CHICAGO – A federal appeals panel has terminated a doctor's lawsuit against the Mayo Clinic, saying her former employer's decision to rate the doctor's performance as "fair" was an unfair breach of a contract clause forbidding the hospital system from saying anything negative about her to prospective future employers.
On Nov. 1, a three-judge panel of the U.S. Seventh Circuit Court of Appeals ruled in favor of the Mayo Clinic in a lawsuit brought by dermatologist Dr. Elisa Gallo, upholding a similar decision issued by a Wisconsin federal judge in the matter.
U.S. District Judge Thomas Durkin, sitting by designation on the appeals panel, issued a 12-page opinion finding for Mayo. Seventh Circuit judges Diane Sykes and Amy Coney Barrett concurred in the ruling.
Judge Durkin dismissed Gallo's claims and affirmed the summary judgment delivered by District Judge James D. Peterson of the U.S. District Court of the Western District of Wisconsin.
"Drawing all factual inferences in Gallo’s favor, she has failed to show that the credentialing form - even if prohibited by the separation agreement - caused her any harm," Durkin wrote. "Gallo's breach of contract claim fails."
Gallo sued Mayo Clinic over her separation agreement, which contained a clause stating that the clinic was prohibited to say anything negative about her to prospective employers.
She started working as a dermatologist at Mayo in February 2010. A few months later, Gallo allegedly started having performance issues with her supervisor, Dr. Michael White, and Mayo outlined corrective steps so Gallo could keep her employment. Gallo allegedly refused to take the proposed action and as a result, was placed on unpaid leave, according to information supplied in Durkin's opinion.
Soon after the leave began, per the ruling, Gallo "hired an attorney, resigned, and entered into a separation agreement with the Mayo Clinic."
The ruling states the agreement "was intended to prevent the Mayo Clinic from saying anything negative about Gallo in response to employment inquiries."
In June 2013, Gallo was invited to apply for employment at Refuah Health Center in New York, which offered a position and rescinded it two months later. Gallo got a part-time position at Refuah in December 2013 after negotiations.
In order to accept that position, per the ruling, Gallo "had to be credentialed by Mount Sinai to work at Refuah," as the New York hospital was affiliated with the center.
As stated in the ruling, Mount Sinai "sent an affiliation verification form to the Mayo Clinic," in which it asked to "to rate Gallo from 'poor' to 'superior' in 13 categories."
"For 11 out of the 13 categories, White rated Gallo 'superior' or 'good.' White rated Gallo 'fair' on two categories: accepting feedback and ability to work with others," the ruling said.
After the credentialing process, Gallo did not obtain a recommendation for the hiring, and lost the job offer. She alleged Mayo breached the separation agreement.
Gallo is represented in the action by attorney Steven Mora, of Chicago.
Mayo Clinic is represented by attorney Michael Modl, of the Axley Brynelson firm, of Madison, Wis.
U.S. Court of Appeals for the 7th Circuit case number 17-1623