CONTRACTS
Barnes v. Bradley County Memorial Hospital, No. 04-6317 (6th Cir. Jan. 4, 2006)
The Sixth Circuit Court of Appeals affirmed the lower court's grant of summary
judgment to the hospital, holding that a hospital had not breached its contract
with its chief executive officer and had not constructively discharged him
when it refused to provide the CEO with severance benefits after the CEO had
tendered his resignation to the hospital. The CEO tendered his resignation
under the belief that he was about to be terminated. He further believed that
the majority of the Board believed his resignation to be in the best interests
of the organization. The hospital refused to pay the CEO his severance as provided
by his employment contract if terminated "without cause." The Sixth Circuit Court of
Appeals held that the clause did not apply because the CEO was never actually
terminated or provided notice of termination. Furthermore, the court held that
the CEO was not constructively terminated, as there was no evidence that the
hospital forced the CEO to resign or did not deprive him of the ability to do
his job.