Pharmacist Terminated in Violation of Public Policy?

Joseph l. Fink III, BSPharm, JD
Published Online: Friday, December 14, 2012
Follow Pharmacy_Times:



A pharmacist whistleblower is fired for working off the clock. 


Issue of the Case

A pharmacist in a Western state became concerned about some billing practices of his chain pharmacy employer, calling them to the attention of appropriate governmental officials. When he subsequently was terminated, could he maintain a lawsuit against the employer alleging he was let go for reporting the inappropriate billing practices when the employer identified an alternative reason for the termination?

Facts of the Case

The pharmacist-plaintiff in this case was employed as a “non-exempt” employee, meaning that he was compensated on an hourly pay basis. His pharmacy chain employer mounted an initiative to reduce expenses, including pay for overtime work by pharmacists. In 2 consecutive years, the pharmacist had worked in excess of 1000 overtime hours.

Discussions ensued, as part of the cost- reduction initiative focused on time the pharmacist had worked “off the clock.” The result was an agreement by employer and employee that included a commitment by the employee to no longer work without first clocking in. The pharmacist was alerted that failure to adhere to this commitment could lead to “discipline, up to and including termination.”

A year after that matter was concluded, the pharmacist raised complaints about what he felt were improper or fraudulent billing practices at the chain’s pharmacies. His focus was on the practice of using “IOU labels” when the pharmacy had an insufficient supply of medication to dispense the full quantity needed. In such cases, the pharmacy chain would bill for the full quantity at the time of dispensing the partial quantity, with the balance noted by generating a label covering the quantity outstanding.

The pharmacist called his concerns about this practice to the attention of several officials of the pharmacy chain. He also notified the US Department of Health and Human Services as it related to Medicare claims as well as the state agency that administered the Medicaid program.

The pharmacist participated in a conference call while on vacation. He later indicated that he was not seeking pay for that time, but that he was concerned that working while “off the clock” might violate his earlier agreement with the chain. The result was that he received a “Final Written Warning” about working “off the clock.”

He continued to provide information to government and company officials regarding the medication billing issues. He also continued to work for the chain, allegedly working beyond his shift without authorization on numerous occasions.

Eventually he was terminated from employment. As a result, he filed suit against his former employer, alleging retaliatory discharge, ie, punishment for engaging in some legally protected activity for his pursuit of the fraudulent billing practice matter with governmental agencies. The defendant pharmacy chain moved for summary judgment, essentially asking the judge to determine that there was no genuine issue as to any material fact that would require a trial.

The Court's Ruling

The chain’s motion for summary judgment was denied. The judge ruled that the pharmacist had presented sufficient information to establish that there was a genuine issue of material fact.

The Court’s Reasoning

The court found that “timing alone can be sufficient” to establish a prima facie case. There was a short period of time between the pharmacist telling his supervisors he had specific examples of billing fraud and the termination. Second, there was no dispute that the employment decision makers knew about the pharmacist’s reports to governmental officials and that was weighed as part of the decision to terminate his employment. Third, this pharmacist had been treated differently from other pharmacists employed by the chain with regard to warnings, a requirement to seek approval to work extra time by e-mail from a supervisor, and the termination for working beyond schedule. Fourth, the firm deviated from its own published personnel policies by failing to give him a warning for working beyond the hours scheduled before presenting him with the Final Written Warning. Fifth, the employer first discharged the employee and then subsequently inquired whether the store manager had authorized the extra working time, failing to make that inquiry before the termination of employment. And in addition to several other possible deficiencies in the handling of the matter, the employer waited 7 months after issuing the Final Written Warning to check the pharmacist’s work time records.

The law of the state applicable to the case is that if an employer terminates an employee for a reason contrary to a fundamental public policy then that employee may recover damages in a lawsuit. The pharmacist needed to show that he engaged in protected activity, ie, reporting potentially fraudulent claims to the government, that he was subjected to an adverse employment action, and that a causal link existed between the two. If all 3 can be established, that is a prima facie case for the plaintiff-pharmacist and the legal burden then shifts to the employer to show a legitimate, nonretaliatory basis for the termination. The court concluded that a genuine, material dispute existed and, as a result, entering summary judgment for the employer was not appropriate.


Dr. Fink is professor of pharmacy law and policy and Kentucky Pharmacists Association Endowed Professor of Leadership at the University of Kentucky College of Pharmacy, Lexington.


Related Articles
Resources to help jump-start your pharmacy networking.
A case involving a modified medication schedule and a transcription error that may have contributed to a patient's demise.
The implementation of the Affordable Care Act demands changes in the way that primary care practices and pharmacies operate, but they may be too busy to make the necessary adjustments.
A pharmacist is fired and points out that the employer may have violated public policy because she objected to activities and qualifications of pharmacy technicians assigned to assist her.
Latest Issues
$auto_registration$