Clackamas Gastroenterology Associates, P. C. v. Wells

Background

Clackamas Gastroenterology Associates, P.C., a medical clinic in Oregon, employed Deborah Anne Wells as a bookkeeper from 1986 until 1997. After she was fired, Wells sued the clinic under the ADA alleging disability discrimination. The clinic argued it was exempt because it did not have the statutory 15 employees, and the key issue was whether four physician-shareholders who own and run the corporation should be counted as employees. The District Court granted summary judgment for the clinic; the Ninth Circuit reversed.

Reasoning

The Court explained the ADA’s definition of “employee” is circular and turned to common-law agency principles, focusing on control as the principal guide. It endorsed the Equal Employment Opportunity Commission’s approach and listed six relevant factors: hiring and firing power; supervision; reporting relationships; ability to influence the organization; the parties’ intent in written agreements; and sharing profits, losses, and liabilities. The Court stressed no single factor is decisive and directed courts to examine all incidents of the relationship.

Real world impact

The ruling means whether small professional firms fall under the ADA will depend on case-specific fact-finding about how much control physician-shareholders exercise. Employees like Wells may be covered if shareholder-directors are subject to the firm’s control; otherwise small firms may remain exempt under the 15-employee threshold. Because the Court reversed and remanded, the final outcome awaits further factual development.

Dissents or concurrances

Justice Ginsburg, joined by Justice Breyer, dissented, arguing the physician-shareholders functioned as common-law employees; she noted they received salaries and bonuses, worked at clinic facilities, complied with clinic standards, reported to a personnel manager, and were treated as employees for ERISA and workers’ compensation.