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Donald Sesso v. Mercy Suburban Hospital

March 13, 2013

DONALD SESSO, PLAINTIFF,
v.
MERCY SUBURBAN HOSPITAL, DEFENDANT.



The opinion of the court was delivered by: Rufe, J.

MEMORANDUM & ORDER

Plaintiff Dr. Donald Sesso alleges that Defendant Mercy Suburban Hospital terminated his employment because of his age, and in retaliation for his complaints of age discrimination, in violation of the Age Discrimination in Employment Act ("ADEA") *fn1 and the Pennsylvania Human Relation Act ("PHRA"). *fn2 Before the Court is Defendant's Motion for Summary Judgment on all claims.

I. FACTUAL BACKGROUND

In accordance with this Court's instructions, the parties have submitted a statement of stipulated material facts. *fn3 The Court summarizes herein only those stipulated facts necessary to its decision.

Donald Sesso was born in 1945. He earned a Doctor of Osteopathic Medicine and certification in Internal Medicine and Diseases of the Chest. From about 1975 until 2003, Dr. Sesso was an employee of Internal Medicine Associates ("IMA"), with medical privileges to treat inpatients at Mercy Suburban or its predecessor entity, Suburban General. He practiced both pulmonology and internal medicine. On July 1, 2003, Dr. Sesso and the other physicians employed by IMA became full-time employees of a subsidiary of Mercy Suburban, East Norriton Physician Services, Inc. ("ENPS"). Dr. Sesso and a colleague, Dr. Koehler, a gastroenterologist, entered into three-year contracts. They continued to provide outpatient medical care as well as providing inpatient care after becoming employed by ENPS. Under the 2003-2006 contract, Dr. Sesso worked full-time for an annual salary of $135,000.

In 2006, the parties negotiated a new contract. Dr. Sesso requested a renewal of his employment contract, but asked for the new contract to include a small reduction in hours (to 35-40 hours per week), a reduction in weekend and night coverage hours, extra physician help on weekends when the hospital census was over 20 patients, and an increase in hourly pay. CEO Mark Barabas informed Dr. Sesso that he was not in a position to grant a pay raise or add weekend staff, and noted his concern that Dr. Sesso's practice had netted only $151,000 in the 2005 calendar year, which covered the cost of his salary but did not fully cover the cost of his benefits. Ultimately the parties entered into a contract, agreeing that Dr. Sesso would work 26 hours per week, would not be on-call on the weekends, and would receive a salary of $75,000. When Lisa Mallon replaced Barabas as CEO of Defendant, Dr. Sesso informed her that he would prefer more hours. They informally agreed that he would work an additional 4-5 hours per week for hourly pay.

In December 2008, Dr. Sesso initiated discussion about renewal upon expiration of his second contract. In a letter to Ms. Mallon, he indicated overall satisfaction with his duties, but requested an increase in pay and "a gradual reduction in night-call over the next three years."

CFO Peter Kenniff testified to "understanding" that Dr. Sesso's 2006-2009 contract would be "the last contract." *fn4 Dr. Sesso testified that he remembered Mr. Kenniff and Ms. Mallon expressing their belief that Dr. Sesso would be retiring at the end of his 2006 contract, and the acting Chief Medical Officer, Dr. Wayne Miller remembers Chief Financial Officer Peter Kenniff "talking about the fact that [he and Ms. Mallon] were both thinking along [the] lines" that Sesso was retiring. Nevertheless, the parties did engage in on-going dialogue about the renewal of Dr. Sesso's contract during the first half of 2009.

In late February or early March, Defendant put Mr. Kenniff in charge of negotiating physicians' contracts. Dr. Sesso sent Mr. Kenniff a handwritten note on February 27, 2009, requesting a renewal of his contract for 24-32 hours per week at "hourly compensation which is comparable to my peers." Dr. Sesso offered to expand his pulmonary outpatient office practice, but was told by Mr. Kenniff that there were not enough patients to support doing so, and that increasing a pulmonary practice was not aligned with Defendant's strategic plan.

In March 2009, administrators asked Dr. Sesso whether he could work additional hours while one of his colleagues was on maternity leave. He indicated that he could work an additional 6 1/2 hours per week with inpatients, but his blood pressure affected how much "high intensity work" he could add. He estimated that he could see one patient per hour.

On June 30, 2009, Defendant informed Dr. Sesso, then age 63, that it would not renew his contract and that his employment would be terminated as of August 31, 2009. The same letter informed Dr. Sesso that, effective July 1, 2009, Montgomery Asthma, a pulmonology group with privileges to practice at Defendant, would be providing pulmonary care, *fn5 and that Defendant was hiring a Hospitalist to support inpatient care. *fn6 Dr. Sesso was kept on for an additional two months after the end of his contract term to ensure a smooth transition.

Defendant's employees have testified that Dr. Sesso did not have enough pulmonary inpatients to warrant keeping Dr. Sesso on in that role. The hospital was in need of a full-time Hospitalist, and Mr. Kenniff believed Dr. Sesso was unwilling to function in that role. They have also testified that Defendant contracted with a group of seven Intensivists, *fn7 who had practice privileges at Mercy Suburban, to provide pulmonary and other medical care to patients in the intensive care unit at the hospital. Neither Mercy Suburban nor ENPS hired or assigned a physician to assume Sesso's prior duties in the IMA office or at the Norristown State Hospital. ENPS did hire an additional full-time Hospitalist, Dr. Genevieve Skalak, approximate age 29, who, together with the Intensivists and Montgomery Asthma provided inpatient pulmonary care.

Dr. Sesso complained in March 2009 and possibly again in May 2009 about Defendant's assumption that he would be retiring, and felt, but may not have stated, his belief that his age was a factor in Defendant's decision not to renew his contract.

In August 24, 2004, Dr. Sesso's IMA colleague, Dr. Koehler, then age 70 or 71, who had also entered into a three-year contract with ENPS in 2003, entered into a revised contract to reflect a change from full-time to part-time employment. At the end of his revised contract term, in 2006, he was offered a second three-year employment contract, with a further reduction in responsibilities and salary for the third year of the contract. Dr. Koehler testified that he asked to extend his contract for an additional year after the expiration of the second contract in 2009, and was told that he was expected to retire and that ENPS would not consider retaining him for an ...


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