Eighth Circuit Holds Emergency Room Doc Is Independent Contractor And Cannot Pursue Discrimination Claims

by Ruth Horvatich

Horvatich, Ruth
(402) 341-3070

If an individual worker is an independent contractor, any claims of discrimination will be precluded, as was recently confirmed by the Eighth Circuit. But it is important to make sure the individual is an independent contractor under the law.

In Glascock v. Linn County Emergency Medicine, PC, a female physician of Iranian origin brought claims against the medical center under Title VII and the Iowa Civil Rights Act alleging discrimination on the basis of sex, pregnancy, and national origin. However, the district court found that the physician was not covered by either Title VII or the Iowa statutes because she was an independent contractor. The Eighth Circuit agreed.

In considering whether the physician was an independent contractor or an employee, the Eighth Circuit first considered whether the physician was able to “control the manner and means” by which her work was completed. The court noted that the issue of control is “less useful” in the context of emergency room physicians than in some other settings because a hospital “must assert a degree of conflicting control over every doctor’s work … to discharge its own professional responsibility to patients,” regardless of whether the physician is an employee or an independent contractor. Regardless, the court found that the degree of control in this case was inconclusive. The medical center set the physician’s schedule based on her stated availability and preferences, urged her to attend monthly meetings, and regularly reviewed her performance to ensure compliance with hospital rules and regulations. However, the physician decided which patients to see and conceded that she was “pretty much on [her] own.”

The Eighth Circuit also considered the factors outlined by the U.S. Supreme Court in Nationwide Mutual Ins. Co. v. Darden. These factors include the following: (1) the skill required; (2) the source of the instrumentalities and tools; (3) the location of the work; (4) the duration of the relationship between the parties; (5) whether the hiring party has the right to assign additional projects to the hired party; (6) the extent of the hired party’s discretion over when and how long to work; (7) the method of payment; (8) the hired party’s role in hiring and paying assistants; (9) whether the work is part of the regular business of the hiring party; (10) whether the hiring party is in business; (11) the provision of employee benefits; and (12) the tax treatment of the hired party.

The court found that these factors supported a conclusion that the physician was an independent contractor. She received no benefits from the medical center and paid her own self-employment taxes. She was licensed at her own expense and had been certified by professional associations, which was a factor that the court stated “weighs heavily in favor of independent contractor status.” The medical center also had no right to assign her additional projects, and she blocked out shifts, specified her preferred work schedule, and traded or gave away shifts without informing the medical center. The court additionally found that the economic realities and terms of her agreement also indicated that she was an independent contractor. The court specifically noted that her agreement lacked any leave or vacation policy, could be terminated at will by either party, and was titled an “Independent Contractor Physician Service Agreement.”

Although other factors may have favored employee status, the court found that they were fewer in number and less in weight than those favoring independent contractor status. These included the fact that although the independent contractor agreement set the “duration of the relationship,” the physician testified that she expected to have a long-term relationship with the medical center and the facts that she received an hourly wage directly from the medical center, and the medical center was in the business of providing contract emergency room physicians to medical centers. The court found that the other factors relating to “source of instrumentalities and tools,” “location of work,” and “the hired party’s role in hiring and paying assistants,” were inapplicable because a third party provided all three.

What does this mean to employers? This is a reminder of the importance of the status of individuals who provide services to your organization. The employer in the above-referenced case was shielded from the physician’s claims of discrimination because of the physician’s status as an independent contractor. This status could also have ramifications in relation to tax laws, workers compensation laws, and wage payment laws. As highlighted by the above case, it is important to note that entering into a contract titled “independent contractor agreement” is helpful, but not sufficient by itself, and not necessarily decisive on the question of whether an individual is, in fact, an independent contractor. It would be beneficial to review independent contractor agreements and go through each of the above factors to assess the likelihood of establishing independent contractor status.

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