LoPresti v. Rutland Regional Health Services, Inc. (2003-222)

2004 VT 105

[Filed 22-Oct-2004]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2004 VT 105

                                No. 2003-222


  Leigh LoPresti, M.D.	                         Supreme Court

                                                 On Appeal from
       v.	                                 Rutland Superior Court


  Rutland Regional Health Services, Inc.     	 April Term, 2004
  f/k/a Rutland Regional Physician Group, Inc.


  Richard W. Norton, J.

  James A. Dumont of Law Office of James A. Dumont, P.C., Bristol, for
    Plaintiff-Appellant.

  Allan R. Keyes of Ryan Smith & Carbine, Ltd., Rutland, for
    Defendant-Appellee.


  PRESENT:  Amestoy, C.J., (FN1) Dooley, Johnson and Skoglund, JJ., and 
            Gibson, J. (Ret.), Specially Assigned

        
       ¶  1.  JOHNSON, J.   Plaintiff, Dr. Leigh LoPresti, appeals from the
  superior court's summary judgment in favor of defendant, Rutland Regional
  Physician Group, Inc. (Physician Group), his former employer.  Dr. LoPresti
  claims that he was fired for his refusal to refer his patients to certain
  other Physician Group doctors whom he believed provided substandard and
  unnecessary care to his patients.   Dr. LoPresti claims that by firing him
  for this reason, Physician Group violated compelling Vermont public policy
  and the implied covenant of good faith and fair dealing.  Alternatively, 
  he seeks damages under a promissory estoppel theory.  Physician Group
  argued, and the trial court agreed, that because the written employment
  contract allowed for termination "with or without cause" after 180-day
  notice, the reasons for the firing were immaterial as a matter of law.  The
  court granted summary judgment on all counts.  We affirm the court's
  judgment on the implied covenant and promissory estoppel counts, but
  reverse and remand for further development and consideration of the public
  policy count.

       ¶  2.  In July 1994, Dr. LoPresti entered into a "Physician Employment
  Agreement" with Physician Group, a "Vermont Non-Profit Corporation . . .
  rendering professional services through those of its employees who are duly
  licensed to practice medicine in the State of Vermont."  Physician Group is
  not a hospital; it is a business arrangement among a group of doctors. 
  Physician Group employees receive a base salary plus incentive payments,
  group liability insurance, accounting, administrative and marketing
  services, support staff and office facilities.  In exchange, Physician
  Group collects and retains the fees that patients pay to the doctors it
  employs. 

       ¶  3.  Dr. LoPresti's contract was to continue until terminated in
  accordance with Section 1.2 of the agreement.  Notwithstanding any
  provision to the contrary, Section 1.2 set out a number of different
  circumstances under which the agreement could be terminated.  Section
  1.2(c)(ii) states that the agreement could be terminated "[o]ne hundred
  eighty (180) days after written notice of termination with or without cause
  from either party to the other."  The agreement also provides that Dr.
  LoPresti would render medical services primarily at the Manchester Family
  Health Center, "and at such other locations as mutually agreed between [Dr.
  LoPresti] and [Physician Group]."

       ¶  4.  As a primary care physician, Dr. LoPresti often had to refer
  patients to specialists for further care, and, as part of his referral
  responsibility, he would follow up with patients to assess their status
  after receiving specialized treatment. Dr. LoPresti began practicing in the
  Rutland area in 1991.  In his affidavit, Dr. LoPresti stated that, after
  several years in the area, he had familiarized himself with the practices
  of many area specialists.  During the course of his practice with Physician
  Group, Dr. LoPresti developed concerns about the quality of care that some
  of his patients were receiving from particular Physician Group specialists. 
  Dr. LoPresti alleged that one Physician Group doctor, Orthopedic Surgeon
  Doe, (FN2) was "performing unnecessary procedures unnecessarily
  hospitalizing patients."  Dr. LoPresti also concluded that two other
  Physician Group specialists, Obstetrician Doe and Surgeon Doe, were
  "providing clearly substandard care" that had "actually harmed more than
  one patient."  Though he routinely referred patients to other doctors
  within Physician Group, Dr. LoPresti greatly reduced the number of
  referrals he was making to the three specialists or stopped referring
  patients to them altogether.  At one point, Physician Group's President,
  Thomas Huebner, apparently told Dr. LoPresti that Orthopedic Surgeon Doe
  was complaining about the small number of cases that Dr. LoPresti had been
  referring to him. 

       ¶  5.  In 1998, Physician Group officials, including Mr. James Hagen,
  Dr. Robert Cross, and President Huebner, informed Dr. LoPresti that the
  Manchester office, where he worked with one other primary care physician,
  Dr. Leffel, might be closed due to insufficient revenue.  Dr. LoPresti did
  not agree with Physician Group's revenue conclusions and proposed course of
  action.  He requested, and was granted, a meeting with President Huebner
  and Physician Group's Medical Practice Committee (MPC). 
   
       ¶  6.  At the July 1998 MPC meeting, Dr. LoPresti made a detailed
  presentation on the Manchester office revenue situation with suggestions
  for how it could be improved.  After his presentation, Dr. LoPresti was
  asked to leave so that the MPC could meet in executive session.  As a
  result of the July meeting, the MPC decided to move Dr. Leffel to another
  office, close the Manchester office, and terminate Dr. LoPresti's contract. 
  The day after the MPC executive session, Huebner gave Dr. LoPresti written
  notice of termination pursuant to Section 1.2(c)(ii) of his contract. 
  Consistent with the terms of the contract, the letter of termination
  provided no explanation as to why Dr. LoPresti was being fired except to
  say that the decision was made "[a]fter seeking input from the Medical
  Practice Committee as well as the Board of Directors."   

       ¶  7.  Despite its decision to terminate Dr. LoPresti, Physician Group
  did not ultimately close the Manchester office.  Dr. LoPresti asserts that
  he was more senior than Dr. Leffel, was seeing more patients than she was,
  and that he participated on three Physician Group committees while Dr.
  Leffel did not serve on any.  In addition, of all the Physician Group
  primary care physicians, Dr. LoPresti had received the highest satisfaction
  ratings from his patients.  Thanks to Dr. LoPresti's high ratings,
  Physician Group received a financial award from the HMO Kaiser Permanente. 
  Dr. Leffel had not received any comparable recognition.  Dr. Leffel had,
  however, been making regular referrals to the Physician Group specialists
  that Dr. LoPresti avoided using. 

       ¶  8.  Unsatisfied with the circumstances of his termination, Dr.
  LoPresti filed suit in July 2001 alleging breach of contract based on the
  implied covenant of good faith and fair dealing, wrongful discharge in
  violation of public policy, and promissory estoppel.  Initially, Dr.
  LoPresti alleged that Physician Group retaliated against him for his
  frequent complaints regarding proposed benchmarks for physician
  profitability related to the number of patients a Physician Group doctor
  should see in one day.  
   
       ¶  9.  Due to a number of scheduling conflicts, discovery proceeded
  very slowly.  By deposing Dr. Cross, one of the physicians present during
  the MPC executive session when the MPC decided to terminate Dr. LoPresti,
  the doctor learned that there was perhaps another reason why he was
  terminated: his referral practices.

       ¶  10.  Of the Physician Group personnel who were at the MPC executive
  session and were deposed by Dr. LoPresti, only Dr. Cross could remember
  details of the one and one-half hour conversation that took place.  Dr.
  Cross stated that the MPC "talked about Leigh's style of practice, Leigh's
  style of interacting with specialists in the area.  And the feeling - and
  his interaction with other members of [Physician Group], and the feeling
  was that he hadn't created the relationship with the specialists to be
  optimistic that it would grow into the future." Dr. Cross also indicated
  that physicians from other offices lacked enthusiasm about the prospect of
  Dr. LoPresti joining them in the event that the Manchester office was
  closed.  Dr. Cross testified that this feeling was "[m]ostly . . . based on
  that Leigh had created a lot of - I guess had created a lot of lack of
  support by the specialists in the Rutland area.  As the person to lead that
  practice, there were a number of specialists that thought Leigh ought not
  to be the head of the practice there."  When asked to describe the nature
  of the concern raised by the specialists, Dr. Cross responded in part by
  stating that "he [Dr. LoPresti] could have consulted and utilized the
  specialists more for patient benefit."  Prior to the MPC executive session,
  Dr. Cross had also heard complaints from certain specialists about the lack
  of referrals from Dr. LoPresti.  Dr. Cross summed up the situation as one
  of "frustration and dissatisfaction among the specialists."   
   
       ¶  11.  Based on these late-stage revelations, Dr. LoPresti sought to
  amend his complaint to incorporate the allegations that his termination was
  related to his referral practices. (FN3)  Specifically, he alleged that his
  referral practices had been guided by both the American Medical
  Association's Principles of Medical Ethics (AMA Principles) and Physician
  Group's own internal Code of Ethics.  He claimed that the implied covenant
  of good faith and fair dealing prohibited Physician Group from firing him
  for these reasons because doing so would undermine the parties' reasonable
  expectations about the contract's common purpose.  Further, he claimed that
  clear and compelling public policy restrained Physician Group from firing
  him over his referral practices.   He argued that his obligation to abide
  by the ethical code of his profession, thereby protecting his patients,
  took precedence over Physician Group's conflicting demands.     
                                          
       ¶  12.  Physician Group moved for summary judgment on July 15, 2002. 
  In its memorandum of law accompanying its motion, Physician Group argued
  that the contract provision requiring 180- day notice prior to no-cause
  termination controlled the dispute absolutely.  Accordingly, it argued that
  its reasons for termination were immaterial as a matter of law,
  notwithstanding the implied covenant of good faith and fair dealing or
  public policy restraints on contracts.  It argued that no compelling public
  policy supported Dr. LoPresti's theory that Physician Group should have
  been prohibited from firing him because of his resistance to proposed
  benchmarks requiring Physician Group doctors to see a certain number of
  patients per day, or his ethical concerns about referring patients to
  certain specialists.  Physician Group also argued that Dr. LoPresti's
  promissory estoppel claim must fail because that theory is unavailable when
  there is a written contract between the parties, as there was in this case. 
  Further, in its reply memorandum to Dr. LoPresti's memorandum in opposition
  to summary judgment, Physician Group argued that "[p]laintiff has not
  produced admissible evidence of specific facts to show a genuine issue for
  trial as to the alleged reason for termination." 

       ¶  13.  After hearing oral argument from the parties, the trial court
  granted Physician Group summary judgment.  In its opinion and order, the
  court concluded that Dr. LoPresti's assertions regarding the causal
  connection between his discharge and his refusal to refer to specialists
  based on professional ethical objections were immaterial and did not alter
  the right of either party to terminate the agreement for any reason.  The
  only facts that the court considered relevant were the  written contract
  between the parties containing the "with or without cause" termination
  clause and Physician Group's compliance with the clause's terms when it
  terminated Dr. LoPresti.  The court ruled that the reasons why Physician
  Group terminated Dr. LoPresti were "moot, as a matter of law."  The court
  also noted that Dr. LoPresti's complaint had been filed more than one and
  one-half years earlier, and on summary judgment, "other than Dr. LoPresti's
  conclusory allegations, there [was] no evidence of bad faith in [Physician
  Group]'s utilization of the explicit termination clause of the employment
  contract."  For the reasons set forth below, we disagree in part with the
  trial court's ruling, and so reverse and remand for further proceedings.

       ¶  14.  We review a trial court's decision on summary judgment de
  novo, applying the same standard as the trial court.  White v. Quechee
  Lakes Landowners' Ass'n, 170 Vt. 25, 28, 742 A.2d 734, 736 (1999).  Summary
  judgment is appropriate only when there are no genuine issues of material
  fact and a party is entitled to judgment as a matter of law. Id. 
   
       ¶  15.  Before the trial court could rule on the summary judgment
  motion, the parties alerted the court to a stipulation they had reached,
  limiting the issues before the court for purposes of the motion.  At the
  outset of oral argument on the motion, Physician Group's counsel engaged in
  the following exchange with the court:

    MR. KEYES: Part of the reason is that counsel, we're in the
    process of trying to narrow the issues and we did reach an
    agreement that was kind of contingent on the timing of the court's
    consideration. . . .

    TRIAL COURT: Have you done adequate discovery?  There seem to be
    discovery issues that one party, probably the Plaintiff raised,
    that discovery hadn't been completed to the extent where they
    could raise an argument to your motion.  

    MR. KEYES: Right.  That's where we've reached the agreement.  Our
    motion was basically in two parts, as a matter of law, even
    assuming you can prove the facts you allege, you're not entitled
    to relief.  And part two was, you can't prove the facts you
    allege, you don't have sufficient evidence with specificity
    required by the rule to prove those facts.  And because Mr. Dumont
    still has several depositions that he intends to complete, we've
    agreed to withdraw without prejudice that second part of the
    argument.  

  (Emphasis added.) 
   
       ¶  16.  Contrary to this stipulation, Physician Group urges this
  Court to affirm the grant of summary judgment on grounds that Dr. LoPresti
  lacks admissible evidence to support an essential element of his case - the
  very ground it withdrew before the trial court's decision.  We decline to
  consider arguments on appeal that were withdrawn in the trial court.  See
  Morais v. Yee, 162 Vt. 366, 372, 648 A.2d 405, 410 (1994) (argument not
  raised before the trial court will not be considered on appeal). We will
  abide by the stipulation reached by the parties and limit ourselves, as the
  trial court largely did, to the issues of law raised by Dr. LoPresti's
  amended complaint. (FN4)  Accordingly, we have assumed the truth of Dr.
  LoPresti's allegations as they pertain to his claims.  As we discuss below,
  we affirm the trial court's ruling on the doctor's promissory estoppel and
  breach-of-the-implied-covenant-of-good-faith claims as a matter of law, but
  we reverse and remand for further proceedings on his claim of wrongful
  discharge in violation of public policy.   

            I.  Wrongful Discharge in Violation of Public Policy
   
       ¶  17.  For purposes of our de novo summary judgment review,
  defendant has provisionally agreed that the Court may assume as true Dr.
  LoPresti's allegation that he was terminated because he refused to refer
  patients to certain physicians whom he believed provided substandard care
  to his patients and in some cases performed unnecessary invasive
  procedures.  Dr. LoPresti claims that his decision not to refer patients to
  these specialists was guided heavily by Vermont's prohibition on
  unprofessional conduct contained in 26 V.S.A. §§ 1354, 1398, and by
  numerous provisions of the AMA Principles.  Dr. LoPresti asserts that his
  employers wanted him to make the referrals for financial reasons,
  notwithstanding the prohibition of such practices contained in the
  aforementioned ethical codes.  He alleges that a discharge based on these
  grounds violates compelling public policy that restricts an employer's
  otherwise unfettered discretion to discharge employees.  See Payne v.
  Rozendaal, 147 Vt. 488, 491-92, 520 A.2d 586, 588 (1986) (recognizing
  public policy limits on employer discretion in discharging employees).  The
  trial court summarily rejected this argument because, in its view, this
  case was clearly governed by the termination clause in Dr. LoPresti's
  employment contract.  Without analysis, the trial court  also cited our
  decision in Dulude v. Fletcher Allen Health Care, Inc., 174 Vt. 74, 807
  A.2d 390 (2002), as additional, alternative support for its conclusion that
  no public policy prohibited Dr. LoPresti's firing, even if it were for the
  reasons that he alleged.
   
                                     A.

       ¶  18.  As an initial matter, we cannot accept the trial court's
  apparent holding that the existence of and adherence to a "with or without
  cause" termination provision of an express contract is sufficient to
  insulate an employer from a claim that it discharged an employee for
  reasons that violate public policy.  In the employment context, Vermont law
  has long recognized that, under an at-will employment contract, "an
  employee may be discharged at any time with or without cause, 'unless there
  is a clear and compelling public policy against the reason advanced for the
  discharge.' "  Payne, 147 Vt. at 491, 520 A.2d at 588 (quoting Jones v.
  Keogh, 137 Vt. 562, 564, 409 A.2d 581, 582 (1979)).  Clause 1.2(c)(ii) of
  the "Physician Employment Agreement" states that, notwithstanding any
  provision to the contrary, the "Agreement shall terminate . . . One Hundred
  Eighty (180) days after written notice of termination with or without cause
  from either party."  As Physician Group argues, this clause afforded Dr.
  LoPresti the security of six months in which to close out his practice and
  make arrangements to find new employment.  This distinguishes the doctor's
  contract from the typical at-will employment relationship that is
  terminable immediately.  See Sherman v. Rutland Hosp., Inc., 146 Vt. 204,
  207, 500 A.2d 230, 232 (1985) (at-will employment agreement can be
  terminated at any time with or without cause).  Nonetheless, the agreement
  still left the employer with the power to fire him "with or without cause." 
  Such employer discretion is the defining characteristic of the at-will
  relationship.  See Payne, 147 Vt. at 491, 520 A.2d at _.  Accordingly, the
  distinction that Physician Group draws between the contract provision at
  issue in this case and at-will agreements controlled by Payne is
  immaterial.  
   
       ¶  19.  In Payne, we expressly recognized that an employer's contract
  rights with regard to terminating an employee "are not absolute," and must
  yield to public policy considerations.  Id.  While we have not expressly
  extended this principle to written employment contracts that require a
  notice period before no-cause termination, we see no reason why it does not
  apply in such cases.  Vermont law has long held that courts have the power
  to void written contract provisions that violate public policy in either
  their terms or contemplated performance.  See Baldwin v. Coburn, 39 Vt.
  441, 444-46 (1867) (voiding written contract between liquor commissioner
  and agents he appointed as against public policy).  Such contract terms can
  be voided as against public policy only when "it could be said that they
  were injurious to the interests of the public or contravened some
  established interest of society." State v. Barnett, 110 Vt. 221, 232, 3
  A.2d 521, 526 (1939). 
   
       ¶  20.  Without analysis or citation to Payne, the trial court
  "refuse[d] to treat this discharge as a violation of public policy" because
  it "is clearly governed by the termination clause."  Defendant amplified
  this position by pointing out that the six-month provision evidences the
  doctor's substantial bargaining power in the contract and argues that the
  Court, "as conscience of the community, does not have to supply terms to
  protect the doctor."  This argument fails to grasp the nature of public
  policy restraints on contract, which are enforced to protect community
  norms for the benefit of the public at large, as well as the individual
  employee. Rocky Mtn. Hosp. & Med. Serv.  v. Mariani, 916 P.2d 519, 525
  (Colo. 1996) ("[P]ublic policy must concern behavior that truly impacts the
  public in order to justify interference into an employer's business
  decisions.").  In his amended complaint, Dr. LoPresti claims that he was
  fired for his refusal to potentially violate state law and his professional
  ethical code by referring patients to doctors whom he believed were
  "providing improper care, potentially jeopardizing the physical well-being
  of his patients."  Assuming that he can prove these allegations, the
  enforcement of public policy here would have a tangible connection to the
  protection of health care consumers. Therefore, Dr. LoPresti's claim is
  consistent with our view that compelling public policy is intended to
  prevent injuries to the public - especially in matters of public health. 
  See Payne, 147 Vt at 492, 520 A.2d at 588 (" '[Public policy] may be said
  to be the community common sense and common conscience, extended and
  applied throughout the state to matters of public morals, public health, 
  public safety, public welfare, and the like.' " (citation omitted)).

       ¶  21.  Our law specifically recognizes public policy limits on
  employer discretion in at-will situations.  And it recognizes that, in the
  appropriate case, all written contract provisions may be voided as against
  public policy if the terms as written or actually performed could be
  injurious to the public.  Accordingly, the trial court erred in concluding
  that the written contract provision in this case insulated the employer
  from Dr. LoPresti's claim that the termination decision violated public
  policy.

                                     B.
   
       ¶  22.  Having decided that the existence of the written employment
  contract in this case will not, as a matter of law, preclude a
  determination that Physician Group wrongfully terminated Dr. LoPresti in
  violation of public policy, we must now assess whether Dr. LoPresti has
  identified clear and compelling public policy to support his claim.  In
  Payne, we recognized that public policy in the employment context may be
  found in sources other than statutes and constitutions.  Id. at 493-94, 520
  A.2d at 589 (rejecting notion that public policy exception to at-will
  employment must be legislatively defined).  Other jurisdictions recognize
  that professional ethical codes can be an important source of public policy
  in employment matters involving employees who are subject to the mandates
  of such codes.  Mariani, 916 P.2d at 524-25 (relying on state professional
  accountancy ethical codes as source of public policy in wrongful discharge
  case); Pierce v. Ortho Pharm., 417 A.2d 505, 513-14 (N.J. 1980) (accepting
  professional codes of ethics as source of public policy, but rejecting
  wrongful discharge claim of doctor who failed to prove that conduct
  requested by employer would lead to an ethical violation).  In Pierce, the
  New Jersey Supreme Court observed that "[e]mployees who are professionals
  owe a special duty to abide not only by federal and state law, but also by
  the recognized codes of ethics of their professions.  That duty may oblige
  them to decline to perform acts required by their employers." 471 A.2d at
  512; see also Mariani, 916 P.2d at 525 ("[E]thical codes are central to a
  professional employee's activities, there may be a conflict at times
  between the demands of an employer and the employee's professional
  ethics.").  

       ¶  23.  We agree, as a general matter, with those courts that accept
  professional ethical codes as potential sources of public policy. 
  Nonetheless, employees who invoke such codes, as Dr. LoPresti has, still
  bear the burden of demonstrating that such codes are "clear and compelling"
  in their mandates to employees who claim that their professional ethical
  obligations supersede those owed to their employers.   Payne, 147 Vt. at
  495, 520 A.2d at 590.  Specifically, employees must show that the ethical
  provisions relied on are "sufficiently concrete to notify employers and
  employees of the behavior [they] require," and the code provision being
  applied must be primarily for the benefit of the public as opposed to the
  interests of the profession alone.  Mariani, 916 P.2d at 525; accord
  Pierce, 417 A.2d at 512.  The employee must show that he had an objective,
  good faith belief that the conduct requested by the employer would violate
  an ethical rule that satisfies the preceding definition.  To succeed, an
  employee cannot rely on his or her personal moral beliefs, or on an overly
  cautious reading of the mandates in a particular code.  Pierce, 417 A.2d at
  512 ("[A]n employee should not have the right to prevent his or her
  employer from pursuing its business because the employee perceives that a
  particular business decision violates the employee's personal morals, as
  distinguished from the recognized code of ethics of the employee's
  profession.").
   
       ¶  24.  Moreover, in a case like this one, a professional employee
  must show that the specific provisions contained in the ethical code relied
  upon apply in the particular professional context in which the employee is
  working.  Here, for example, Dr. LoPresti relies on Principle E-8.132 among
  others.  By its terms, Principle E-8.132 governs a central issue in this
  case: referral practices of physicians.  Much of its operative language,
  however, specifically addresses the financial pressures that a physician
  faces when dealing with patients who belong to Preferred Provider
  Organizations (PPO) and Health Maintenance Organizations (HMO).  As the
  Court understands it, Physician Group is neither a PPO, nor an HMO. 
  Principle E-8.132 specifically references "referral to outside specialty
  services," as opposed to those available within the PPO or HMO.  Because
  the court summarily rejected Dr. LoPresti's public policy claim without
  examining or applying this and other ethical provisions in question, the
  record and briefing contain very little detail about the organizational
  structure of Physician Group and its expectation of employees as they
  pertain to referrals.  Without knowing how Physician Group handled
  referrals, it is difficult for this Court to apply an ethical provision,
  most of which is addressed to physicians working within the constraints of
  an HMO or PPO.     

       ¶  25.  On remand, Dr. LoPresti must carry the foregoing burdens
  with respect to the AMA Principles he relies on, and then must show that he
  can satisfy the elements of wrongful discharge in violation of public
  policy as they are set out below.
   
       ¶  26.  In Mariani, the Colorado Supreme Court held that an
  employee's wrongful discharge claim could be based on public policy found
  in professional ethical codes.  916 P.2d at 525.  The court set out four
  elements of the prima facie case for such claims.  Id. at 527.  The
  employee must show that (1) the employer directed the employee to perform
  an illegal or unethical act as part of the employee's duties; (2) the
  action directed by the employer would violate a statute or clearly
  expressed public policy; (3) he or she was terminated as a result of
  refusing to perform the requested act in violation of public policy; and
  (4) "the employer was aware or should have been aware that the employee's
  refusal was based upon the employee's reasonable belief that the act was
  illegal" or in violation of the employee's professional ethical code.  Id.

                                     C.

       ¶  27.  Despite the trial court's citation to it, our holding in
  Dulude v. Fletcher Allen Health Care is addressed to a situation that is
  materially different from the present case, and thus is not an obstacle to
  Dr. LoPresti's claim.  In Dulude, we held that, as a matter of law, a
  nurse's professional disagreements with the employer hospital's narcotics
  practices were insufficient to support a public policy claim. Dulude, 174
  Vt. at 82, 807 A.2d at 397.  Prior to her ultimate termination, nurse
  Dulude's discretion in dispensing narcotics to patients had been curtailed
  significantly in response to patient complaints and an internal audit
  indicating that her medication practices were aberrant.  Id. at 76-77, 807
  A.2d at 393.  The nurse was under strict supervision, and was required to
  obtain approval from a support person prior to administering any controlled
  substance.  Id.  Multiple letters of understanding between the nurse and
  the hospital clearly indicated that any deviation from the hospital's pain
  medication policies would result in her termination.  Id. at 77-78, 807
  A.2d at 393-94.  Despite these warnings, the nurse deviated from the
  hospital pain medication policy several times and on occasion failed to
  obtain necessary approval from a support person.  Id.  Under these
  circumstances, we refused to accept the plaintiff's claim that public
  policy prevented the hospital from lawfully firing her, even though she had
  repeatedly violated hospital policy set by her supervisors.

       ¶  28.  In reaching our conclusion that public policy would not
  prevent the employer's termination decision, we emphasized that "[a]s a
  licensed hospital in Vermont, FAHC has the ultimate responsibility to
  provide for, and protect, its patients, and to set its own standards for
  safeguarding the life and health of the people of this state."  Id. at 82,
  807 A.2d at 397.  We also cited to Aiken v. Employer Health Serv., Inc.,
  No. 95-3196, 1996 WL 134933, at *6 (10th Cir. March 23,1996), for the
  proposition that there is no "public policy which prohibits an employer
  from terminating a health care employee over a disagreement or difference
  of professional judgment where the judgment of each is within the bounds of
  reasonable care."  Id. (internal quotations omitted).  This is not the case
  here.

       ¶  29.  The substantial difference in professional status between the
  nurse in Dulude and Dr. LoPresti distinguishes the two cases.  The nurse in
  Dulude worked as a hospital employee under the direct supervision of other
  licensed medical professionals - a status that afforded her less discretion
  over patient care decisions than that required of Dr. LoPresti, a primary
  care physician.  Her job was to execute policies established by
  supervisors.  Dulude, 174 Vt. at 77, 807 A.2d at 393.  Time and again, she
  proved herself incapable of abiding by specific
  pain-medication-administration plans and directives from her supervisors. 
  By contrast, as a primary care physician, Dr. LoPresti was solely
  responsible for deciding which of the various area specialists would best
  treat his patients.  Nothing in the record before us indicates that he was
  expected or required to receive approval from supervisors before making
  referrals. 
   
       ¶  30.  Moreover, Dr. LoPresti has alleged more than a " 'difference
  of professional judgment where the judgment of each [party] is within the
  bounds of reasonable care.' " Id. at 82, 807 A.2d at 397 (quoting Aiken,
  1996 WL 134933, at *6).  Dr. LoPresti claims that specific provisions of
  the AMA Principles set strict guidelines governing physician referral
  practices.  Dr. LoPresti believes that he will be able to prove, with
  additional discovery, that his refusal to violate the codified ethical
  standards of his profession solely for the financial benefit of his
  employers led to his discharge.  The nurse in Dulude made no claim that her
  aberrant medication practices were mandated by any professional ethical
  code.  Id.  Instead, she was following nothing more than her own personal
  philosophy of pain-medication administration, and the appellate record
  revealed that her practices were the source of numerous patient complaints. 
  Id. at 76-78, 807 A.2d at 392-94.

       ¶  31.  Because Dr. LoPresti's claim, as alleged, is materially
  distinguishable from the claim brought in Dulude, the trial court erred by
  citing it as additional support for its conclusion that Dr. LoPresti's
  public policy count could not succeed as a matter of law.  

       ¶  32.  Due to the undeveloped state of the record as it pertains to
  this claim, we express no opinion as to Dr. LoPresti's ability to satisfy
  the elements articulated above.  At this stage, we acknowledge only that,
  contrary to the trial court's legal conclusions, Dr. LoPresti's amended
  complaint has stated a claim upon which relief can be granted, assuming
  that he can support it with admissible evidence.   
   
       ¶  33.  Dr. LoPresti has also alleged that the conduct that Physician
  Group required of him would have violated Vermont law regulating the
  practice of medicine.  Specifically, Dr. LoPresti relies on 26 V.S.A. §§
  1354(a)(7), 1398.  Section 1354(a)(7) states that unprofessional conduct
  includes "conduct which evidences unfitness to practice medicine."  Section
  1398 allows the Board of Medical Practice to suspend or revoke licenses of
  doctors who engage in unprofessional conduct.  Dr. LoPresti argues that a
  violation of a professional ethical codes, like the AMA Principles, can
  amount to "unfitness to practice medicine."  See, e.g., Shea v. Bd. of Med.
  Exam'rs, 146 Cal. Rptr 653, 662 (Ct. App. 1978) (unfitness to practice
  medicine is evidenced by "conduct that breaches the rules or ethical code
  of [doctor's] profession").  Dr. LoPresti cites no case in which the
  Vermont Board of Medical Practice has actually interpreted the statutory
  language as he does.  The board is entrusted with enforcing the statute in
  the first instance, and it does so in the context of cases where the
  specific facts amounting to allegedly unprofessional conduct are before it. 
  We are, therefore, hesitant to usurp the board's role by issuing an
  advisory opinion on the type of conduct that would not be "unprofessional"
  as that term is used in the statute.  While we are allowing further
  proceedings in which Dr. LoPresti will have the chance to prove that the
  AMA Principles, standing alone, are clear and compelling public policy that
  controlled the employer's termination decision, we decline Dr. LoPresti's
  invitation to incorporate the AMA Principles into 26 V.S.A. § 1354(a)(7). 

       ¶  34.  Finally, we reject the aspect of Dr. LoPresti's public policy
  claim that relies on certain provisions of Physician Group's own "Code of
  Ethics."  Our review of the policy provisions that Dr. LoPresti relies on
  leads us to the conclusion that they are "broad hortatory statement[s] of
  policy that give[] little direction as to the bounds of proper behavior,"
  and thus do not comply with the public policy standards we set out above.
  (FN5)  Mariani, 916 P.2d at 525.  

            II.  Implied Covenant of Good Faith and Fair Dealing

       ¶  35.  Dr. LoPresti also claims that, notwithstanding the express
  "with or without cause" termination clause of his written contract, the
  implied covenant of good faith and fair dealing (the covenant) imposes
  limits on both the reasons and process for terminating an employee in his
  position.  In Vermont, the covenant of good faith and fair dealing is
  implied in every contract.  Carmichael v. Adirondack Bottled Gas Corp., 161
  Vt. 200, 208, 635 A.2d 1211, 1216 (1993); see also Restatement (Second) of
  Contracts § 205 (1981) (stating that the covenant is implied in every
  contract).  Dr. LoPresti's theory has both a substantive and a procedural
  component which we will deal with separately. 
   
            A.  Substantive Protection of the Implied Covenant of
                         Good Faith and Fair Dealing

       ¶  36.  " '[G]ood faith' is a concept that 'varies . . . with the
  context' in which it is deemed an implied obligation."  Carmichael, 161 Vt.
  at 208, 635 A.2d at 1216 (quoting Restatement  (Second) of Contracts § 205
  cmt. a (1981)) (omission in original).  The covenant's purpose is to ensure
  "faithfulness to an agreed common purpose and consistency with the
  justified expectations of the other party."  Restatement (Second) of
  Contracts § 205 cmt. a (1981). Here, we are asked to imply the covenant in
  the context of an express physician's employment agreement allowing for
  termination on notice from either party "with or without cause."

       ¶  37.  As Dr. LoPresti views it, the agreed common purpose of the
  physician's employment contract was providing the highest possible quality
  of patient care.  He argues that "[a] jury would be entitled to find that
  firing a doctor because he had upheld the ethical standards of his
  profession by taking reasonable steps to protect his patients from harm
  violates the covenant," as it applies to the agreed common purpose he
  posits.  In this respect, his claim based on a violation of the covenant is
  practically indistinguishable from his public policy claim discussed above. 
  This point is illustrated by the following statements Dr. LoPresti's
  counsel made at the oral argument on summary judgment in the trial court:

    The covenant of good faith and fair dealings is a very strong part
    of Vermont law that stands on equal footing with FEPA [the Vermont
    Fair Employment Practices Act].  There's some protections for the
    public that really [] the contracts can['t] outweigh.  Our
    argument about the compelling public interest, the compelling
    public policy is pretty much the same.  I wouldn't make the
    argument if what Dr. LoPresti did was just to protect his own
    rights or his own interests.

  (Emphasis added.)  
 
       ¶  38.  In the employment termination context, some courts have also
  recognized the difficulty of distinguishing between violations of the
  covenant and wrongful termination in violation of public policy.  For
  example, in the seminal case of Monge v. Beebe Rubber Co., the New
  Hampshire Supreme Court applied the covenant and held that an employer had
  violated it by terminating an at-will employee who refused to date her
  foreman.   316 A.2d 549, 551-52 (N.H. 1974).  The court stated that
  "termination by the employer of a contract of employment at will which is
  motivated by bad faith or malice . . . constitutes a breach of the
  employment contract."  Id. at551.  In a subsequent case, however, the court
  clarified that Monge applied "only to a situation where an employee is
  discharged because he performed an act that public policy would encourage,
  or refused to do that which public policy would condemn."  Howard v. Dorr
  Woolen Co., 414 A.2d 1273, 1274 (N.H. 1980).  In concurring with the Idaho
  Supreme Court's decision to recognize the applicability of the covenant in
  the at-will employment context, Associate Justice Huntley discussed the
  interplay of the covenant and public policy as he saw it:

    When the contract is "at will," the employer need not show good
    cause for the termination.  However, the "at will" employer may
    not terminate an employee for bad causes or reasons, i.e., those
    contrary to public policy, because such terminations are made in
    bad faith, and as such, are in contravention of [the covenant].

  Metcalf v. Intermountain Gas Co., 778 P.2d 744, 752 (Idaho 1989) (Huntley,
  J., concurring) (emphasis added)).  We see no reason, in the context of
  this case, to blur the distinction between harms for which the covenant
  provides a remedy and harms for which public policy provides a remedy.  We
  will not,  therefore, allow Dr. LoPresti's claim for breach of the
  covenant, as he has fashioned it, to go forward.
   
       ¶  39.  More importantly, we have already held that the covenant does
  not apply to at-will employment agreements when the plaintiff's argument
  amounts to no more than an objection to the other party's freedom to avail
  itself of the at-will arrangement by terminating the agreement for reasons
  that the other party does not accept.  Dicks v. Jensen, 172 Vt. 43, 52, 768
  A.2d 1279, 128-86 (2001).  While the agreement at issue here is not truly
  at-will in the sense that there is a written contract that requires a
  notice period before no-cause termination, we have treated them as
  equivalents for the reasons stated supra ¶ 18.  Accordingly, the
  rationale behind our rejection of the employer's claim in Dicks applies
  here. 


       ¶  40.  Though writing in the context of classic at-will employment
  arrangements, the Supreme Court of Connecticut summarized what is our
  essential position in this case:

    Although we endorse the applicability of the good faith and fair
    dealing principle to employment contracts, its essence is the
    fulfillment of the reasonable expectations of the parties. Where
    employment is clearly terminable at will, a party cannot
    ordinarily be deemed to lack good faith in exercising this
    contractual right. Like other contract provisions, which are
    unenforceable when violative of public policy, the right to
    discharge at will is subject to the same restriction. We see no
    reason presently, therefore, to enlarge the circumstances under
    which an at?will employee may successfully challenge his dismissal
    beyond the situation where the reason for his discharge involves
    "impropriety . . . derived from some important violation of public
    policy."

  Magnan v. Anaconda Indus., Inc., 479 A.2d 781, 788-89 (Conn. 1984)
  (internal citation omitted).
   
       ¶  41.  Above and beyond the allegations that Physician Group fired
  him in violation of public policy, Dr. LoPresti also claims that he was
  fired because he demanded a higher standard for patient care than Physician
  Group was interested in providing.  His specific allegations were related
  not only to the referral issue, but also to clashes he had with management
  over the number of patients a Physician Group doctor would be required to
  see in a day.  He claims that termination for this reason was inconsistent
  with his justified expectations under the contract that incorporated the
  notion, contained in Physician Group's own code of ethics, that "care of
  the sick" was the physician's "first responsibility" and "sacred trust." 
  See Carmichael, 161 Vt. at 208, 635 A.2d at 1216 (covenant emphasizes "
  'consistency with the justified expectations of the other party' " (quoting
  Restatement (Second) of Contracts § 205 cmt. a (1981)).  Assuming that Dr.
  LoPresti can prove this allegation, as a matter of law, the covenant still
  will not provide a remedy where the express contract makes both parties
  aware that either party can terminate the agreement, upon proper notice,
  for any reason.  Putting aside the public policy aspect, Dr. LoPresti's
  claim under the covenant is based on his not unwarranted dissatisfaction
  with the reasons he believes were behind his firing.  We cannot recognize
  this as an acceptable grounds on which to challenge employer personnel
  decisions that are based on freely negotiated "with or without cause"
  termination clauses, because to do so would essentially render such clauses
  meaningless.        
   
       ¶  42.  We note, however, that our holding in this case will not
  necessarily preclude the covenant's application in the employment
  termination context when a plaintiff's claim for damages is based on
  "accrued benefits" and not solely on implied tenure, i.e., permanent
  employment until just cause for termination arises.  See Ross v. Times
  Mirror, Inc., 164 Vt. 13, 23, 665 A.2d 580, __ (1995) (reserving judgment
  on whether Court would recognize the covenant in the context of nontenure
  terms of at-will contract).   Even when the employment arrangement gives
  the employer absolute discretion to terminate the contract without cause,
  courts have held employers liable for breaching the covenant where the
  termination was based on the employer's desire to avoid paying the employee
  benefits earned under the contract.  See, e.g., Fortune v. Nat'l Cash
  Register Co., 364 N.E.2d 1251, 1255-57 (Mass. 1977) (notwithstanding
  written contract allowing either party to terminate the contract on written
  notice, employer violated implied covenant of good faith and fair dealing
  by terminating employee in order to avoid paying him commissions and
  bonuses to which he would have been entitled but for the termination); see
  also Magnan, 479 A.2d at 787-88 (expressing a willingness to accept
  employee claims based on implied covenants of good faith and fair dealing
  when the employer's termination decision has the effect of "depriving the
  employee of compensation that is clearly identifiable and is related to the
  employee's past service. " (internal quotation marks omitted)).  Such cases
  are based on the principle that "any action by either  party which
  violates, nullifies or significantly impairs any benefit of the employment
  contract is a violation of the implied-in-law covenant of good faith and
  fair dealing." Metcalf, 778 P.2d at 750; see also Restatement (Second) of
  Contracts § 205 cmt. a (1981) (covenant emphasizes "consistency with the
  justified expectations of the other party").  

       ¶  43.  Dr. LoPresti's claim does not require us to apply the covenant
  to restore accrued benefits that were lost as a result of his being fired. 
  He cannot claim that Physician Group deprived him of any benefit of the
  employment contract by terminating him when it did.  The contract required
  only that Dr. LoPresti be given written notice of termination six months in
  advance, and the opportunity to work for the contracted salary during the
  period following the notice until the date of termination.  He does not
  dispute that he was given this notice, nor does he dispute that he was paid
  for all the services he rendered.  Moreover, in light of the freely
  negotiated "with or without cause" termination clause, lifetime employment
  was clearly not a benefit of the contract.   

            B.  Procedural Protection of the Implied Covenant of
                         Good Faith and Fair Dealing

       ¶  44.  Dr. LoPresti's claim that Physician Group breached the
  covenant by employing a bad faith process in firing him is similarly
  unavailing. To the extent that Physician Group provided him with a reason
  for his termination, (FN6) ostensibly that the office where he worked was
  being closed, he argues that this was a pretext for the real reason he was
  terminated - failure to refer patients to certain specialists.  He argues
  that this alleged subterfuge "deprived him of the opportunity to protect
  his rights," because he would have made a greater effort to explain his
  referral practices in hopes of reversing Physician Group's decision to
  terminate him.  The flaw in this argument lies in Dr. LoPresti's suggestion
  that he had the "right" to permanent employment absent just cause for
  termination.  The contract makes clear that he had no such right.        

       ¶  45.  In Carmichael, we accepted the Restatement's view that "
  '[s]ubterfuges and evasions violate the obligation of good faith in
  performance even though the actor believes his conduct to be justified.' "
  161 Vt. at 209, 635 A.2d at 1217 (quoting Restatement (Second) of Contracts
  § 205 cmt. d (1981)).  Again, we stress that the covenant's application
  varies with the context.  Dicks v. Jensen, 172 Vt. at 52, 768 A.2d at
  1285-86; Carmichael, 161 Vt. at 202, 635 A.2d at 1213.  As a general
  matter, we discourage any subterfuge and evasion in employer/employee
  relations.  Nonetheless, when, as here, the employer has no duty to provide
  the employee with any reason why he or she is being fired, subterfuge and
  evasions, though they may be reprehensible, are not actionable.  Dr.
  LoPresti could have negotiated for terms that would have required Physician
  Group to provide him not only with notice prior to termination under
  section 1.2(c)(ii), but also with the reason for the termination decision. 
  In fact, under Dr. LoPresti's physician's agreement section 1.2(c)(i),
  either party could terminate the agreement ninety days after providing the
  other party notice of a material breach.  In that case, the alternative
  termination clause contemplates that, after receiving notice of a material
  breach, the other party will work to cure it.  If the breaching party can
  cure the breach within thirty days, then the contract will not terminate. 
  The bargain Dr. LoPresti struck with Physician Group left both parties with
  the choice of at least two means to terminate the contract.  Physician
  Group cannot be penalized for exercising its choice as it did, even when
  doing so deprived Dr. LoPresti of the opportunity to change the minds of
  Physician Group's decisionmakers. 
   
       ¶  46.  While public policy could supersede the written termination
  provision in this employment contract, the implied covenant of good faith
  and fair dealing, as Dr. LoPresti has invoked it, will not.  As we noted
  above, public policy restrictions on an employer's personnel decisions
  protect the public from conduct that transgresses widely held community
  values.  Though the effect of its enforcement may be to protect a specific
  employee, its purpose is to deter conduct that is also directly or
  indirectly injurious to the public.  To the extent that Dr. LoPresti
  invokes the implied covenant of good faith and fair dealing to perform a
  like function in this case, we decline to write this redundancy into the
  law.  If Dr. LoPresti falls short of carrying his burden on the public
  policy theory, we will not accept his invitation to apply the covenant as a
  remedy for what he sees as the unduly harsh operation of a freely bargained
  contractual term; in this case, the arms-length bargaining process between
  professionals delivered sufficient protection. 

                          III.  Promissory Estoppel

       ¶  47.  In reviewing Dr. LoPresti's promissory estoppel claim, the
  trial court correctly noted and applied the well-established rule that
  promissory estoppel will not apply when the relationship of the parties is
  governed by a contract.  E.g., Big G Corp. v. Henry, 148 Vt. 589, 594, 536
  A.2d 559,562 (1987).  In this case, the parties entered into a written
  agreement and ostensibly performed according to its terms until it was
  terminated after approximately four years.  
   
       ¶  48.  Dr. LoPresti attempts to avoid the bar to his promissory
  estoppel claim by arguing that the contract was unconscionable and
  illusory, or alternatively, that the contract was not formed because, due
  to a unilateral mistake, the parties did not reach the necessary "meeting
  of the minds."  These sparsely briefed arguments are based on Dr.
  LoPresti's view that Physician Group and the trial court interpreted the
  contract in a way that left Physician Group "free to deliberately submit
  patients to substandard care, and free to substitute profit for patient
  care as the 'sacred trust.' "  Dr. LoPresti argues that a "conscientious
  and careful physician" like himself would not have entered into such an
  agreement.
             
       ¶  49.  Our resolution of the legal issues involved in Dr. LoPresti's
  public policy claim makes clear that the contract does not permit Physician
  Group to require Dr. LoPresti to subjugate patient care to financial
  considerations when doing so would result in a violation of law or the AMA
  Principles.  On the other hand, when viewed objectively, a reasonable
  person would have understood that the "with or without cause" termination
  provision in the contract allowed Physician Group to discharge Dr. LoPresti
  for failure to comply with employer practices even if those practices
  compromised his personal standards of patient care, but were otherwise
  ethical and lawful.  Moreover, the termination clause also allowed Dr.
  LoPresti the freedom to leave Physician Group, after appropriate notice, if
  he did not agree with its practices. We decline, therefore, to hold that
  there was a defect in formation of the contract between the parties.  

       ¶  50.  We affirm the trial court's conclusion that promissory
  estoppel is inapplicable to this case because the dispute arises out of a
  valid contract between the parties.  See Housing Vt. v. Goldsmith & Morris,
  165 Vt. 428, 431, 685 A.2d 1086, 1089 (1996) (promissory estoppel does not
  apply when contract governs the relationship of the parties).    The
  superior court's grant of summary judgment for Physician Group on Dr.
  LoPresti's breach of contract and promissory estoppel claims is affirmed. 

       The superior court's judgment as to Dr. LoPresti's claim of wrongful
  termination in violation of public policy is reversed and the case is
  remanded for additional proceedings consistent with the views expressed
  herein.



                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice


------------------------------------------------------------------------------
                                  Footnotes


FN1.  Chief Justice Amestoy sat for oral argument but did not participate in
  this decision.

FN2.  For purposes of this case, Dr. LoPresti has assigned all the
  specialists in question with aliases which we have incorporated into our
  discussion.

FN3.  We note that the status of plaintiff's motion to amend his complaint
  appears unresolved.  At the November 14, 2002 hearing on defendant's motion
  for summary judgment and plaintiff's motion to amend his complaint, neither
  the parties nor the court engaged in any significant discussion of the
  motion to amend, even though the proposed amendments contain many of the
  case's central allegations.  In the hearing's closing exchange, the judge
  stated: "Well, I'll take the motion for summary judgment under advisement. 
  I'll grant the motion to amend for pro forma, if it becomes vital.  If the
  summary judgment was granted, that would be the end of that.  And I'll
  grant it pursuant to V.R.C.P. 15 pro forma."  Thus, it appears that the
  court tentatively granted the motion to amend, subject to its decision on
  summary judgment.  On appeal, both parties have referred to allegations and
  claims asserted in the amended complaint, notwithstanding the absence of a
  formal order from the trial court allowing the amendments.  We assume that
  the trial court will formally resolve this matter on remand.

FN4.  Dr. LoPresti filed a Verified Motion to Alter or Amend the court's
  judgment based on his view that the trial court had ignored the parties'
  stipulation in ruling on summary judgment.  In his motion, Dr. LoPresti
  reiterated the discovery problems that had plagued the case, and which the
  court knew were the reason for the stipulation.  The motion also stated
  with specificity the discovery that remained to be completed.  Dr. LoPresti
  pointed out that summary judgment should not be granted where the nonmoving
  party has not had adequate opportunity for discovery. See V.R.C.P. 56(f)
  (court may refuse to grant summary judgment where nonmoving party can show
  reasons why essential affidavit facts are not available); see also Doe v.
  Doe, 172 Vt. 533, 534-35, 768 A.2d 1291, 1292-93 (2001) (mem.) (summary
  judgment was premature when no discovery had occurred).  In its Opinion and
  Order denying Dr. LoPresti's Motion to Vacate or Amend, the court made
  clear that because "Defendant moved for summary judgment as a matter of law
  . . . the reasons for plaintiff's termination are irrelevant as a matter of
  law."

FN5.  For example, Dr. LoPresti argues that the referrals Physician Group
  wanted him to make would have violated Physician Group Policy 1: employees
  "[s]hould recognize that the care of the sick is their first responsibility
  and a sacred trust, RRPG employees must at all times strive to provide the
  best possible care and treatment to all in need.

FN6.  The written notice informing Dr. LoPresti that he was being terminated
  in accordance with Section 1.2(c)(ii) did not state any reason for the
  firing.