Nashville-based ASC management company AmSurg lost the first round of a legal dispute with a former division president over alleged breach of contract last month when a district court judge in Tennessee dismissed the case on jurisdiction grounds.
AmSurg sued former employee Frank Principati, who worked for the company out of Pennsylvania from July 2005 to April 2010, in U.S. District Court in Nashville over allegations that he breached his employment agreements after he left the company and helped another former AmSurg employee get a job with his new employer, according to court documents.
As a division president for AmSurg, Mr. Principati worked out of the state of Pennsylvania, where he has been a resident for more than 20 years, and traveled to Tennessee approximately once a month for business on behalf of AmSurg, according to court documents. In January 2010, he was approached by headhunting firm Kraft Search Associates about an open position as chief operational officer for Physicians Endoscopy, a Pennsylvania-based ASC management company.
In discussions with the company on April 8, Mr. Principati suggested that Physicians Endoscopy (PE) contact Sharon Morrison, an AmSurg employee whom he supervised, about an open clinical position with PE.
Court documents state that, in May, Mr. Principati also contacted Kraft about Ms. Morrison, including providing her e-mail address, and listed her as a reference in his bid for the COO job. This was 1 month after he signed a "Separation Agreement and General Release" with AmSurg stating that he would "refrain from contacting or speaking with any current employee, partner or physician associated with any ambulatory surgery center, physician practice or vendor affiliated in any way with [AmSurg]."
In early June 2010, both Mr. Principati and Ms. Morrison contacted Kraft to say they'd accepted jobs with Physicians Endoscopy. AmSurg later sued Mr. Principati for allegedly breaching his employment agreements.
Mr. Principati filed a motion to dismiss the case on the grounds that the Nashville court lacks personal jurisdiction over the defendant because he lives and works in Pennsylvania, where the alleged breach occurred and where several potential witnesses reside. AmSurg countered that Mr. Principati routinely traveled to Nashville, was notified of his termination there and signed a separation agreement that designated Tennessee as the "governing law."
Weighing the 2 sides' arguments, the court agreed that the case should be dismissed over lack of personal jurisdiction, "but without prejudice to the merits of plaintiff's claims," according to District Judge William Haynes.
An attorney for AmSurg declined to comment and the company did not immediately return a phone call seeking comment on whether they intended to move the case to Pennsylvania.
Irene Tsikitas
