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Mayo Clinic defeats a former employee’s lawsuit because of wording in non-disparagement provision

A carefully-worded “non-disparagement” clause can limit a former employer’s potential exposure.  See Gallo v. Mayo Clinic Health Sys.-Franciscan Med. Ctr., Inc., No. 17-1623, slip op. (7th Cir. Nov. 1, 2018) (af­firm­ing summary judgment in favor of former employer).  According to the Seventh Circuit:

  • Dr. Gallo, a dermatologist, resigned from the Mayo Clinic after less than a year due to “performance issues and conflicts with her supervisor[.]” Id., slip op. at 2. The parties signed a separation agree­ment, which included a pro­vi­sion (quoted below) specifying what Mayo could say in re­sponse to future employers’ reference requests.
  • Several years later, as part of seeking a job at a suburban health center in New York, Dr. Gallo applied for privileges at the Mount Sinai hospital, which sent a routine credentialing form to Mayo.
  • Dr. Gallo’s former supervisor filled out the Mount Sinai credentialing form and rated Dr. Gallo as “fair” in two areas: “accepting feedback and ability to work with others.”  Id. at 3-4. (The former supervisor later followed up with an email stating that he rec­om­mended Dr. Gallo and thought she was a good physician but that he was not willing to artificially inflate his rating of her. Id. at 4.)
  • Some months later, Dr. Gallo received her license to practice medicine in New York; her prospective employer sent her a new form of employment contract. Id. at 4.
  • Ultimately, though, the prospective employer rescinded its job offer to Dr. Gallo “because of her over-demanding neg­o­t­i­a­tions and the av­ail­a­bil­ity of another individual to take the position.”  Id. at 12.
  • Dr. Gallo sued the Mayo Clinic for allegedly breaching the separation agree­­­ment pro­vi­sion concerning the reference letter. The district court granted summary judgment in favor of Mayo; the Sev­enth Circuit affirmed the lower court’s decision — after discussing in some detail just why Dr. Gallo didn’t get the job.

This is interesting from at least two perspectives:

First: Dr. Gallo lost her case in part because Mayo didn’t actually breach the rele­vant pro­vi­sion in her separation agreement, which the Seventh Circuit quoted:

The parties have agreed upon a letter of reference for Employee to be pro­vi­ded to potential employers seeking a reference. The letter of reference is at­tached hereto as Exhibit A and incorporated herein… . Employer will state nothing that will be inconsistent with the letter of reference (Exhibit A) at­tached hereto. No reference will be made to any performance issue and nothing derogatory will be stated.

Id., slip op. at 2.

Second:  If you sue for breach of a non-disparagement clause, you might lose in court — and you might not like the resulting public record.  Here, in a var­i­a­tion of the “Streisand effect,” Dr. Gallo will now have the Seventh Circuit’s dis­cussion of her job history as part of her permanent personal record on the Internet.

(Cf. the right to be forgotten, which has taken hold in some areas of Europe but not so much in the U.S.)


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