Women's Care Specialists, P.C. v. Potter

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Women's Care Specialists, P.C. v. Dr. Margot G. Potter

Dr. Karla Kennedy, Dr. Elizabeth Barron, and Beth Ann Dorsett v. Dr. Margot G. Potter

Nos. SC-2022-0706, SC-2022-0707

Supreme Court of Alabama

May 19, 2023

Appeal from Jefferson Circuit Court (CV-21-903797) (CV-21-903798)

COOK Justice

These consolidated appeals arise out of an employment dispute between Dr. Margot G. Potter and her former employer Women's Care Specialists, P.C. ("Women's Care"), and out of a dispute between Potter and three Women's Care employees -- Dr. Karla Kennedy, Dr Elizabeth Barron, and Beth Ann Dorsett ("the WC employees").

In case no. CV-21-903797, Potter alleged claims of defamation tortious interference with a business relationship, and breach of contract against Women's Care. In case no CV-21-903798, Potter alleged claims of defamation and tortious interference with a business relationship against the WC employees.

After the cases were consolidated by the Jefferson Circuit Court, Women's Care and the WC employees filed motions to compel arbitration on the basis that Potter's claims were within the scope of the arbitration provision in Potter's employment agreement with Women's Care and that the arbitration provision governed their disputes even though Potter was no longer a Women's Care employee. In short, the arguments concerned whether Potter's claims are within the scope of the arbitration provision, whether the arbitration provision continued to apply after the "termination" of her employment, and when that termination occurred. The trial court entered an order denying those motions. Women's Care (appeal no. SC-2022-0706) and the WC employees (appeal no. SC-20220707) separately appealed; this Court consolidated the appeals.

For the reasons stated below, in appeal no. SC-2022-0706, we reverse the trial court's order denying Women's Care's motion to compel arbitration. In appeal no. SC-2022-0707, we reverse the trial court's order denying the WC employees' motion to compel arbitration.

Facts and Procedural History

On December 10, 2015, Potter, an obstetrician and gynecologist, entered into an employment agreement with Women's Care, which operates a medical clinic in Birmingham that specializes in obstetrics and gynecological services. Three years later, the employment agreement was amended.^[1]

In that amended employment agreement, Women's Care and Potter agreed to the following regarding termination of her employment:

"12. Termination. [Potter's] employment shall be terminated upon the happening of any of the following events:

"12.1 Notwithstanding any of the provisions of this Agreement, upon at least ninety (90) days' prior written notice served by either [Women's Care] or [Potter] upon the other, in which event [Women's Care] shall have the right at any time during the ninety (90) day notice period to terminate [Potter's] services, provided that [Women's Care] shall continue to pay [Potter] her normal compensation pursuant to this Agreement ... for the remainder of the notice period ....''

(Bold typeface in original; emphasis added.) Section 13.1 of the amended employment agreement further defined "termination of employment" as

"any termination of employment pursuant to Section 12 of this Agreement or, if and only so long as applicable, any other termination or deemed termination of employment with [Women's Care], ... including any situation where the facts and circumstances indicate that [Women's Care] and [Potter] reasonably anticipated that no further services would be performed after a certain date ....''

(Emphasis added.)

Next, in Section 22.2 of the amended employment agreement, Women's Care and Potter agreed to resolve "any and all disputes related in any manner whatsoever to [Potter]'s employment" by arbitration. Specifically, they agreed

"to resolve any and all disputes related in any manner whatsoever to [Potter]'s employment with [Women's Care] by binding arbitration. [Women's Care] and [Potter] further agree to select the American Health Lawyers Association ... to arbitrate the dispute. ... Disputes relating to employment include, but are not limited to, ... claims based upon tort or contract laws or any other federal or state law affecting employment in any manner whatsoever."

(Emphasis added.) Section 22.4 of the amended employment agreement provided the sole exception to this arbitration provision for "suits brought on behalf of [Women's Care] or [Potter] seeking a temporary restraining order, preliminary injunction and/or permanent injunction ('injunctive relief')." No other exceptions to the arbitration provision were made for any other forms of liability between the parties. In fact, in Section 17 of the amended employment agreement, Women's Care and Potter agreed that the termination of the agreement -- whether through the termination of Potter's employment or otherwise -- "shall not affect any liability or any other obligation of either party to the other which may have accrued prior to such termination."

On September 23, 2021, Women's Care gave Potter a "notice of termination" that stated:

"Pursuant to Section 12.1 of the Employment Agreement between you and [Women's Care] dated December 10, 2015, as amended (the 'Employment Agreement'), notice is hereby served that your employment with WCS is being terminated. In accordance with Section 12.1 of the Employment Agreement, you are entitled to ninety (90) days' notice of termination. Therefore, your employment with [Women's Care] will terminate effective December 22, 2021. As we have advised you, [Women's Care] has exercised its right under the Employment Agreement to pay your normal compensation during the 90-day notice period and require you to cease performing services and vacate the premises immediately."

(Emphasis added.) Potter ceased performing services on behalf of Women's Care that same day.

Over the next couple of months, per the terms of Section 12.1 of the amended employment agreement, Women's Care paid Potter her normal compensation and apparently intended to do so until December 22, 2021, at which point the 90-day notice period would be over, thereby officially marking the end of Potter's employment with Women's Care.

According to Potter, after she received her termination letter and ceased performing services on behalf of Women's Care, the WC employees and others began making remarks to her former patients that, she alleges, were an attempt to "take over [her] practice." Those remarks included statements such as:

• Potter "is staying at home with her husband and children."

• "We don't know where [Potter] is."

• Potter "has relocated to Florida."

• Potter has "been arrested."

• Potter has "retired and [is] not practicing medicine."

She also alleged that Women's Care and the WC employees tried to prevent her patients from finding out if she was still practicing so that they could continue their medical care with her.

On November 22, 2021, Potter began working for another medical practice in Birmingham. At that point, Women's Care ceased paying Potter her "normal compensation" as required under Section 12.1 of the amended employment agreement.

A month later, Potter commenced two separate actions -- one against Women's Care in which she alleged claims of tortious interference with a business relationship, defamation, and breach of contract and another against the WC employees in which she alleged claims of tortious interference with a business relationship and defamation. As stated previously, those actions were eventually consolidated.

In response, Women's Care and the WC employees filed motions to compel arbitration. In its motion, Women's Care argued that, because Potter's claims against it related to her employment with Women's Care and because they had agreed in the amended employment agreement to resolve "any and all disputes related in any manner whatsoever to" Potter's employment with Women's Care through arbitration, those claims were subject to arbitration. In support of its motion, Women's Care attached, among other things, copies of the amended employment agreement and Potter's termination letter.

In their motion to compel arbitration, the WC employees raised many of the same arguments that Women's Care made in its motion. They also attached the same exhibits in support of their motion.

In her response to the motions, Potter acknowledged that her breach-of-contract claim against Women's Care was subject to arbitration but disputed that her tort claims against all the defendants were subject to arbitration. According to Potter, contrary to the contentions of Women's Care and the WC employees, her employment with Women's Care terminated on September 23, 2021 -- the day she received her termination letter -- and not on November 22, 2021. Because her tort claims were based on incidents that, she said, occurred after her employment with Women's Care came to an end, they did not "relate in any way whatsoever" to her employment with Women's Care and, thus, were not governed by the arbitration provision in the amended employment agreement.

Following additional filings, the trial court entered an order denying the motions to compel arbitration on June 22, 2022. In appeal no. SC-2022-0706, Women's Care challenges the trial court's denial of its motion to compel arbitration. In appeal no. SC-2022-0707, the WC employees challenge the trial court's denial of their motion to compel arbitration.

Standard of Review

This Court has stated:

"'"'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v Yarbrough, 779 So.2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell,

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