If an individual is found to be an independent contractor under Title VII of the Civil Rights Act of 1964, that individual cannot sue for discrimination under that law because they are not an employee. Only employees can claim legal protection under Title VII. A surgeon recently discovered this legal reality when she sued the hospital for discrimination. She sued because the hospital revoked her medical practice privileges. She claimed to be an employee (and not an independent contractor), and therefore sued the hospital as her employer under Title VII on the basis of her sex, religion and ethnicity.

U.S. DISTRICT COURT RULED THE SURGEON WAS AN INDEPENDENT CONTRACTOR: The U.S. District Court for the Northern District of Illinois granted summary judgement in favor of the hospital because that Court found the surgeon was an independent contractor physician-not an employee of the hospital.

SURGEON APPEALED TO U.S. COURT OF APPEALS FOR THE SEVENTH CIRCUIT: The surgeon then appealed to the U.S. Court of Appeals for the Seventh Circuit. The surgeon argued that she should be classified as an employee of the hospital (and therefore she was entitled to have legal protection under Title VII). She pointed out that she was subject to “peer review” by other doctors so she was surely an employee. The U.S. Court of Appeals for the Seventh Circuit did not agree with the surgeon; the Court found her to be an independent contractor-not an employee of the hospital. Levitin v. Northwest Community Hospital, No. 16-3774 (7^th Cir. May 8, 2019)

FACTS PROVING INDEPENDENT CONTRACTOR STATUS: The U.S. Court of Appeals for the Seventh Circuit ruled that the surgeon was self-employed (and an independent contractor-not an employee of the hospital) because she owned her own medical practice, billed her patients directly, filed her taxes as a self-employed physician, did not receive any traditional employee benefits from the hospital, paid her own professional licensing dues, set her own schedule and hours, could obtain medical practice privileges at other hospitals, and could use her own medical staff in surgeries.

COMPLIANCE WITH REGULATORY & STATUTORY REQUIREMENTS DOES NOT ESTABLISH CONTROL: The U.S. Court of Appeals for the Seventh Circuit noted that compliance with regulatory or statutory requirements does not by itself establish control by the hospital over the surgeon for purposes of Title VII of the Civil Rights Act of 1964. In other words, the kind of control and direction that an employer would exercise over an employee is not the same kind of control that involves mere compliance by the hospital with regulatory or statutory requirements.

To discuss your potential liability in using independent contractors (as well as strategies for reducing your liability in using independent contractors), please contact Attorney Nancy Joerg at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com. Nancy Joerg can also help you modify your independent contractor agreement and website, as well as defend you in audits and investigations.