Freedom to Contract?

In this case, Dr. S. was a member of an oncology group at a prominent Chicago-area hospital. While he was respected for his medical acumen, Dr. S. did not always get along with his peers in the Group or with the rest of the hospital staff, some complaining that he was abrasive and condescending. The Group's leadership informed the hospital that Dr. S. was undermining them and disrupting their relationship with the hospital. All of this was particularly troubling because the Group was the hospital's exclusive provider of oncology services and was required to dedicate its full time to the hospital's oncology needs.

As the Group's contract with the hospital came up for renewal, the hospital expressed concerns with the Group's performance and notified it that unless certain changes were made, it would be replaced. Although hospital representatives denied that firing Dr. S. would solve the problems, the Group believed that it would go a long way toward guaranteeing the renewal of the contract. In the final days leading up to the expiration of the contract, the Group sent Dr. S. a letter terminating his employment for cause, based on a provision in his employment agreement that allowed him to be terminated if he engaged in conduct that jeopardized the Group's relationship with the hospital. On the same day that his termination became effective, the hospital agreed to extend the Group's exclusive contract for another term. Dr. S. thereafter negotiated a voluntary resignation from the Group, which included a substantial severance payment and the withdrawal of his prior notice of termination for cause.