A healthcare reform foe's alleged history of discrimination

Plaintiffs claim conservative activist Rick Scott had strange criteria about who could work in his clinics

Published October 1, 2009 7:09AM (EDT)

Rick Scott talks about Solantic to Texas Congressman Michael Burgess, chair of the Congressional Health Care Caucus
Rick Scott talks about Solantic to Texas Congressman Michael Burgess, chair of the Congressional Health Care Caucus

This summer, St. Petersburg, Fla., neurosurgeon David McKalip caught heat for sending an e-mail depicting President Obama as a witch doctor with a bone through his nose. McKalip, a neurosurgeon and founder of the anti-healthcare reform group Doctors for Patient Freedom, sent the photo to a conservative listserv with a note saying "Funny stuff" and the caption "Obamacare – Coming soon to a clinic near you." The C in Obamacare was a hammer and sickle.

Given that racial unease has bubbled under much of the right-wing opposition to Obama's political agenda, it's not surprising that it should surface in the online joshings of a healthcare reform foe, even one as respectable as Dr. McKalip, a member of the American Medical Association's House of Delegates and president of the Pinellas County Medical Association. (McKalip resigned from the local post, took a leave of absence from his AMA position in the wake of the e-mail, apologized profusely and withdrew from a public role in the anti-reform movement.) But a Salon investigation of a far more prominent healthcare foe has found allegations of discrimination that go beyond a tasteless e-mail. Plaintiffs have charged that the healthcare company owned by Rick Scott, who continues his multimillion-dollar, self-funded campaign against reform, practiced hiring discrimination based on ethnicity and appearance.

After six months and lots of money, Scott, founder of Conservatives for Patients' Rights (and an ally of McKalip), has finally seen the fruits of his multimillion-dollar campaign against reform. Scott, a millionaire healthcare entrepreneur, predicted that when Congress reconvened this September the public option would be dead. "While Victory is near, we must not rest," Scott crowed on CPR's Web site. Scott himself never rested. He met with lawmakers, coordinated conference calls with conservative activists, wrote opinion pieces and spoke to the faithful about the evils of socialized medicine. Conservatives for Patients' Rights targeted elected officials in 11 states with TV ads hoping constituents would pressure the lawmakers to oppose proposed changes. Sure enough, when the public option failed in the Senate Finance Committee Tuesday, Scott took credit in this video.

Scott came to the fight with a background in the business of healthcare; in the 1990s he was the CEO of the country's largest chain of hospitals, until that company, Columbia/HCA, pleaded guilty to defrauding the government in 1997 and Scott was ousted (he was never charged in the fraud). Determined to reclaim some of his lost clout in the healthcare field and rehabilitate his image, in 2001 he started a chain of walk-in clinics in Florida called Solantic.

Scott proudly talks about Solantic during his anti-reform campaign, holding it out as an example of the kind of free-market ingenuity that can fix our ailing healthcare infrastructure, as opposed to big government. "Solantic has continued to prove over the past eight years that it is possible to lower healthcare costs through the free market and still deliver quality care to patients," he wrote in an e-mail statement to Salon.

Yet even before it was fully operational Solantic executives were accused of a pattern of serial discrimination in hiring, a pattern supposedly initiated by Scott himself. The suits alleged a standing policy not to hire overweight women, Hispanics with strong accents, older women and black women.

The company settled the suits, and never admitted any wrongdoing. Today, the company's CEO, Karen Bowling, adamantly denies there was ever such a policy. But as Scott exerts influence on the national healthcare debate, and holds up his own company as a model of the virtues of the for-profit system, the chronology of the accusations is compelling. It starts with one of the very first people Solantic hired.

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David Yarian's office is located south of Jacksonville, Fla., in a brand-new medical complex carved out of some nearby woods. Yarian, a 56-year-old doctor with a genial, round face and neatly parted graying hair, who favors crisply starched shirts with the cuffs folded inside the shirtsleeves, is currently the associate director of a community hospice there. "A nonprofit," he proudly points out. His emphasis is noted; the last for-profit medical venture Yarian was involved in was Scott's Solantic.

In 2001, tired of the commute from Jacksonville to his job running an occupational medical center two counties away, Yarian responded to a newspaper ad for a doctor to help the start-up Solantic. In June of that year, Bowling met Yarian inside a rented conference room at a Jacksonville office park.

"After she interviewed me, Rick Scott flew down and interviewed me," Yarian recalls. At the end of the interview, Yarian says, Scott explained he was doing this because he was passionate about healthcare. "He told me he didn't need the money," Yarian recalls. (Scott was paid $10 million to walk away as CEO of Columbia/HCA along with $300 million in stock.) Later, when Yarian learned about Scott's past, he surmised that part of what motivated Scott was the need to prove that his success at Columbia/HCA was not a fluke, or the product of fraud. "He really wanted to be able to say, 'Look at me, I did it again in healthcare!'" Yarian says.

On June 12, 2001, Solantic offered Yarian $200,000 to be its regional medical director. It was exciting, he says, to be on the ground floor of a company whose founders were ambitious. "The goal all along was to make this a brand that could go national," Yarian says. "My role was to put together the clinical design for all the urgent care centers." He was in charge, nominally, of everything from selecting medical equipment to purchasing malpractice insurance. From the very start, though, Scott became very hands on. "I'd receive a dozen e-mails a day from him, and at least six phone calls. I didn't think he did anything else," Yarian recounts. In fact, Scott ran the investment firm Richard L. Scott Investments. "Scott ran everything, no decision could be made without his approval," Yarian says.

And that became an obstacle.

"One of the first things we needed was an R.N. [registered nurse] to help oversee the clinical part with me," Yarian recalls. "There was this great young individual who had a lot of experience with clinic start-ups. She interviewed with me, and then with Karen. We both loved her. When I got on the phone with Rick, the first thing he says is, 'What does she look like?'"

Yarian says he began describing her to Scott, at one point mentioning that "She's a little bit overweight."

"Immediately Rick says to me, 'Fat people can't work at our centers.' And that sort of set the trend," Yarian says. "I'd be interviewing someone and his first concern was what they looked like. He was always sending e-mails that people had to be fit and attractive. And no one was hired without his approval."

(Rick Scott declined to return several messages seeking comment at both his Naples investment firm, and at Conservatives for Patients' Rights. Salon then sent a detailed list of Dr. Yarian's statements to CPR. Through a CPR spokesman, Scott sent the following e-mail: "This current story, focusing on the unsubstantiated claims of one disgruntled former employee who left the company after only four months, is but the latest example of Salon's despicable tactics. The company I founded, Solantic ... has a vibrant and diverse workforce that is representative of the communities in which they are located, and our employees are dedicated to delivering quick, responsive and high-quality care to all of our patients. Other than calling Yarian's comments "unsubstantiated," Scott neither denied nor confirmed these events.)

"He was so hung up on this idea of trim, fit people we [Solantic employees] would joke about how nuts he was," Yarian says. "Initially I laughed too. But then I saw the depth of it. And I began feeling that this wasn't right." He decided to approach Bowling. "But when I brought up my concerns that this might be discrimination with her, she said, 'I'm not going to give up this opportunity he has given me.'"

Discriminating against someone because they are overweight is not against the law, because the merely overweight are not a protected class of people under the law. Those who are considered "morbidly obese," however, might qualify under the Americans With Disabilities Act. "One would hope an employer would hire based on merit," explains Justine Lisser, a senior attorney-adviser at the federal government's Equal Employment Opportunity Commission (EEOC), speaking in general. "But it's not against the law for an employer to be a jerk."

Soon enough, Yarian claims, Scott became still more specific about who should not be hired.

After the attacks on Sept. 11, Yarian says that Scott phoned him and stated that he should be careful not to hire anyone of Middle Eastern descent because they might scare off customers. At the time, Yarian was willing to excuse the directive as part of the collective shock the country was going through.

In November, though, Yarian interviewed a Hispanic man for a supervisory nurse position. "He was great. He had all the qualities and experience I was after," Yarian says. "But he had a slight accent. When Rick found out, he said, 'Nope. All our employees have to be mainstream.'"

Yarian, who is married to an African-American woman, felt that Scott's odd obsession with weight and appearance might have just crossed a legal boundary. "Mainstream? What did that even mean?" he says he remembers thinking. "It was just a very, very uncomfortable feeling to realize this after you got to know him."

(The EEOC's Lisser zeroed in on that word when I mentioned it. "We at the EEOC would want to carefully check out a company that expressly stated a hiring guideline specifying 'mainstream' people," she says. "We've seen 'mainstream' and 'clean-cut' used as code words to discriminate based on race and national origin before.")

Yarian had the same instinctual response. "When they started talking 'mainstream,' to me that meant discrimination," he says. "The next day I sent him an e-mail, and told him I didn't feel comfortable with our conversation. I asked him, 'What do you mean by mainstream?' I never got an answer."

Instead, the following day Bowling called him in for a meeting. "She told me, 'If you can't change your attitude about this then you have no future with the company.' And she told me not to communicate with Rick anymore," he recalls. "She said they put together a severance package of about $30,000 for me." Yarian says he refused the package because his employment contract specified that if he was terminated without cause he was entitled to six months' salary -- or about $100,000.

Yarian took the next two business days, a Monday and Tuesday, off. When he went in on Wednesday Bowling instructed him to take his personal effects and leave. He had been fired. His computer access had been terminated and a Jacksonville City police officer was summoned to escort him out. Yarian sued for breach of contract, asserting that he had been fired for opposing the company's discriminatory hiring practices.

In December of 2002 the two sides settled, with Solantic paying Yarian about $80,000, of which more than half went to lawyers.

In addition to apparent discrimination, Yarian says Scott's hiring prohibitions also meant that he couldn't hire the best people for the job, a crucial matter when it comes to administering healthcare. When Yarian told Scott that quality was being impacted, Scott, he says, responded, "Quality is assumed." Yarian still marvels at the comment. "Well, I couldn't hire the most qualified people, so I didn't know what he meant."

In a 2002 deposition in the case, Bowling conceded that Yarian had come to her with concerns about the company's hiring practices. "He did express concerns that we -- that he didn't believe in the hiring practices, and how do you interpret what's presentable," she said. "And alluded to overweight people." Bowling rebuffed the idea that her company was discriminatory in any sense. "I challenged him by saying, 'Can you tell me one time in Solantic's employment history that we have not hired a candidate because they were Hispanic, overweight, whatever?'" she asserted. "And the answer was 'No.'"

Bowling also sent Yarian a letter at the time enumerating several violations of company policy warranting his dismissal -- allowing a pharmaceutical representative to leave samples in his office; telling a doctor candidate that he did not get the job when the company was still evaluating him, and repeatedly complaining that Bowling "interfered with your responsibility to recruit medical staff by refusing to consider well-qualified applicants because they spoke with a Hispanic accent or because they were overweight." Bowling says when she pressed him for specifics, "You could not name any." (Yarian, of course, says he gave her several specifics).

On a broiling summer afternoon, Bowling, pleasant and upbeat, met me at Solantic's Tamarac clinic outside Fort Lauderdale to respond further to Yarian's assertions. She disputed most of Yarian's version of events; Scott was not involved in hiring, she said; she never heard Scott say the company would not hire overweight people or people with accents; and she never heard him mention that all the company's hires had to be "mainstream" Americans. "What does that even mean?" she asked aloud. And, she said, Yarian's account of his attempts to hire a registered nurse was not accurate. "I don't think we even had a position for a nurse in 2001," she asserted. "We never hired anyone in that position." ("What a joke!" Yarian blurted when I told him this. "It was a key position; the hire we needed the most after the CFO, the human resources director, the IT guy and me.")

"If you look at my background, the way I've lived my life, the people I've hired to previous positions, you would know I don't discriminate," Bowling offers.

Perhaps, but within a year after Yarian left, a pattern emerged as Solantic went on a hiring binge to staff its five pilot clinics.

Solantic would hold what employees called "casting calls," group job interviews for its front office and clerical help. Many ex-employees have alleged these group sessions allowed management to eyeball prospective hires and make sure only the ones fitting the company's aesthetic guidelines were selected.

From 2003 to 2005, five Solantic supervisors, all working in different clinics, have claimed they were explicitly prevented from hiring people they deemed the most qualified because the candidates were either overweight, too old, Hispanic or black. The supervisors all prepared lawsuits with the same lawyer, claiming they were fired or forced to quit "because they did not want to enforce Solantic's discriminatory practices," as their complaints state. Two employees corroborated specific incidents in their own lawsuits against the company.

  • Jacquelyn Lee, a manager at Solantic's Arlington and Neptune Beach offices, claimed in court papers that she offered a job to a Hispanic woman who was slightly overweight, and was told by her supervisors to rescind the offer. Lee says she objected and was fired on Dec. 30, 2003.
  • Holly Waldrop, a manager at Solantic's Westside operation, claimed supervisors told her she could not hire a woman Waldrop wanted to because the woman was "too old" and women at that age don't learn well. Waldrop complained to her superiors that this was discrimination, and was fired a short time later, in May 2004.
  • In July 2004 Lucinda Hietbrink, a manager at Solantic's Jacksonville Beach location, interviewed Kolandra Abraham, a black woman, for a clerical job. Hietbrink "extended the job offer, which was accepted by the applicant, and she was scheduled for orientation. After members of higher management saw the applicant/new hire, the employment offer was rescinded," Hietbrink states in court papers. Hietbrink stated that she had already objected once before when management wanted to fire a woman because she was overweight. She claimed she strenuously objected to rescinding Abraham's offer as well, and was fired a short time later, on July 22, 2004.
  • Abraham also filed a lawsuit, saying she was offered the job, but, according to court papers, "after the human resources manager saw her, she told Ms. Abraham that she was not in the budget."
  • In the summer of 2004, Carrie Fernandez, a manager at Solantic's Orange Park clinic, hired Sarah Carter as a registrar. Carter, who is white, had just had a baby. But after meeting a market leader in her office named James Bennett, Carter was sent to talk to a human resources manager. During that meeting Carter states in court papers that the manager stepped out for a minute, allowing Carter to see an e-mail printout Bennett had written stating that Carter was "too hefty" and, according to the complaint, "therefore did not meet the company's appearance standards."
  • Fernandez filed her own complaint against the company, stating that her supervisors instructed her to rescind the offer to Carter because she was "too hefty." Fernandez, who had objected once before when she was told not to hire a qualified black woman "due to her race and age," complained to her superiors that this amounted to discrimination and quit. In the aftermath, Carter was hired, but quit in June 2004 after she was assigned to work under Bennett.
  • Stephanie Davis, a manager in Solantic's Northside clinic, is white but has family members who are black. She claimed that she was so intimidated by the company's discrimination practices that she took down personal photos in her office "fearing she would be terminated if higher management saw them during an inspection of her center." Eventually Davis filed a hostile work environment complaint with the EEOC, and then claims she was retaliated against until she quit on March 3, 2005.

Rick Scott was not mentioned in any of the complaints.

A combined suit on behalf of all seven plaintiffs was filed on July 14, 2006. On May 23, 2007, less than a year later, Solantic settled with all the women for an undisclosed sum. Because the settlement terms are confidential, with penalties for speaking publicly, all the plaintiffs contacted declined to be interviewed. Bowling, too, smiled tersely when asked about the cases, saying only; "Do we make hiring decisions based on a protected class of people? Absolutely not. And we have diversity training for our employees."

Florida is one of a handful of states governed by the "At Will" employment doctrine -- which gives employers broad latitude to fire employees.

"You can't fire or fail to hire someone based on sex, race, national origin, religion or age," said Howard "Skip" Pita, a Miami trial attorney who handles discrimination litigation. "Otherwise you can fire someone for almost anything. An employer fires you because he thinks you're too fat or doesn't like the way you dress? Too bad."

In the Solantic case, the number of complaints from both supervisors and employees, some of which corroborate each other, and the swiftness of the settlement, leads Pita, who has no connection to this case, to believe the company felt it was vulnerable. "Usually cases like this don't settle early on, unless the evidence is strong," he said.

None of this was reported in the media, local or otherwise. Until I brought it up to Dr. Yarian he had never heard of the women and their lawsuits. He was surprised he hadn't been contacted by the women's lawyers. "Obviously, it doesn't surprise me," he noted. "Rick Scott is a savvy businessman, but he has a lot of hangups."

I visited three Solantic clinics, and their staffing seemed to be a melting pot. There was a black man and black woman at the Tamarac center, an Asian woman at the Perimeter Road facility in Jacksonville, and a white woman at the Orange Park clinic. All of them were young and fit. Scott made sure to send an e-mail asserting that currently 53 percent of Solantic's employees are white, 20 percent black and 17 percent Hispanic.

Scott was also contemptuous of Salon for pursuing this story. "It is no surprise that Salon Magazine is once again dutifully playing the role of attack dog on behalf of liberals in Washington just as their top agenda item -- government-run healthcare -- has run into trouble on Capitol Hill. Salon, true to form, is launching another personal attack designed to distract their readers from the substantive issues of the healthcare debate."

By Tristram Korten

Tristram Korten is a journalist living in Miami Beach.

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