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COVID-19
PANDEMIC Sanctity of Contracts
continued from page 19

stated in the contract
or discussed by the
parties during nego-
tiation.
Second, the event
must make perform-
ance impracticable
— not simply im-
practical, a lower
threshold. A mere
change in difficulty
or expense will not
do; the event must
be far outside the
normal range. Con-
tracts are sanctified
because parties can
allocate their risk
prior to entering the
agreement. Courts
will likely assume the
parties intentionally
chose who would
bear certain risks.
The event must be
extreme and pose
unreasonable difficulty, expense, injury, or loss if the party was likely the obligation to pay salary payments resumes even though
forced to perform. the patient volume cannot bear the expense.
As an additional requirement of impracticability, reasonable ef- Permanently losing good employees or falling into legal disputes
forts must have been made to overcome the event’s obstacles to are among the last things we want to face while addressing the pres-
perform the contract. Like force majeure being a measure of miti- sures of a global pandemic. Though it may be difficult to avoid dis-
gation, impracticability must be present in spite of reasonable ef- ruptions in a practice’s revenues, when an employment contract
forts to perform. A pandemic may prohibit patients from coming does not contemplate force majeure, the next best step may be ne-
to the clinic, which may affect the practice’s ability to provide pa- gotiation. While not universally applicable, what is working among
tients for the employed physician to see. Telehealth, staggering pa- practices to maintain the business and avoid acrimony is the em-
tient appointments, health screenings upon arrival, and limiting ployer and employee agreeing to interim changes to the employment
clinic occupancy are all measures that help the parties perform de- agreement. The physician-employee’s workload in many practices
spite the event and might defeat the excuse of impracticability or will obviously be reduced during quarantine. Similarly, the practice’s
shorten its reprieve. reduced revenues will make paying the physician’s salary much more
Returning to the employment relationship, impracticability challenging, if not impossible. Coming to the table with this under-
might apply. A physician may be employed as a staff physician standing may allow the employee and employer to agree on a tem-
under a contract with a fixed term, a monthly salary and an obli- porary amendment to the contract where the employee will accept
gation to give 90 days’ notice before terminating the employment a reasonable reduction in pay until the crisis has passed.
relationship without cause. If COVID-19 caused the closing of Keeping in mind that everyone is enduring the COVID-19 crisis
the practice, does the employer have to keep paying the employed together may help practices avoid losing valued employees and cre-
physician or can performance be suspended? Texas is an “at will” ate legal disputes. But contemplation of these events in future con-
state that allows an employer to fire an employee without cause tracts with thorough force majeure provisions will help insulate
and without notice. But the employment contract requires notice from further loss without having to rely on the “maybes” and the
to end the employment relationship. If the contract has a force “it depends on the situation” legal principles.
majeure clause, it may excuse the payment but not excuse the ob-
ligation to give notice. If the contract is silent on government ac- Michael Kreager and Trenton Brown are attorneys at the Kreager Mitchell
tion or epidemics, the government closure could create a pay Law Firm in San Antonio, and are members of the BCMS Circle off Friends
holiday while the clinic is closed. When the clinic reopens, it is Program.

20 San Antonio Medicine • June 2020