Business Law

Khoiny v. Dignity Health (2022) 76 Cal.App.5th 390 [2022 WL 794826]

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The rule of academic deference is no defense against a medical resident’s FEHA discrimination and retaliation claims.

A Dignity Health hospital dismissed Dr. Noushin Khoiny after her second year of a three-year internal medicine residency. She sued Dignity, alleging retaliation and gender discrimination in violation of the Fair Employment and Housing Act (FEHA). The trial court gave the jury an “academic deference” special instruction: because the residency program was “academic in nature,” Dignity’s “academic judgment” to dismiss Dr. Khoiny should not be overturned “unless it is found to have been arbitrary and capricious, not based on academic criteria, or motivated by retaliation or discriminatory reasons unrelated to her academic performance.” The special instruction directed the jury to uphold Dignity’s dismissal decision “unless you find its decision was a substantial departure from accepted academic norms as to demonstrate that [Dignity] did not actually exercise professional judgment.” The verdict form included similar language. The jury found for Dignity. Dr. Khoiny appealed, asserting instructional error.

The Court of Appeal reversed. Deciding an issue of first impression, the court held that academic deference does not apply to hospital residency programs. Although residency programs have educational and training aspects, the “predominant relationship between a medical resident and a hospital residency program is an employee-employer relationship.” Accordingly, Dr. Khoiny, like all FEHA plaintiffs, may prevail by proving that gender or retaliation was a substantial motivating factor for her termination—even if other factors also motivated it. The special instruction was erroneous because Dignity’s dismissal was not entitled to a presumption of correctness, and because Dr. Khoiny was not required to disprove Dignity’s claim that her academic performance precipitated her dismissal. The error was prejudicial because, viewing the evidence in the light most favorable to Dr. Khoiny, a properly instructed jury could have returned a verdict in her favor. The court remanded for a new trial, directing the trial court to instruct the jury “to evaluate, without deference, whether the program terminated [Dr. Khoiny] for a genuine academic reason or because of an impermissible reason such as retaliation or the resident’s gender.”

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, who are partners at the appellate firm Horvitz & Levy LLP, and is republished with permission.

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