LOCATION: 1220 Student Activities Building - Undergraduate Admissions
DOCKET NO.: 01-1435
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 538 US 440 (2003)
ARGUED: Feb 25, 2003
DECIDED: Apr 22, 2003
Craig A. Crispin - Argued the cause for the respondent
Irving L. Gornstein - Department of Justice, argued the cause for the United States, as amicus curiae, supporting the petitioner
Steven W. Seymour - Argued the cause for the petitioner
Facts of the case
Deborah Wells worked for Clackamas Gastroenterology Associates, P.C. from 1986 until 1997. Wells filed suit, alleging that Clackamas Gastroenterology violated the Americans with Disabilities Act of 1990 (ADA) when it terminated her employment. Clackamas moved for summary judgment, arguing that it was not covered by the Act because it did not have 15 or more employees for the 20 weeks required by the ADA. This argument depended on the four physician-shareholders, who own the professional corporation and constitute its board of directors, not being counted as employees. In granting the motion, the District Court concluded that the physicians were more analogous to partners in a partnership than to shareholders in a corporation and therefore were not employees under the ADA. In reversing, the Court of Appeals found no reasoned to permit the professional corporation to argue it was a partnership so as to avoid employment discrimination liability.
Should four physicians actively engaged in medical practice as shareholders and directors of a professional corporation be counted as employees under the Americans with Disabilities Act of 1990?
Media for Clackamas Gastroenterology Associates, P. C. v. WellsAudio Transcription for Oral Argument - February 25, 2003 in Clackamas Gastroenterology Associates, P. C. v. Wells
Audio Transcription for Opinion Announcement - April 22, 2003 in Clackamas Gastroenterology Associates, P. C. v. Wells
William H. Rehnquist:
The opinion of the Court in No. 01-1435, Clackamas Gastroenterology Associates will be announced by Justice Stevens.
John Paul Stevens:
Respondent Deborah Wells was employed by a petitioner in Oregon Medical Clinic that is organized as a professional corporation.
After her termination, she brought this action against petitioner alleging unlawful discrimination on the basis of disability under Title I of the Americans with Disabilities Act.
Petitioner moved for summary judgment asserting that was not covered by the Act because it did not have 15 or more employees.
The accuracy of that assertion depends on whether the four doctors who serve as the clinic's four director shareholders are counted as employees.
Relying on an economic reliaties test, the District Court concluded that the four director shareholders were analogous to partners in the partnership and therefore were not employees.
On appeal, the divided panel of the Ninth Circuit reversed holding that the use of any corporation including a professional corporation precludes an examination to determine whether the entity is in fact a partnership.
We granted certiorari and now reverse the Court of Appeals and remand the case for further proceedings.
Though, the ADA does not helpfully define the term "employee", the statute says that an employee is an individual employed by an employer.
Our cases, construing that term in other context, tell us to look to common-law agency doctrine when filling the gap in the statutory text.
Particularly helpful is the common-law's definition of the master-servant relationship which focuses on the master's control over the servant.
In accord with the common-law's focus on the element of control the Equal Employment Opportunity Commission has adopted specific guidelines to be considered in determining whether a director shareholder is an employee subject to a firm's control or a person who operates independently and manages a business.
We are persuaded by the EEOC's guidelines and by its focus on the common-law touchstone of control.
Accordingly, we have decided to send to case back to the Ninth Circuit to consider whether the four doctors are employees of the clinic in light of the EEOC's guidelines.
Justice Ginsburg has filed a dissenting opinion which Justice Breyer joins.