Document: 538 U.S. 440 CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C.v.WELLS. No. 01-1435. Supreme Court of United States. Argued February 25, 2003. Decided April 22, Respondent filed suit alleging that petitioner medical clinic violated the Americans with Disabilities Act 1990 (ADA or Act) when it terminated her employment. Petitioner moved for summary judgment, asserting was not covered by because did have 15 more employees 20 weeks required ADA. That assertion's accuracy depends on whether four physician-shareholders who own professional corporation and constitute its board directors are counted as employees. In granting motion, District concluded physicians were analogous to partners in a partnership than shareholders therefore under The Ninth Circuit reversed, finding no reason permit reap tax civil liability advantages corporate status then argue is like so avoid employment discrimination liability. Held: 1. common-law element control principal guidepost be followed deciding director-shareholder this case should "employees." Where, here, statute does helpfully define term "employee," Court's cases construing similar language give guidance how best fill statutory text's gap. Nationwide Mut. Ins. Co. v. Darden, 503 318, 322, 323. new type business entity exact precedent, but common law's definition master-servant relationship provides helpful guidance: focus master's over servant. Accordingly, Equal Employment Opportunity Commission (EEOC) argues court examine shareholder-directors operate independently manage instead subject firm's control. Specific EEOC guidelines discuss broad question an "employee" narrower one partners, officers, directors' members, major qualify persuaded EEOC's touchstone specifically submission each six factors relevant inquiry shareholder-director employee. Pp. 444-451. 2. Because findings appear weigh favor concluding employees, evidence record may contradict those support contrary conclusion standard, remanded further proceedings. 451. 271 F. 3d 903, reversed remanded. STEVENS, J., delivered opinion Court, which REHNQUIST, C. O'CONNOR, SCALIA, KENNEDY, SOUTER, THOMAS, JJ., joined. GINSBURG, dissenting opinion, BREYER, joined, post, p. 1 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR NINTH CIRCUIT. 2 Steven W. Seymour argued cause petitioner. With him briefs Andria Kelly. 3 Irving L. Gornstein States et al. amici curiae urging reversal. brief Solicitor General Olson, Deputy Clement, Philip B. Sklover, Lorraine Davis, Robert J. Gregory. 4 Craig A. Crispin respondent.* 5 JUSTICE STEVENS Court. 6 Act), 104 Stat. 327, amended, 42 U. S. § 12101 seq., other federal antidiscrimination legislation,1 inapplicable very small businesses. Under ADA "employer" unless work force includes "15 working day calendar current preceding year." 12111(5). actively engaged practice 7 * Petitioner, Clackamas Gastroenterology Associates, C., Oregon. It employed respondent, Deborah Anne Wells, bookkeeper from 1986 until 1997. After termination, she brought action against unlawful basis disability Title I denied statute. undisputed assertion 8 adopting Magistrate Judge's recommendation, granted motion. Relying "economic realities" test adopted Seventh Dowd & Dowd, Ltd., 736 2d 1177, 1178 (1984), doctors "more general corporation" "not purposes laws." App. 89. 9 A divided panel Appeals reversed. Noting Second had rejected economic realities approach, majority held use any corporation, including "`precludes examination designed determine fact partnership.'" 905 (2001) (quoting Hyland New Haven Radiology 794 793, 798 (CA2 1986)). saw "no secure `best both possible worlds' allowing assert order discrimination." 3d, at 905. judge stressed differences between Oregon physicians' ordinary corporation,2 Congress' reasons exempting employers coverage apply Id., 906-909 (opinion Graber, J.). 10 We certiorari resolve conflict Circuits, extends beyond Circuits.3 536 990 (2002). II 11 "We often been asked construe meaning `employee' where containing it." 322 (1992). simply states "an individual employer." 12111(4). surely qualifies mere "nominal definition" "completely circular explains nothing." S., As we explained our us gap text. 12 Darden faced insurance salesman independent contractor Employee Retirement Income Security 1974 (ERISA). ERISA's circular," 323, same approach previously used sculptor within Copyright 1976, see Community Creative Non-Violence Reid, 490 730 (1989),4 determining ERISA.5 Quoting 739-740, "`when Congress has without defining it, intended describe conventional understood agency doctrine.'" 322-323. 13 Rather looking law, courts asking is, reality, "partner." Brief 9, 15-16, 21 (arguing "those properly classified `employees' anti-discrimination statutes"). employee, however, cannot answered appears functional equivalent partner. Today there partnerships include hundreds some whom well "employees" concentrated number managing partners. Cf. Hishon King Spalding, 467 69, 79, n. (1984) (Powell, concurring) ("[A]n employer evade strictures VII labeling `partners'"); Sidley Austin Brown Wood, 315 696, 709 (CA7 2002) (Easterbrook, concurring part judgment); Strother Southern California Permanente Medical Group, 79 859 (CA9 1996). Thus, — rather they begs question. 14 Nor fare better. majority's paid particular attention "the purpose ADA," 905, consistent ridding Nation evil discrimination. See 12101(b).6 Nevertheless, two countervailing considerations must weighed balance. First, noted below, congressional decision limit legislation firms justification respected namely, easing entry into market preserving competitive position smaller firms. 908 J.) ("Congress decided `to spare potentially crushing expense mastering intricacies laws, establishing procedures assure compliance, defending suits efforts compliance fail'" Papa Katy Industries, Inc., 166 937, 940 (CA7), cert. denied, 528 1019 (1999))). Second, reminds us, silence reflects expectation will look law gaps text, particularly undefined settled law. overridden judicial decisions went effort correct "`the mischief'" aimed. 324-325. Perhaps Appeals' parties' failure stems dealing precedent State statutes now incorporation practicing profession, past so-called learned professions permitted organize entities." 1A Fletcher, Cyclopedia Law Private Corporations 112.10 (rev. ed. 1997-2002). corporations relatively young participants market, their features vary State. generally Bittker Eustice, Federal Taxation Shareholders ¶ 2.06 (7th (explaining began authorize creation late 1950's momentum form grew 1970's). 16 Nonetheless, provide guidance. At "servant" Restatement (Second) Agency 2(2) (1957), example, refers person whose "controlled right master." also id., 220(1) ("A servant perform services affairs another respect physical conduct performance other's control"). addition, Restatement's specific lists considered distinguishing servants contractors, first extent control" exercise details other. 220(2)(a). think case. 17 This advocated (EEOC), special enforcement responsibilities threshold issues coverage. "whether control." Amici Curiae 8. According view, "[i]f business, proprietors employees; if control, employees." Ibid. 18 members boards directors, Commission, Compliance Manual §§ 605:0008-605:00010 (2000) (hereinafter Manual).7 question, list taken 323-324 controls means manner worker's performance." 605:0008, 71.8 answering frame acts participates organization, organization's 605:0009. 19 Skidmore Swift Co., 323 134, 140 (1944),9 following employee: "Whether organization can hire fire set rules regulations individual's and, so, what supervises reports someone higher 22 able influence 23 parties expressed written agreements contracts 24 shares profits, losses, liabilities organization." 605:0009.10 25 standard reflects, person, group persons, owns manages enterprise. assign tasks supervise performance, decide profits losses distributed. title such partner, director, vice president—should necessarily he employee proprietor. ibid. ("An ... officer, member shareholder, opposed employee"). existence document styled "employment agreement" lead inexorably either party (looking contracts"). Rather, true applying independent-contractor-versus-employee issue confronted answer "`all incidents factor being decisive.'" 324 NLRB America, 390 254, 258 (1968)). III 26 Some light clinic. For apparently operation clinic, share personally liable malpractice claims. There may, would endorse today.11 reverse judgment remand proceedings opinion. 27 ordered. Notes: Briefs ofamici affirmance American Federation Labor Industrial Organizations Jonathan Hiatt, James Coppess, Laurence Gold; Lawyers' Committee Civil Rights Barbara R. Arnwine, Thomas Henderson, Michael Foreman, Daniel Kohrman, Melvin Radowitz, Vincent Eng, Dennis Hayes, Judith Lichtman; National Lawyers Association Merl H. Wayman Jenifer Bosco. See,e. g., 29 630(b) (setting forth 20-employee Age Discrimination 1967 (ADEA)); 2000e(b) (establishing 15-employee 1964). summarized Oregon's treatment follows: "In Oregon, one, preserves patients, standards profession requires. Or. Rev. 58.185(2). Further, `a shareholder rendering service individual' all claims negligence, wrongful omissions, misconduct committed services. 58.185(3) (emphasis added). licensed jointly severally claims, albeit dollar limitations. 58.185(4)-(9). Ordinary only aspects entity, apart provision 58.185(11). corporation's activities remain requirements license 58.205, merge corporations, 58.196, attendant liabilities—must heart defendant. "Additional organized medicine, none corporations. holders shares, officers except secretary treasurer Oregon-licensed physicians. 58.375(1)(a)-(c). Board Examiners given express authority require director positions, 58.375(1)(d) (e). restrict powers restrictions imposed 58.379. Lastly, 58.375 through 58.389 contain impediments transfer activities." 907-908 (footnote omitted). disagreement Circuits confined particulars Circuit's inEEOC 1177 concerned VII, 793 (1986), involved ADEA. Devine Stone, Leyton Gershman, 100 78 (CA8 1996) (Title case). InReid, 738, ownership copyright statue depended "`prepared scope his employment'" 1976. described hired "`[W]e consider hiring party's product accomplished. Among skill required; source instrumentalities tools; location work; duration parties; additional projects party; discretion long method payment; role paying assistants; regular business; benefits; party.'" 730, 751-752 (1989), citing 220(2) (1958)). These directly applicable drawing line contractors or, alternatively, kind employer. comes play invoke ADA's protections "hiring, advancement, discharge," 12112(a), threshold. 12111(5)(A); asAmici 10-11; Schmidt Ottawa Center, 461 2003). Consequently, reading tend expand enlarging entitled protection reducing exemption. manual applies across statutes. 605:0001 ("This Section discusses coverage, timeliness, charge 1964, (ADEA), (ADA), Pay 1963 (EPA)" omitted)) considers requires high level expertise, furnishes tools, materials, equipment, when, where, worker performs jobId., 605:0008. Government acknowledged, Tr. Oral Arg. 19, controlling—even though "body experience informed judgment" resort guidanceSkidmore 140; Christensen Harris County, 529 576, 587 (holding interpretations contained "policy statements, manuals, guidelines, lack law[,] do warrant Chevron-style deference"). asserts these need treated "exhaustive." 9. agree. every "`shorthand formula magic phrase.'" (1992) indicates director-shareholders receive salaries, 8, comply established 66, report personnel manager,ibid. 28 BREYER joins, dissenting. "There nothing inherently inconsistent coexistence proprietary relationship." Goldberg Whitaker House Cooperative, 366 28, 32 (1961). performing everyday function several respects designation embrace various state Classifying daily caregivers Clackamas' premises, moreover, serves animating Act). Seeing shelter governance ADA, affirm Appeals. 30 An provides, uses word explaining term's scope, ordinarily presume "Congress doctrine." 322-323 (internal quotation marks today selects indicia others enterprise accords overriding significance. Ante, 448. shrink inquiry. 31 Are "servants" here? defines mean agent master controlled (1957) Restatement). When acting doctors, fit definition. behalf name conducted. Ore. Ann. 58.185(1)(a) (1998 Supp.) (shareholders "render specified added)). Clackamas, 71, salaries yearly bonuses, facilities owned leased 29, 71. duties, "compl[y] [the has] established." 66; Restatement, ch. 7, tit. B, Introductory Note, 479 ("[F]ully highly placed less day-to-day human beings. Their sense obligation devote time energies interests enterprise."). physician-shareholders, bears emphasis, invite (ERISA), much "any 1002(6). readily acknowledges ERISA purposes. 6-7. Indeed, gaining qualification prime chose partnership. 7. agrees, workers' compensation ibid., "person[s] furnish remuneration, direction employer," 656.005(30) (1996 Supp.). Finally, electing created separate distinct themselves, afford them limited debts 58.185(4), (5), (10), (11) allow escape choice becomes 33 Nothing about counsels otherwise. observes, businesses fewer Act, "to fail." 447 (quotation 1999)). endorses physician-shareholders' asks "ac[t] participat[e] [are] 449 605:0009 (2000)). might sometimes turn variations structure unrelated magnitude company's capacity complying prescriptions. 34 illustrative. 1996, least full weeks; 1997, 37 weeks. 55-62; 12111(5) (to requisite "for year"). Beyond sold stake become "mere" Yet change arrangements alter operation: circumstances, people site doing 35 Commission's endorses, true, "excludes most practices who, consequence, vulnerable discriminatory prohibited Act." 11; 12111(8), 12112(a) (only protected ADA). dispute demonstrates, determination affects sue far greater practical import Wells Act. character supplies withholding clerical workplace,

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