U.S. Supreme Court Holds Physician-Shareholders Can Be "Employees" Under The Federal Antidiscrimination Laws

In Clackamas Gastroenterology Assocs. v. Wells, the U.S. Supreme Court ruled that physicians-shareholders in a professional corporation can, in some instances, be considered "employees" under the federal antidiscrimination laws. These laws include Title VII, the Americans with Disabilities Act ("ADA"), and the Age Discrimination in Employment Act. The Court ruled that whether a physician-shareholder is an "employee" depends on the extent to which the physician manages the organization or whether the physician is instead subject to the organization's control. The mere fact that a physician owns part of the organization or has a particular title within the organization does not determine the issue. The decision may affect whether small health clinics are required to abide by federal antidiscrimination laws. For example, the Court noted that the Clackamas Gastroenterology Associates would be subject to the ADA only if its four physician-shareholders are considered "employees." The ruling may also mean that some physician-shareholders may bring discrimination lawsuits themselves, as "employees." With this decision, professional corporations and professional associations will need to consider the possibility that the antidiscrimination laws apply to the employment decisions they make regarding their physicians.

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