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Bereston v. UHS of Delaware, Inc.

Court of Appeals of The District of Columbia

March 8, 2018

Katayoon Bereston, Appellant,
UHS of Delaware, Inc. and District Hospital Partners, LP, d/b/a George Washington University Hospital, Appellees.

          Argued December 10, 2015

         Appeal from the Superior Court of the District of Columbia (CAB-416-14) (Hon. John M. Mott, Trial Judge)

          Keith Lively, with whom Andre P. Barlow was on the brief, for appellant.

          Alan S. Block, with whom Nadia A. Patel was on the brief, for appellees.

          Before Glickman and McLeese, Associate Judges, and Ferren, Senior Judge.



         Katayoon Bereston appeals the dismissal of her complaint under Superior Court Civil Rule 12 (b)(6) for failure to state a claim upon which relief can be granted. At issue are two counts in which Ms. Bereston invoked the District of Columbia's judicially-created public policy exception to the doctrine of at-will employment. In the first count, Ms. Bereston asserted that George Washington University Hospital ("the Hospital") wrongfully terminated her employment as its Director of Admissions due to her refusal to violate federal law. In the second count, Ms. Bereston complained that she was subjected to harassment at the Hospital prior to her termination in retaliation for her insistence on strict compliance with federal health care laws and regulations.

         Although an at-will employee who is discharged for refusing to violate the law (or for other reasons that transgress a clear mandate of public policy) may have a common-law cause of action for wrongful termination, we affirm the dismissal of Ms. Bereston's claims. We hold that the first count of her complaint fails to plead facts sufficient to state a plausible claim that Ms. Bereston's refusal to break the law was the sole or predominant reason for her firing. As to the second count, Ms. Bereston concedes that it does not state a cognizable claim under current law. Although this court has held that termination of employment in contravention of public policy may be actionable, we have not extended that holding to adverse employment actions other than termination. Ms. Bereston urges us to expand the public-policy exception to the at-will employment doctrine so as to permit claims "where the employee has been harassed, retaliated against, and suffered other adverse employment actions short of termination for conduct in furtherance of public policy."[1] Even if this court might consider undertaking that task without legislative direction, however, this is not an appropriate case in which to do so, because Ms. Bereston's complaint fails to plead facts sufficient to state a plausible claim of actionable harassment or retaliation prior to her discharge.


         Before summarizing the allegations in Ms. Bereston's complaint, we set forth the standards under which we will evaluate their sufficiency. We review de novo a trial court's dismissal of a complaint for failure to state a claim upon which relief can be granted.[2] "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'"[3] The "[f]actual allegations must be enough to raise a right to relief above the speculative level"[4]:

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. . . . Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'"[5]

         "When there are well-pleaded factual allegations, a court should assume their veracity[, ]"[6] but that tenet does not extend to "a legal conclusion couched as a factual allegation[.]"[7] "Bare allegations of wrongdoing that 'are no more than conclusions are not entitled to the assumption of truth, ' and are insufficient to sustain a complaint."[8] In Twombly, for example, considering a complaint charging a violation of the antitrust laws, the Supreme Court held that the plaintiffs mere assertion that the defendants had entered into an unlawful agreement to prevent competition and inflate prices was a conclusory allegation not entitled to the benefit of the assumption of truthfulness.[9] Importantly, for present purposes, the Supreme Court made clear in Iqbal that allegations of motive, animus, purpose, knowledge, intent and the like are subject to the requirement that they must be supported by well-pleaded factual allegations in order to be accorded the presumption of veracity.[10] The same holds true for conclusory assertions of retaliation, intimidation, harassment, and other forms of hostility.[11]


         Ms. Bereston's complaint presents the facts underlying her claims as follows.

         The Hospital hired Ms. Bereston on October 3, 2011, to serve as its Director of Admissions. Her duties in this position included "ensuring" that the Hospital complied with laws and regulations affecting its operations. On several occasions, as the complaint details and we shall describe, Ms. Bereston called attention to improper practices that could have exposed the Hospital to significant legal and financial liability. Her successful insistence on changing those practices allegedly alienated staff and physicians, and while her superiors agreed to the changes, they found fault with Ms. Bereston's rigorous performance of this aspect of her job. The discontent and hostility that Ms. Bereston encountered is the subject of the second count of her complaint (for retaliatory harassment). It also set the stage for the Hospital's ultimate decision to terminate Ms. Bereston's employment after a physician threatened to leave the Hospital because of her adamant refusal to satisfy a long-standing request for additional staffing - a refusal based on Ms. Bereston's belief that granting the request would jeopardize the privacy of patient health information in violation of the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). Ms. Bereston's termination is the subject of the first count of her complaint (for wrongful discharge).

         Ms. Bereston's compliance-related difficulties at the Hospital allegedly began at the outset of her two-year tenure as Director of Admissions, in October 2011, when she found that Emergency Room patients were being asked how they would pay for treatment before they were screened by a triage nurse. Understanding this practice to be in violation of the federal Emergency Medical Treatment and Active Labor Act ("EMTALA"), [12] Ms. Bereston "immediately" changed the process to comply with the law by moving admissions staff into the treatment area and implementing "bedside registration." In early 2013, Ms. Bereston persuaded the Hospital to stop admitting overflow medical and surgical patients into the acute rehabilitation unit in violation, as she understood, of regulations promulgated by the federal Centers for Medicare and Medicaid Services ("CMS"). In the summer of 2013, Ms. Bereston asserted that the so-called "Stark Law"[13] prohibited the Hospital's collection of copayments on behalf of physicians who referred Medicare and Medicaid patients to it. Although the affected physicians were displeased, the Hospital agreed to cease that practice. Throughout her tenure, moreover, Ms. Bereston was "vigilant in identifying situations where potential HIPAA violations could arise" and "made sure her staff and appropriate personnel were informed, updated regularly and trained on HIPAA law and regulations[.]"[14]

         Instead of receiving support and appreciation for her efforts, Ms. Bereston alleges that she encountered opposition and hostility. When Ms. Bereston reported the changes she had made to the Emergency Room admissions process to comply with EMTALA to Rick Davis, the Hospital's Chief Financial Officer and her supervisor at the time, he initially disagreed with them and thought them unnecessary. However, Mr. Davis "reluctantly agreed" to the changes after the Hospital's Director of Risk confirmed that Ms. Bereston was correct. Even so, unhappy members of the admitting staff, who "wanted to do things the way they had always been done, " allegedly "called Ms. Bereston names, made remarks about her race, and were openly insubordinate"; one of them "screamed in her face" when she tried to explain the new procedures.

         In March 2012, Mr. Davis convened a meeting of the Hospital's entire admissions staff. The meeting provided an opportunity for staff to "voice their frustration" with Ms. Bereston and her disruption of their work routine; she "was forced to listen to a long list of frivolous and petty complaints" from admissions staff who "condemned her for being mean and difficult to approach." After the meeting, Mr. Davis took Ms. Bereston aside and "told her one-on-one that she needed to be more friendly and 'to ease up on the regulations.'"[15]

         Ms. Bereston perceived that her subsequent efforts to bring the Hospital into compliance with federal laws and regulations were also unpopular; the complaint alleges in general terms that Ms. Bereston was treated with hostility and "bullied and ridiculed by both staff and her superiors[, ]" but it provides few if any specifics to substantiate that she suffered such treatment or that her superiors opposed the changes she recommended. In addition to what has been quoted already in this opinion, the complaint states only that when Ms. Bereston advised Hospital officials of the "Stark Law" violation, "an associate administrator . . . ridiculed [her] for not spelling the name of the law correctly in an email, " and Mr. Davis admonished her for spelling and grammar mistakes. Ms. Bereston also alleges that she "sought psychiatric care to cope with the intense hostility she faced on an almost daily basis" from the staff and the physicians who were discontented with the new processes and procedures she instituted.

         The complaint states that in 2013, Kimberly Russo, the Hospital's Chief Operating Officer, "accused" Ms. Bereston of lacking "influence leadership" and not being "a team player." Ms. Russo allegedly blamed Ms. Bereston for her staff's poor performance and high turnover rate (which Ms. Bereston acknowledges were problems), while physician and staff complaints about her "were always taken at face value and often handled unprofessionally by both Ms. Russo and [Hospital] human resources staff."[16] The complaint also alleges that "Ms. Russo and others continued systematic assaults on Ms. Bereston's authority by not supporting [her] efforts to earn the respect of and goodwill with the physicians and staff[, ]" as when her requests for schedule changes and additional staff to "ease the burden on her overworked" Admissions Department employees were denied.

         Ms. Bereston asserts that, by tolerating the discontent and hostility she allegedly endured and withholding their full support for her efforts, senior Hospital officials were "deliberately undermining [her] authority and diminishing her ability to perform her duties" because her efforts to "stop the Hospital from continuing to break the law" were (supposedly) having "a perceived and actual effect on [the Hospital's] immediate revenue stream." The complaint does not substantiate these conclusory allegations of wrongful motive, however; nor does it allege that Ms. Bereston's ability to perform her duties actually was impaired. On the contrary, Ms. Bereston alleges that "adherence to compliance was her job and responsibility, which she took seriously and performed well"; that she "fulfill[ed] her employment responsibilities with extreme care"; and that she again and again had "proven her value" to the Hospital by "performing her job" and correcting unlawful practices at the Hospital.

         The incident that allegedly precipitated Ms. Bereston's termination arose not from a change that she initiated, but rather from a requested staffing change that she refused to make. The request came in the summer of 2012, when a physician, Dr. Rachel Brem, sought changes in the intake process at the Hospital's radiology clinic (which Dr. Brem managed) because patient registration was too slow. Dr. Brem requested that six admissions registrars be assigned to the clinic to handle the patient registration in situ. Ms. Bereston told her that because the registration area was small and insufficiently private, it would be "impossible" to install more than three registrars without violating HIPAA and its privacy regulations.[17] The issue was brought to the attention of Ms. Russo, and Ms. Bereston was instructed to "work with other [Hospital] staff on solutions to satisfy Dr. Brem's concerns without violating HIPAA."

         In May 2013, when a solution had not been devised, [18] Dr. Brem again complained and insisted that the number of admissions registrars in her clinic be increased from three to six. By this time, other physicians also were complaining about registration delays and demanding more admissions personnel. The physicians threatened to refer their patients elsewhere if the Hospital did not satisfy their concerns. The complaint does not explain why Ms. Bereston (or the Hospital) did not respond to the concerns of the physicians other than Dr. Brem; Ms. Bereston does not allege that HIPAA restrictions or other legal requirements prevented her from doing so.

         On September 6, 2013, Ms. Russo met with Ms. Bereston and issued her a Performance Improvement Plan ("PIP"). The PIP gave Ms. Bereston ninety days to improve but also provided for a review after thirty days, at which time she could be terminated pursuant to the Hospital's progressive discipline policy. Ms. Bereston's complaint does not recite the PIP's contents except to say that it "accused" her of lacking qualities of "leadership" and "satisfaction" and mentioned "feedback from our corporate partner" as the reason for the discipline.[19] Although Ms. Bereston was not told what the "feedback" was, her complaint alleges that it "related to [her] insistence that [the Hospital] comply with various laws and regulations." The complaint contains no factual allegations supporting this assertion as to the nature of the "feedback." Nor do Ms. Bereston's factual allegations support her complaint's conclusory assertion that the PIP "was not justified and was a classic employer attempt to create a pretext for termination."

         According to the complaint, "[i]t was clear to Ms. Bereston that this PIP was issued by Ms. Russo to lay the groundwork to fire her at the next opportunity." Nonetheless, after thirty days, Ms. Bereston had not come up with a HIPAA-compliant solution to Dr. Brem's problem (and the complaint does not allege that Ms. Bereston made progress in any other area). On October 18, 2013, Dr. Brem confronted Ms. Bereston at the radiology clinic.[20] Angrily "accusing her of not knowing anything, not fixing anything, [and] not taking responsibility, " Dr. Brem allegedly demanded six registrars for her clinic "or she would walk out of the Hospital, taking her practice and her patients with her." Ms. Bereston "reluctantly" proposed a compromise plan to provide "up to five" admissions personnel plus a "floating manager, " although she privately believed this would be "stretching HIPAA to the absolute limit, and that the demands placed upon the floating manager would be untenable." Dr. Brem rejected this proposal and reiterated her demand for six registrars immediately or the Hospital "would start losing business." Ms. Bereston refused to provide six registrars. The following week, she was called to Ms. Russo's office and her employment was terminated.

         Ms. Bereston was given no official explanation for her discharge. Her complaint asserts that the Hospital terminated her because of her refusal to break the law to satisfy Dr. Brem and other MFA physicians.[21] "Also part of the motivation to terminate Ms. Bereston, " the complaint states, "was simple laziness and a refusal to confront physician and staff discontent" arising from her implementation of changes that "often came at the expense of convenience for the physicians and staff."[22]


         A. Wrongful Discharge

         1. Ms. Bereston's Invocation of the Adams-Carl Exception to Employment at Will

         Ms. Bereston was an at-will employee of the Hospital. "It has long been settled in the District of Columbia that an employer may discharge an at-will employee at any time and for any reason, or for no reason at all."[23] This court has recognized a designedly "narrow" exception to this common-law rule, under which an at-will employee may have a claim sounding in tort for wrongful discharge if the employer's "sole" (or at least "predominant") reason for terminating the employee was the employee's refusal to break the law[24] or was in some other respect contrary to a "clear mandate of public policy . . . ."[25]

         In the first count of her complaint, Ms. Bereston invokes this Adams-Carl exception. She claims the Hospital fired her for refusing to increase the number of admissions registrars and patient intake stations in the radiology clinic from three to six, even though her reason for refusing to do so was that it would have increased the likelihood of unintentional disclosures of confidential patient health information in violation of HIPAA.[26] The complaint does not specify what HIPAA provisions would have been contravened, but Ms. Bereston asserts on appeal that placing as many as six registrars in the clinic would have required her to violate 42 U.S.C. § 1320d-6 and a federal regulation, 42 C.F.R. § 164.530 (c), that was promulgated to implement HIPAA. The statute criminalizes the knowing disclosure of personal health information without authorization.[27] The regulation requires hospitals and other entities to have "appropriate . . . safeguards" and to "reasonably safeguard" the privacy of protected health information.[28] This Privacy Rule provision mirrors HIPAA's statutory requirement that covered entities "maintain reasonable and appropriate administrative, technical, and physical safeguards . . . to ensure the . . . confidentiality" of health information and "to protect against any reasonably anticipated . . . unauthorized uses or disclosures of the information."[29]

         We conclude that Ms. Bereston's complaint fails in two respects to present a plausible claim for relief from her discharge under the Adams-Carl exception to the at-will employment doctrine. First, the well-pleaded factual allegations of the complaint do not show that putting six registrars in the radiology clinic actually would have violated HIPAA by jeopardizing the confidentiality of patient health information. Second, the well-pleaded factual allegations of the complaint also are insufficient to support a plausible claim that the Hospital's sole or predominant reason for firing Ms. Bereston was her refusal to break the law, or that the Hospital's expressed reasons for putting her on a PIP were pretextual. In each of these two respects, we find that the complaint pleads facts that are at best "merely consistent with" the Hospital's alleged liability and so "stops short of the line between possibility and plausibility of 'entitlement to relief.'"[30]

         2. Failure to Plausibly Allege a Violation of HIPAA

         As to the first deficiency, in order to state a plausible claim for relief under the Adams-Carl exception, it is not enough for Ms. Bereston merely to assert that acceding to Dr. Brem's request for six registrars would have endangered the privacy of protected patient information in violation of HIPAA. That is only a conclusion of law. Nor is it enough for Ms. Bereston merely to allege that she acted as she did because she reasonably believed she was refusing to break the law. This court has never held that an employee's reasonable (but wrong) belief that what her employer required her to do was illegal is enough to support a wrongful-discharge claim under the Adams-Carl exception to employment at will. On the contrary, we have expressly declined to "alter our requirement for a remedy for wrongful discharge of an at-will employee to a lesser requirement that the employee have a reasonable belief that he or she is being wrongfully discharged."[31]As other courts have discerned, there is good reason for not extending the exception to employees who were fired for refusing to do what they incorrectly believed was unlawful. We agree with the following explanation by the United States Court of Appeals for the Third Circuit:

The public policy exception to the doctrine of employment at-will does not exist . . . to protect the employee. Rather it is the protection of society from public harm, or the need to vindicate fundamental individual rights, that undergird[s] an at-will employee's common law action for wrongful discharge . . . .
The employee's good intentions are not enough to create a cause of action for wrongful discharge . . . . If an employee can avoid discipline whenever he reasonably believes his employer is acting unlawfully, it is the employee, not the public, who is protected by the good intentions. A company acting within the law is presumed to pose no threat to the public at large. The creation of a cause of action based on an employee's reasonable belief about the law would leave a private employer free to act only at the sufferance of its employees whenever reasonable men or women can differ about the meaning or application of a law governing the action the employer proposes. The effect such a rule might have on corporate governance and the efficient operation of private business organizations is not insignificant. . . . [W]e therefore conclude that a clear violation of public policy depends on an actual violation of law.[32]

         Thus, to state a plausible wrongful discharge claim, Ms. Bereston's complaint must contain factual allegations that substantiate her conclusory assertions and beliefs regarding the illegality of granting Dr. Brem's request. Ms. Bereston's complaint lacks the necessary factual substantiation.

         Absent are any factual allegations clarifying whether, how, or to what extent raising the number of registrars in the radiology clinic from three to six actually would have exposed patient health information to a heightened risk of unintentional disclosure. For example, the complaint does not describe the dimensions or layout of the radiology clinic's admissions area or the space allotted for the transmission and receipt of confidential patient information. It says nothing about the volume of patients the radiology clinic currently serves and how adding registrars would affect the number of persons present at any given time. It does not describe the nature and duration of the registration process or why it might subject protected patient information to increased exposure to bystanders. Assuming that Ms. Bereston's concern was with crowding in the admissions area, her complaint does not identify and describe that putative problem in any way. It says nothing about how close bystanders already were or would be to patients being admitted; whether their proximity already did or would permit them to overhear or glimpse confidential information; or how often such opportunities already occurred or realistically might occur. Similarly, the complaint does not address the availability and efficacy of safeguards to avoid the inadvertent exposure of patient data, such as the placement of partitions between registrars and in positions to block computer screens and sensitive documents from public view.

         In short, the complaint fails to explain in any factual way why the confidentiality of patient health information could be preserved in the radiology clinic admissions area with three registrars, and indeed with the five registrars plus a roving manager that Ms. Bereston counter-offered, but not with six registrars. It is not obvious that increasing the number of registrars to six would be likely to increase the risk of such unintentional disclosures or that measures could not be taken to minimize that risk.[33]

         Moreover, even if there would have been a somewhat greater risk of unintentionally exposing confidential patient health information to bystanders, that does not necessarily mean adding registrars would have violated HIPAA. The Privacy Rule makes clear that HIPAA does not require covered entities to eliminate all avoidable risk of unintentional disclosures of confidential patient information. Rather, 42 C.F.R. § 164.530 (c) requires that "reasonable" and "appropriate" measures be taken to safeguard patient privacy.[34] This is a tacit acknowledgment that perfection is not achievable and that the goal of protecting the privacy of patient health information, while important, justifiably may be balanced against other constraints and imperatives, including the worthy goal (pursued by Dr. Brem in this case) of reducing the time patients must wait before they receive care. In the present case, if doubling the number of registrars from three to six would have cut registration delays substantially (perhaps in half) while only marginally elevating the risk that sensitive patient information would be exposed inadvertently to strangers in the waiting room, that would not seem to be an "unreasonable" or "inappropriate" change.

         Thus, the factual allegations in Ms. Bereston's complaint not only fail to show there would have been a greater risk of inadvertent disclosure of confidential patient health information had she acceded to Dr. Brem's request for three more registrars in the radiology clinic. They also fail to show that any heightening of the risk would have been consequential enough that it would have been forbidden by HIPAA or offensive to a "clear mandate" of the privacy policy declared by that legislation.[35]

         3. Failure to Plausibly Allege an Improper Motive for Discharge

         Turning to the second shortcoming of Ms. Bereston's claim of wrongful discharge, while it is true that her termination came on the heels of her blow-up with Dr. Brem, we perceive the factual allegations of the complaint to be insufficient to support a plausible assertion that the Hospital's sole or predominant reason for firing her was her refusal to violate HIPAA. First, the complaint does not allege that the Hospital ever ordered Ms. Bereston to violate HIPAA in order to keep her job.[36] Nor does the complaint allege that the Hospital agreed with Ms. Bereston that it would contravene HIPAA to place as many as six registrars in the radiology clinic. On the contrary, the complaint actually alleges that the Hospital's Chief Operating Officer, Ms. Russo, instructed Ms. Bereston to "work with other [Hospital] staff on solutions to satisfy Dr. Brem's concerns without violating HIPAA." Nothing in the complaint indicates the Hospital would not have continued to seek a HIPAA-compliant resolution of the problem. Although the complaint conclusorily accuses the Hospital of not caring about its legal obligations when money was at stake, its factual allegations do not justify that accusation. In contrast, the complaint alleges that the Hospital administration had repeatedly agreed to the changes Ms. Bereston called for to comply with the law, even when those changes had dismayed staff or irritated physicians and were deemed to be costly. Evidently, therefore, while it may be inferred that Ms. Bereston's final clash with Dr. Brem contributed to the Hospital's decision to end her employment, that does not mean the decision was made because Ms. Bereston refused to break the law.

         Second, as recounted above, the complaint alleges that the Hospital was seriously dissatisfied with Ms. Bereston's performance as Director of Admissions for significant and identified reasons other than her refusal or inability to satisfy Dr. Brem's request for more registrars (or her insistence on compliance with health care laws and regulation in general). Staff allegedly were dismayed by the disruption of their working arrangements and complained that Ms. Bereston was "mean and difficult to approach." Numerous physicians allegedly complained that Ms. Bereston was not addressing their problems with registration delays and inadequate admissions staffing. Ms. Bereston's supervisors - the Hospital's Chief Financial Officer and its Chief Operating Officer - had counseled her without apparent success on the need to be friendlier and to improve her leadership and personnel management skills. It got to the point that Ms. Bereston's own staff were insubordinate, and that physicians (again, not only Dr. Brem) were threatening to leave the Hospital because she was failing to satisfy their concerns. Eventually, Ms. Bereston was given a Performance Improvement Plan that identified "leadership" and "satisfaction" as the areas in which she needed to show progress. The factual, non-conclusory allegations of the complaint do not support Ms. Bereston's charge that the stated reasons for the PIP were euphemistic or pretextual. It also affirmatively appears from the complaint that, after being placed on the PIP, Ms. Bereston continued to make no progress in accommodating or mollifying the unhappy physicians (nor does she allege that she made progress in any other area). If anything, the situation was only getting worse, as Ms. Bereston's final meeting with Dr. Brem demonstrated. Ms. Bereston attributes the discontent and hostility she encountered to the unreasonableness of staff and physicians unwilling to change their ways or moderate their demands, and there may have been fault on all sides. But as this court said in Wallace,

The narrow exceptions to the "employment at-will" doctrine which we have recognized in Adams and Carl were not designed to prevent an employer from terminating an at-will employee in order to eliminate unacceptable internal conflict and turmoil. It matters little, if at all, who was most at fault. An employer is not required to tolerate an intolerable working environment.[37]

         At best, Ms. Bereston's complaint pleads facts that are merely consistent with her theory of the Hospital's liability. It stops well short of making a plausible showing that the Hospital's sole or even predominant reason for discharging her was her refusal to violate the law or a clear mandate of public policy.

         B. Harassment ...

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