Term: 2002
Docket: 01-1435
Clackamas Gastroenterology Associates, P. C. v. Deborah Wells
- Pro
01-1435 CLACKAMAS GASTROENTEROLOGY v. WELLS Ruling Below: CA 9, 271 F.3d 903. QUESTION PRESENTED Clackamas Gastroenterology Associates, P.C. is a medical clinic formed as a professional corporation but which operates and has legal attributes of a partnership. The question presented is whether a federal court should apply an economic realities test to determine if the Clinic's physician-shareholders are counted as "employees" for the purpose of determining if the Clinic is a "covered entity" subject to the ADA and other federal anti-discrimination statutes. In this case, the Ninth Circuit concluded that the physician-shareholders are employees. The court below rejected the holdings of the Seventh, Eighth and Eleventh Circuits which used an economic realities test. Instead, it adopted the reasoning of the Second Circuit which rejected that test. CERT. GRANTED: 10/1/02
The U.S. Supreme Court case Clackamas Gastroenterology Associates, P.C. v. Deborah Wells (2002) revolved around the interpretation of who qualifies as an "employee" under the Americans with Disabilities Act (ADA). The plaintiff, Deborah Wells, alleged that her employer, Clackamas Gastroenterology Associates discriminated against her due to a disability and filed a lawsuit under ADA provisions. However, for ADA protections to apply, an entity must have 15 or more employees; hence the defendant argued they had less than this number because its four shareholder-doctors were not employees but owners instead. The court was tasked with determining whether these doctors should be considered employees or not. In their decision-making process they used guidance from Equal Employment Opportunity Commission's six-factor test which examines aspects such as hiring/firing power and supervision levels among others in order to determine employment status.The Supreme Court ruled that these doctors could indeed be counted as employees if they acted in ways similar to traditional salaried workers rather than business owners.
In the case of Clackamas Gastroenterology Associates, P.C. v. Deborah Wells, the dissenting opinion argued that professional corporations should be treated as partnerships for purposes of determining employer status under the Americans with Disabilities Act (ADA). The dissent disagreed with the majority's reliance on common-law agency principles to determine whether shareholders in a professional corporation are employees or employers. Instead, they believed that Congress intended to treat professionals incorporated as a PC differently from other corporate entities when it enacted ADA and similar statutes. They also pointed out practical difficulties in applying common-law tests to modern-day professional corporations due to their unique structure and operation compared to traditional businesses. Therefore, they would have held that all shareholders in a professional corporation are counted as employees regardless of their control over business decisions.
