(The Return of) Ignatz, by Sam Heldman

Saturday, February 22, 2003

S.Ct. predictions
Trudging on through the Supreme Court predictions, despite my fear that nobody's interested and that every one of my predictions for the coming week may well be wrong ...

The second case for Tues 2/25, Clackamas Gastroenterology v. Wells, is about what employers are covered by the Americans with Disabilities Act. Like many federal employment laws, the ADA covers only employers that are at least of a certain size, as defined by the number of "employees". The question here is whether the doctors in this practice group are to be counted among the "employees"; if they are counted, then the employer is big enough to be bound by the ADA. The docs say "we're not really employees of this entity; we are the bosses/owners, and are really like partners (and partners aren't employees, in the eyes of the law)." The Ninth Circuit held (pdf) "yes, you are employees. You can't be 'partners' because you formed your business entity as a corporation, not a partnership. And everybody who works for a corporation is an employee." As the Ninth Circuit recognized, there is a split in the Circuits on this point, with the Seventh Circuit saying that shareholders of a professional corporation (almost always, this means medical practice groups and lawfirms) are to be treated as partners for this purpose even though the entity's not really a partnership. And the Solicitor General tries to stake out a middle ground (pdf), saying in essence that some shareholders in professional corporations are employees and some aren't, and that it really depends on the extent of control they have over the business.

The SG's position, apparently also adopted by the EEOC, would make an arguably-plausible middle ground as a matter of public policy, if the Congress decided to write the statute that way: it might have the pro-employer effect of making some smallish lawfirms and some physicians' groups exempt from the ADA and other federal laws, but on the other hand it would (if also applied on the flip side) offer some protection to low-level "partners" at lawfirms who don't really have any real management control, by treating them as employees who are protected by the federal employment laws. I don't think that this position, however, makes sense as an interpretation of the statute's language in light of traditional understandings of what "employee" means in the corporate context, and in light of the Court's preference for easy-to-follow rules about the coverage of the anti-discrimination statutes (so as to avoid lots of litigation about which employers are covered and which are not). Hard to call, but I'm going to say AFFIRM because I think that the Court will go for simplicity and a traditional interpretation of the word "employee".

posted by sam 6:46 AM 0 comments


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