First, to the OP, I'm sorry about your predicament. It truly is unfortunate and I hope that you are able to work things out. I think legal action in these cases is almost always a lost cause and almost never the best route and history seems to have proven that. Your best bet is to squeeze as many concessions and as much help as you can from your former PD and try and move on.
...being a resident does not mean that you no longer have rights or that all your rights are determined by the hospital.
I'm afraid that's exactly what it means to be a resident. All your rights are determined by your institutional GME policies, and, thanks to the impotence, willful negligence, or downright collusion of the ACGME, those rights can vary widely from one institution to another. There is no standardization of the process to reduce the likelihood of disparities across institutions. They never intervene or second-guess resident disciplinary matters and never involve themselves with individual cases. This lack of independent oversight means program directors are given extremely powerful mandates with essentially no checks-and-balances. A perfect combination for abuse of their discretion.
Sure, as part of the required "due process" residents are supposedly entitled too, an appeals process is usually included within GME policy. I can only imagine what a joke that is at most places. It's the program director's word against the lowly resident's. Medicine is already a small world, but within an institution, it is incredibly smaller. Those involved in the appeals process, even if they are from different departments and had no involvement with any of the involved parties, likely know the PD on a personal level, and even if they didn't, would almost certainly place greater weight on the PD's opinion than the facts of the matter. Some PDs have appointments beyond program director and have extensive institutional ties which would bring them into contact with many faculty and administration members.
I'd be curious to know the percentage of cases upheld on appeal vs. in the judicial system. I'm sure it would be embarassingly higher, and, I'm sure that's not because the programs always get it right.
Abuse of discretion is a real thing. It's not some conspiracy theory pushed by the disenfranchised in medical education. Just one example off the top of my head involved a resident who was arrested for physical battery involving another employee in the hospital. This particular resident ended up pleading out and serving a very short term in jail but was allowed to remain in the program. I was told of another resident in that same institution but in a different program who was terminated--despite performing well clinically and having high ITE scores--for the good 'ole "personality conflict" with an attending.
Now, I don't know the specifics of either case, but I do know if the guy with the "personality conflict" had to go then the guy with the criminal record should have to go as well. I was told of other examples at that particular hospital as well. I'm sure if greater transparency were required, the disparities and abuse of discretion uncovered would be egregious and astounding. I believe that greater transparency is the only thing that will keep this process in check since there's no real hope the ACGME will step up. In terms of absolute numbers, it doesn't affect enough residents at this point for any true reform to occur but it's a travesty nonetheless to those whose lives are affected and careers disrupted. At present, the iron curtain that most program directors operate behind allows them more discretion than any one person should ever have and with no true oversight.
