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Doctor blew whistle on fraud; gets fired; must arbitrate some claims

Ronald Vanderlaan, M.D. was hired by Michigan Medical, M.D. and Robert Wolyn, M.D. and required to sign a generic arbitration agreement with the firm.  When he later complained about illegal and fraudulent billing practices and attempted to clean them up, he was suspended by the defendants. After he reported the illegal conduct to the Inspector General of the U.S., he claims he was wrongfully terminated.  When he sued under the Whistleblower Protection Act (WPA), the defendants argued that his statutory rights must be submitted to arbitration, rather than going to court.

In prior Michigan decisions the courts have held that a general arbitration agreement in an employment contract cannot waive specific civil rights, such as the right to be free from discrimination, unless the agreement meets five caveats for fair procedure:  there must be a clear waiver of the specific right to seek judicial relief, the employee must enjoy the right to counsel, a neutral arbitrator, reasonable discovery and a fair hearing.  The courts have applied these same protections to mandatory arbitration of statutory rights such as the WPA.  On the basis of this precedent, the Court of Appeals concluded that the defendants could not require Vanderlaan to arbitrate his WPA claims.

The court went on to hold, however, that Vanderlaan could not join his wrongful discharge and infliction of emotional distress "tort" claims in the Circuit Court action, as the employment agreement was a valid waiver of these common law rights.  Therefore, he must pursue the latter state law claims in a separate arbitration venue--even though the "arbitrability" of claims is "liberally" favored, according to the opinion, solely for the purpose of preventing dissection of related claims. 

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
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