CLACKAMAS GASTROENTEROLOGY ASSOCIATES,P. C. v. WELLS


Syllabus

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,P. C. v. WELLS ( No. 01-1435 )
271 F. 3d 903, reversed and remanded.

CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C. v. WELLS

certiorari to the united states court of appeals for the ninth circuit


No. 01–1435. Argued February 25, 2003—Decided April 22, 2003

Respondent filed suit alleging that petitioner medical clinic violated the Americans with Disabilities Act of 1990 (ADA or Act) when it terminated her employment. Petitioner moved for summary judgment, asserting 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. That assertion’s accuracy depends on whether the four physician-shareholders who own the professional corporation and constitute its board of directors are 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. The Ninth Circuit reversed, finding no reason to permit a professional corporation to reap the tax and civil liability advantages of its corporate status and then argue that it is like a partnership so as to avoid employment discrimination liability.

Held:

1. The common-law element of control is the principal guidepost to be followed in deciding whether the four director-shareholder physicians in this case should be counted as “employees.” Where, as here, a statute does not helpfully define the term “employee,” this Court’s cases construing similar language give guidance in how best to fill the statutory text’s gap. Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318. The professional corporation is a new type of business entity with no exact common-law precedent, but the common law’s definition of the master-servant relationship provides helpful guidance: the focus on the master’s control over the servant. Accordingly, the Equal Employment Opportunity Commission (EEOC) argues that a court should examine whether shareholder-directors operate independently and manage the business or instead are subject to the firm’s control. Specific EEOC guidelines discuss the broad question of who is an “employee” and the narrower one of when partners, officers, board of directors’ members, and major shareholders qualify as employees. The Court is persuaded by the EEOC’s focus on the common-law touchstone of control and specifically by its submission that each of six factors are relevant to the inquiry whether a shareholder-director is an employee. Pp. 4–11.

2. Because the District Court’s findings appear to weigh in favor of concluding that the four physicians are not clinic employees, but evidence in the record may contradict those findings or support a contrary conclusion under the EEOC’s standard, the case is remanded for further proceedings. P. 11.

271 F. 3d 903, reversed and remanded.

Stevens, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O’Connor, Scalia, Kennedy, Souter, and Thomas, JJ., joined. Ginsburg, J., filed a dissenting opinion, in which Breyer, J., joined.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.


TOP

Dissent

CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C., PETITIONER v. DEBORAH WELLS

on writ of certiorari to the united states court of appeals for the ninth circuit


[April 22, 2003]

Justice Ginsburg , with whom Justice Breyer joins, dissenting.

“There is nothing inherently inconsistent between the coexistence of a proprietary and an employment relationship.” Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28, 32 (1961) . As doctors performing the everyday work of petitioner Clackamas Gastroenterology Associates, P. C., the physician-shareholders function in several respects as common-law employees, a designation they embrace for various purposes under federal and state law. Classifying as employees all doctors daily engaged as caregivers on Clackamas’ premises, moreover, serves the animating purpose of the Americans With Disabilities Act of 1990 (ADA or Act). Seeing no cause to shelter Clackamas from the governance of the ADA, I would affirm the judgment of the Court of Appeals.

An “employee,” the ADA provides, is “an individual employed by an employer.” 42 U. S. C. §12111(4). Where, as here, a federal statute uses the word “employee” without explaining the term’s intended scope, we ordinarily presume “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322–323 (1992) (internal quotation marks and citation omitted). The Court today selects one of the common-law indicia of a master-servant relationship—control over the work of others engaged in the business of the enterprise—and accords that factor overriding significance. Ante , at 8. I would not so shrink the inquiry.

Are the physician-shareholders “servants” of Clackamas for the purpose relevant here? The Restatement defines “servant” to mean “an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.” Restatement (Second) of Agency §2(2) (1958) (hereinafter Restatement). When acting as clinic doctors, the physician-shareholders appear to fit the Restatement definition. The doctors provide services on behalf of the corporation, in whose name the practice is conducted. See Ore. Rev. Stat. Ann. §58.185(1)(a) (1998 Supp.) (shareholders of a professional corporation “render the specified professional services of the corporation ” (emphasis added)). The doctors have employment contracts with Clackamas, App. 71, under which they receive salaries and yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities owned or leased by the corporation, App. 29, 71. In performing their duties, the doctors must “compl[y] with … standards [the organization has] established.” App. 66; see Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully employed but highly placed employees of a corporation … are no less servants because they are not controlled in their day-to-day work by other human beings. Their physical activities are controlled by their sense of obligation to devote their time and energies to the interests of the enterprise.”).

The physician-shareholders, it bears emphasis, invite the designation “employee” for various purposes under federal and state law. The Employee Retirement Income Security Act of 1974 (ERISA), much like the ADA, defines “employee” as “any individual employed by an employer.” 29 U. S. C. §1002(6). Clackamas readily acknowledges that the physician-shareholders are “employees” for ERISA purposes. Tr. of Oral Arg. 6–7. Indeed, gaining qualification as “employees” under ERISA was the prime reason the physician-shareholders chose the corporate form instead of a partnership. See id. , at 7. Further, Clackamas agrees, the physician-shareholders are covered by Oregon’s workers’ compensation law, ibid. , a statute applicable to “person[s] … who … furnish services for a remuneration, subject to the direction and control of an employer,” Ore. Rev. Stat. Ann. §656.005(30) (1996 Supp.). Finally, by electing to organize their practice as a corporation, the physician-shareholders created an entity separate and distinct from themselves, one that would afford them limited liability for the debts of the enterprise. §§58.185(4), (5), (10), (11) (1998 Supp.). I see no reason to allow the doctors to escape from their choice of corporate form when the question becomes whether they are employees for purposes of federal antidiscrimination statutes.

Nothing in or about the ADA counsels otherwise. As the Court observes, the reason for exempting businesses with fewer than 15 employees from the Act, was “to spare very small firms from the potentially crushing expense of mastering the intricacies of the antidiscrimination laws, establishing procedures to assure compliance, and defending against suits when efforts at compliance fail.” Ante , at 7 (quoting Papa v. Katy Industries, Inc. , 166 F. 3d 937, 940 (CA7 1999)). The inquiry the Court endorses to determine the physician-shareholders’ qualification as employees asks whether they “ac[t] independently and participat[e] in managing the organization, or … [are] subject to the organization’s control.” Ante , at 9 (quoting 2 Equal Employment Opportunity Commission, Compliance Manual §605:0008, and n. 71 (2000)). Under the Court’s approach, a firm’s coverage by the ADA might sometimes turn on variations in ownership structure unrelated to the magnitude of the company’s business or its capacity for complying with federal prescriptions.

This case is illustrative. In 1996, Clackamas had 4 physician-shareholders and at least 14 other employees for 28 full weeks; in 1997, it had 4 physician-shareholders and at least 14 other employees for 37 full weeks. App. 55–62; see 42 U. S. C. §12111(5) (to be covered by the Act, an employer must have the requisite number of employees “for each working day in each of 20 or more calendar weeks in the current or preceding calendar year”). Beyond question, the corporation would have been covered by the ADA had one of the physician-shareholders sold his stake in the business and become a “mere” employee. Yet such a change in ownership arrangements would not alter the magnitude of Clackamas’ operation: In both circumstances, the corporation would have had at least 18 people on site doing the everyday work of the clinic for the requisite number of weeks.

The Equal Employment Opportunity Commission’s approach, which the Court endorses, it is true, “excludes from protection those who are most able to control the firm’s practices and who, as a consequence, are least vulnerable to the discriminatory treatment prohibited by the Act.” Brief for United States et al. as Amici Curiae 11; see 42 U. S. C. §§12111(8) (only “employees” are protected by the ADA). As this dispute demonstrates, however, the determination whether the physician-shareholders are employees of Clackamas affects not only whether they may sue under the ADA, but also—and of far greater practical import—whether employees like bookkeeper Deborah Anne Wells are covered by the Act. Because the character of the relationship between Clackamas and the doctors supplies no justification for withholding from clerical worker Wells federal protection against discrimination in the workplace, I would affirm the judgment of the Court of Appeals.