A doctor works as part of the medical staff at a hospital. The doctor, who is white, feels s/he has been the target of racial discrimination. The doctor complains about the alleged discrimination, after which the hospital initiates a peer review of the doctor’s more recent surgeries. The doctor allegedly has had no patient complaints and review of the doctor’s work indicates that the doctor met the standard of care. Following the peer review, the hospital suspends the doctor’s clinical privileges and terminates the On-Call Agreement with the doctor. The doctor files suit under Title VII, alleging discrimination, and retaliation. Who wins? Read on to find out who and why… You can probably guess from the title of the post who won. Let’s fill in some blanks so we understand what’s really going on. The case is David E. Henry, M.D., v. Adventist Health Castle Medical Center and Alan Cheung, M.D., filed in the US District Court in the District of Hawaii. Here’s some more background:
Dr. David E Henry is a board-certified general and bariatric surgeon, specializing in state-of-the-art laparoscopic and minimally invasive surgery. He entered into a Physician Recruitment Agreement (“Recruitment Agreement”) and an Emergency Department Call Coverage and Uninsured Patient Services Agreement(“On-Call Agreement”) with the hospital in 2015. Per the Recruitment Agreement, he operated a full-time private medical practice in his specialty in Oahu and was on-call at least 5 times a month for the hospital’s Emergency Department. He worked as a member of the hospital’s medical staff from September 1, 2015, to June 28, 2016, had clinical privileges and performed bariatric and laparoscopic surgeries at the hospital. He leased space at the hospital’s outpatient clinic for his private medical practice and was allowed to use the hospital’s operating rooms for his private patients upon request. The hospital filed a motion for summary judgment. The District Court granted the motion, thereby dismissing the doctor’s lawsuit.
Now, for those who have been fortunate enough not to have to deal with litigation, here’s what that means: When one files a motion for summary judgment, one is saying to the court that no significant facts are in dispute and therefore there is no need for a jury trial. (Jurors’ primary function is fact-finding, i.e. determining what likely did nor did not happen and then applying the law as explained by a judge). If there is no need for fact-finding, then a judge can go ahead and apply the relevant law to the facts. So here’s the question: Assuming all of the doctor’s allegations are true, how does the hospital not have to face discrimination and retaliation allegations? Wouldn’t the doctor rather than the hospital be entitled to summary judgment? What and where are the missing pieces?
Title VII of the Civil Rights Act of 1964 protects employees against discrimination. OK, so far so good, but why then can’t the doctor’s claim proceed? Are you ready for the answer? Here it is: The hospital argued, and the court agreed, that the doctor is an independent contractor and not an employee of the hospital. Since Title VII protects employees and not independent contractors, the doctor’s claim failed. Wait. How is the doctor not an employee?
Here is the court’s reasoning: The court focused largely on the hospital’s right to control the manner and means of the doctor’s work, and on other cases generally holding that clinical privileges and on-call arrangements do not create an employment relationship. The court pointed to shared control, implying that the parties essentially had equal control. The court also noted that the hospital did not provide the doctor any employee benefits and that the doctor received third-party (i.e. insurance carrier) payments directly. The doctor derived only 10% of his income from the hospital. (Apparently he also did similar work at another hospital.) The court reiterated that any regulation of the doctor’s work by the hospital fell was part of the “shared control” that exists between a doctor and a hospital. So basically, the court felt that the hospital did not exercise enough control over means, method and manner of work for an employment relationship to exist under these facts.
Does this case mean that a doctor working at a hospital can never be an employee? No. Again, outcomes of cases turn very much on the specific facts. Does it mean that an independent contractor can never file a discrimination claim? No. This case simply means that an independent contractor cannot file a discrimination claim under Title VII of the Civil Rights Act. If an independent contractor does business within a state with broader anti-discrimination laws s/he may be able to file a claim under relevant state law.
So, what does this case mean for employers? As always, the worker’s title or profession is not, in and of itself what determines whether someone is an employee or independent contractor. The right to control work will be an important factor, though it is not the only factor. If your organization is in a dispute with a worker, check with friendly local employment counsel before you conclude that s/he’s not an employee.
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