WASHINGTON, April 22 (UPI) -- A Supreme Court ruling Tuesday makes it less likely that smaller medical clinics or other professional corporations can be sued under federal anti-discrimination law.
Such laws normally target businesses of 15 employees or more, but the ruling makes it easier for doctors or other professionals not to be included in the count of employees.
The case is far-reaching since many small professional corporations across the country -- such as doctors' or dentists' offices -- could be affected.
"Professional corporations with between 14 and 19 or more employees are likely to find themselves caught in the gray zone between small and large employer categories created by the (Americans with Disabilities Act)," which only applies to businesses with 15 employers or more, a petition filed earlier in the case said.
In the case before the justices, Deborah Wells was employed by Clackamas Gastroenterology Associates, a medical clinic incorporated in Oregon, beginning in 1986. However, Wells suffered from "mixed connective tissue disorder," and in 1997 her physician took her off work for several months. Her employer wanted her back to work earlier and fired her when she didn't show up.
Wells sued the clinic under the Americans with Disabilities Act in U.S. District Court in Portland, Ore.
At trial, Clackamas argued that it could not be targeted by the ADA because it did not have 15 or more employees for the 20 weeks required by the law. Besides four physicians who were shareholders in the corporation, the company employed 12 to 15 employees during the time that Wells was absent from work.
"If Clackamas' physician-shareholders are not counted as 'employees,'" the clinic said in its petition to the high court, "then it would have had too few employees to qualify as an 'employer'" under the ADA. "On the other hand, if the physician-shareholders are counted as 'employees' then the number of employees would have exceeded the number required to bring Clackamas under the coverage of the ADA."
A judge agreed with Clackamas that under the "economic realities" test its four physician-shareholders should be regarded as "partners" in the business, not "employees" of the corporation.
An appeals court, in a 2-1 ruling, disagreed, saying, said the status of the physicians "is clear. During the relevant time periods, in addition to being shareholders and directors of Clackamas, the four physician shareholders actively participated in the management and operation of the medical practice and literally were employees of the corporation. ... "
Clackamas then asked the Supreme Court for review and the justices heard argument in February.
Tuesday, Justice John Paul Stevens wrote the opinion for the Supreme Court majority reversing the appeals court. The ADA does not define the word "employee," Stevens said, which normally means the courts must look to "common law" for guidance. "Common law" is the amalgamation of court decisions built up on an issue over the years.
"We are dealing with a new type of business entity," the professional corporation, "that has no exact precedent in the common law," Stevens conceded.
However, he added, both common law and the Equal Employment Opportunity Commission indicate that those who control the corporation, as opposed to being controlled by it "are proprietors, not employees."
"We are persuaded by the EEOC's focus on the common-law touchstone of control," he said.
Justice Ruth Bader Ginsburg, joined by Justice Stephen Breyer, dissented.
"Classifying as employees all doctors daily engaged as caregivers on Clackamas' premises ... serves the animating purpose of the Americans with Disabilities Act," Ginsburg said.
In the majority opinion, Stevens acknowledged that there may be evidence in the record that would contradict the finding by the federal judge or support a contrary conclusion under the EEOC standard.
The majority sent the case back for a new hearing and a ruling based on its Tuesday opinion.
(No. 01-1435, Clackamas vs. Wells.)
