In 2003, the Supreme Court of the United States heard the case of Clackamas Gastroenterology Associates, a lawsuit involving a medical clinic owned by four physician shareholders who also served as its board of directors. The key issue was whether these physicians were considered employees or proprietors under the Americans with Disabilities Act, ADA. This distinction was crucial, as an employee who was terminated from the clinic filed a lawsuit alleging unlawful discrimination based on disability. The clinic claimed that it did not have 15 or more employees, which would exempt it from ADA requirements. The district court sided with the clinic, stating that the four physicians were more like partners than employees.
However, on appeal, The Court of Appeals for the Ninth Circuit reversed the decision, arguing that a professional corporation cannot avoid liability for unlawful employment discrimination by claiming to be like a partnership. When determining if someone is an employee or proprietor, the court looks at various factors—who is in control of the organization, what the party's agreements say, and whether the person shares in profits and losses. The Supreme Court ultimately held that a professional corporation cannot claim partnership status to avoid ADA liability for unlawful employment discrimination.
The case was remanded to the Court of Appeals to reconsider whether the four director-shareholder physicians were employees under EEOC guidelines, taking into account their control over the clinic and their independence. What you're looking for Visit lse.law Elevate your mind Leave the stress of class behind