Most employers are acutely aware of the increased focus by various governmental agencies on the issue of whether a worker is an independent contractor or an employee. A recent case out of the U.S. District Court, Western District of New York, may be a concern for hospitals and other employers of professional level “independent contractors.”
Physicians who are granted staff privileges at hospitals have historically and routinely been considered independent contractors due to the exercise of their professional judgment. However, in Salamon v. Our Lady of Victory Hospital, decided on April 3, 2012, the court would not simply defer to that history. In that case, a physician with staff privileges filed a complaint alleging sexual harassment, discrimination and other state law claims. The hospital moved for summary judgment asserting that Title VII, which prohibits sexual harassment and discrimination on enumerated criteria, only applies to employees, and that the plaintiff was an independent contractor.
The court found that, based upon the degree of control exercised over the physician’s practice, it was up to a jury to determine if the physician was an employee of the hospital and therefore protected by Title VII. In deciding to let the jury decide the issue, the court noted that the hospital appeared to control the manner and means by which the physician completed her tasks. Of particular concern was the peer review process. The physician asserted that the hospital did not simply review the quality of her patient outcomes, but mandated performance of certain procedures, the timing of others, directing which medications she should prescribe and recommending changes to her practice based on their financial impact to the gastroenterology department. The hospital’s review of the physician’s practice resulted in a detailed re-education and mentoring program requiring the physician to be re-trained to perform services at the hospital in a particular manner. This close supervision by the hospital made the doctor appear more like an employee, rather than an independent contractor.
Employers would be prudent to remember that it is the individual facts of a particular case that are important in any independent contractor analysis.