Fitness-for-duty disputes, missing PIPs, and a paper trail full of holes
New York City Health + Hospitals faces a federal lawsuit alleging it terminated a nonbinary doctor who reported workplace discrimination.
The suit, filed March 23, 2026 (Peterson v. New York City Health + Hospitals Corp., No. 1:26-cv-02365, S.D.N.Y.), was brought by Danielle Peterson, a former dermatology resident at New York Medical College's program at Metropolitan Hospital Center. Peterson, who identifies as nonbinary, alleges they were told to conceal their gender identity from the start — and that when they pushed back, the institution forced them out.
Peterson says they disclosed their nonbinary identity to Program Director Dr. Marian Russo upon arriving at the program. Dr. Russo, the suit alleges, immediately told Peterson "not to tell anyone" about their gender identity or pronouns — effectively making secrecy a condition of the job.
From there, the filing describes a workplace where hostility came from multiple levels. Department Chair Dr. Bijan Safai allegedly complained that Peterson did not resemble their photograph and had "tricked them" when interviewing for the position. He is also alleged to have repeatedly made disparaging remarks about women in the program. A faculty member allegedly referred to transgender and nonbinary individuals as "perverts" during a patient presentation, then tried to walk it back as a joke. Co-residents allegedly misgendered Peterson on multiple occasions despite knowing their identity.
Things came to a head in November 2024. Dr. Safai allegedly told Peterson there was "something mentally wrong" with them and demanded they undergo an internal psychiatric evaluation or have their contract non-renewed. During that confrontation, Peterson disclosed their nonbinary identity to Dr. Safai, who allegedly responded by telling a story about a transman who "was a lot uglier after he transitioned" and suggesting Peterson "would become ugly too" if they transitioned.
Peterson sought an external evaluation instead. Two independent evaluators — Dr. Kristen Sadana on December 6, 2024, and Dr. Ilisse R. Perlmutter on December 27, 2024 — cleared them for duty. Dr. Sadana stated she had "no concern" regarding Peterson's mental health or ability to fulfill their role. Despite those findings, Peterson alleges they were removed from clinical duties for an entire month.
The procedural shortcomings alleged in this case are worth noting for anyone managing HR operations. Peterson says they were never given a Performance Improvement Plan — something the institution's own Designated Institutional Official stated was contrary to policy. A remediation plan did not arrive until 105 days after Peterson was informed their contract would not be renewed. The fitness-for-duty evaluation report used female pronouns despite Peterson's known nonbinary identity. And Peterson was denied access to their own personnel file, despite contractual rights to review it.
The non-renewal became final on April 24, 2025, citing unsatisfactory completion of the remediation plan and lack of improvement in professionalism. This came months after Peterson filed a formal discrimination complaint in December 2024.
No determination has been reached in this case, and the defendant has not yet responded. A jury trial has been requested.
For HR leaders, the case is a pointed illustration of what can unfold when supervisory misconduct goes unchecked and institutional processes — from performance documentation to fitness-for-duty protocols — lack rigor and consistency.
