A California healthcare system is under fire for allegedly violating employment laws, as detailed in a recent court filing. The complaint was filed by Constanze Rayhrer against Community Memorial Health System (CMHS) in the Ventura County Superior Court on June 24, 2024.
The case revolves around allegations that CMHS misclassified Rayhrer as an independent contractor and violated the Fair Employment and Housing Act (FEHA) and the Labor Code. According to the complaint, Rayhrer signed a Physicians Services Agreement with CMHS in 2008 to provide on-call coverage services as a physician in their emergency department. This agreement included an arbitration clause for disputes concerning its terms. Over the years, this agreement was amended multiple times, maintaining the arbitration provision. From 2012 onwards, Rayhrer also signed annual letter agreements to serve as a Teaching Physician and later as an Associate Program Director in CMHS’s Graduate Medical Education program. These agreements similarly included arbitration clauses.
Rayhrer's complaint alleges that despite her long-term association with CMHS, she was wrongfully classified as an independent contractor rather than an employee. She further claims that CMHS's refusal to promote her to Program Director and subsequent demotion from Associate Program Director to Teaching Physician constituted discrimination based on gender, harassment, retaliation, and wrongful termination—all violations of FEHA and the Labor Code.
CMHS responded by filing a petition to compel arbitration based on the existing agreements between both parties. However, Rayhrer argued that her claims were statutory and not contractual; hence they fell outside the scope of these arbitration provisions. The trial court sided with Rayhrer, stating that her claims did not arise under or concern the terms of any agreement but were instead rooted in statutory rights provided by FEHA and the Labor Code.
The appellate court upheld this decision, noting that while there is a general policy favoring arbitration under both federal and state law, such agreements must be enforced according to their specific terms. The court found that since Rayhrer's claims pertained to statutory violations rather than breaches of contract terms, they were not subject to mandatory arbitration under the existing agreements.
Rayhrer seeks various forms of relief from the court including damages for lost wages and benefits due to wrongful termination and demotion, compensation for emotional distress caused by harassment and retaliation, as well as legal fees incurred during litigation.
The case is being handled by Judge Ronda J. McKaig at Ventura County Superior Court under Case ID B3824707. Representing CMHS are attorneys Richard J. Simmons and Tyler J. Johnson from Sheppard Mullin Richter & Hampton LLP. Brian R. Weilbacher from Law Offices of Brian R. Weilbacher represents Constanze Rayhrer.