Judith Walker v. City of Cookeville / Cookeville Regional Medical

This appeal involves an employment dispute between the Cookeville Regional Medical Center and a senior management employee. After the hospital's chief executive officer removed the employee from her position as Interim Assistant Administrator and Director of Quality Management, the employee resigned and filed suit in the Circuit Court for Putnam County alleging that the hospital breached her employment contract by declining to pay her the severance benefits required by her employment contract. Following a bench trial, the court found that the hospital had breached the employment contract and awarded the employee severance benefits, prejudgment interest, and discretionary costs. The hospital argues on this appeal that the employee was not entitled to severance pay because (1) she had voluntarily resigned, (2) the parties understood that the employee's appointment as assistant administrator was not permanent, and (3) the employee's demotion did not materially alter her duties or status. We affirm the judgment because the hospital breached the employee's contract when it demoted her and declined to pay her the severance benefits required by her employment contract.