. He learned from Sweeney that she had concerns regarding Psychiatrist 1's history of being late with patient documentation and that she had a history of conflict with Psychiatrist 2. The director of nursing told Dugdale that she believed Sweeney overstepped her bounds and interfered with nursing decisions. Dugdale learned from Baker that she wanted to immediately suspend Psychiatrist 1 due to his late documentation and that she wanted to terminate Psychiatrist 2's employment due to concerns about his delinquent patient documentation, his absence to attend to his private practice in Illinois, and his hostility toward others.

Dugdale concluded that the LRC was in dire need of leadership changes.

Dugdale recommended terminating Baker's and Sweeney's employment. He claimed that Baker failed to talk with the Psychiatrists about her concerns with their performance in any meaningful way before recommending their firings and that Baker's actions could expose DHHS to liability for discrimination claims. Dugdale noted Sweeney's history of interfering with or making clinical medical decisions, retaliating against individuals, and forcing employees to leave the LRC. On June 12, 2018, DHHS fired Baker and Sweeney. DHHS terminated the employment of the Psychiatrists 4 to 5 months later.

LAWSUIT

Baker and Sweeney (collectively the former employees) sued the State and DHHS (collectively DHHS) and requested a jury trial. The complaint alleged that DHHS retaliated against the former employees for "[r]efusing to conceal, and reporting violations of, and attempting to enforce, patient-protection laws" in their respective positions. According to the complaint, DHHS thwarted them from completing necessary administrative actions to protect patients and personnel from wrongful acts.

The former employees alleged that they observed and reported instances in which the Psychiatrists did not complete vital records such as reports and competency examinations and failed to complete psychiatric admission assessments and discharge summary reports on a timely basis. They claimed that the Psychiatrists’ failure to abide by medical recordkeeping requirements placed patients in danger, inhibited effective care, violated patients’ rights, delayed court proceedings which depended on timely and complete psychiatric records, endangered the community, placed the LRC's continued accreditation at risk, and undermined the LRC's mission and goals. The former employees alleged that DHHS prevented investigation, discipline, or remedial action against the Psychiatrists. They asserted that DHHS’ active attempts to conceal or permit deficient recordkeeping constituted an unlawful practice.

The former employees also alleged that they repeatedly reported to DHHS numerous complaints of harassment, intimidation, and abuse by Psychiatrist 2 made by several female DHHS employees. However, they later abandoned this claim in the district court.

The complaint asserted that the terminations were contrary to § 48-1114, to § 71-445, and to public policy. The former employees demanded "trial by jury on all issues so triable." With regard to § 48-1114, the former employees alleged that their actions and reports related to the Psychiatrists’ unlawful practices—i.e., failure to comply with federal and state regulatory requirements concerning creation and maintenance of medical records—constituted protected activity. Pertinent to § 71-445, they alleged that DHHS’ motivation for terminating their employment was their opposition to the Psychiatrists’ violation of the regulatory scheme set forth in statutes and regulations.¹⁰

MOTIONS TO DISMISS CLAIM AND STRIKE JURY DEMAND

DHHS filed a motion to dismiss two of the claims for each former employee and to strike the jury demand. DHHS alleged that the wrongful discharge in violation of public policy claims should be dismissed due to noncompliance with the State Tort Claims Act and that the HCFLA claims should be dismissed because the State had not waived sovereign immunity for such claims. There is no...