RAYMOND B. YATES, M. D., P. C. PROFIT SHARING PLAN, et al. v. HENDON, TRUSTEE

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CASES ADJUDGED
IN THE
SUPREME COURT OF THE UNITED STATES
AT
OCTOBER TERM, 2003
RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN, et al. v. HENDON, TRUSTEE
certiorari to the united states court of appeals for
the sixth circuit
No. 02–458. Argued January 13, 2004—Decided March 2, 2004
Enacted “to protect . . . the interests of participants in employee benefit
plans and their beneficiaries,” 29 U. S. C. § 1001(b), the Employee Retire-
ment Income Security Act of 1974 (ERISA) comprises four titles. Rele-
vant here, Title I, 29 U. S. C. § 1001 et seq., mandates minimum participa-
tion, vesting, and funding schedules for covered pension plans, and
establishes fiduciary conduct standards for plan administrators. Title
II, codified in 26 U. S. C., amended various Internal Revenue Code
(IRC) provisions pertaining to qualification of pension plans for special
tax treatment, in order, inter alia, to conform to Title I’s standards.
Title III, 29 U. S. C. § 1201 et seq., contains provisions designed to coor-
dinate enforcement efforts of different federal departments. Title IV,
29 U. S. C. § 1301 et seq., created the Pension Benefit Guaranty Corpora-
tion and an insurance program to protect employees against the loss
of “nonforfeitable” benefits upon termination of pension plans lacking
sufficient funds to pay benefits in full. This case concerns Title I’s
definition and coverage provisions, though those provisions, indicating
who may participate in an ERISA-sheltered plan, inform each of
ERISA’s four titles. Title I defines “employee benefit plan” as “an em-
ployee welfare benefit plan or an employee pension benefit plan or . . .
both,” § 1002(3); “participant” to encompass “any employee . . . eligible
to receive a benefit . . . from an employee benefit plan,” § 1002(7); “em-
ployee” as “any individual employed by an employer,” § 1002(6); and
1

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2 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Syllabus
“employer” to include “any person acting . . . as an employer, or . . . in
the interest of an employer,” § 1002(5).
Yates was sole shareholder and president of a professional corporation
that maintained a profit sharing plan (Plan). From the Plan’s inception,
at least one person other than Yates or his wife was a Plan participant.
The Plan qualified for favorable tax treatment under IRC § 401. As
required by the IRC, 26 U. S. C. § 401(a)(13), and ERISA, 29 U. S. C.
§ 1056(d), the Plan contained an antialienation provision. Entitled
“Spendthrift Clause,” the provision stated, in relevant part: “Except for
. . . loans to Participants as [expressly provided for in the Plan], no
benefit or interest available hereunder will be subject to assignment or
alienation.” In December 1989, Yates borrowed $20,000 from another
of his corporation’s pension plans (which later merged into the Plan),
but failed to make any of the required monthly payments. In Novem-
ber 1996, however, Yates paid off the loan in full with the proceeds
of the sale of his house. Three weeks later, Yates’s creditors filed an
involuntary petition against him under Chapter 7 of the Bankruptcy
Code. Respondent Hendon, the Bankruptcy Trustee, filed a complaint
against petitioners (the Plan and Yates, as Plan trustee), asking the
Bankruptcy Court to avoid the loan repayment. Granting Hendon sum-
mary judgment, the Bankruptcy Court first determined that the repay-
ment qualified as a preferential transfer under 11 U. S. C. § 547(b).
That finding was not challenged on appeal. The Bankruptcy Court
then held that the Plan and Yates, as Plan trustee, could not rely on the
Plan’s antialienation provision to prevent Hendon from recovering the
loan repayment for the bankruptcy estate. That holding was dictated
by Sixth Circuit precedent, under which a self-employed owner of a
pension plan’s corporate sponsor could not “participate” as an “em-
ployee” under ERISA and therefore could not use ERISA’s provisions
to enforce the restriction on transfer of his beneficial interest in the
plan. The District Court and the Sixth Circuit affirmed on the same
ground. The Sixth Circuit’s determination that Yates was not a “partic-
ipant” in the Plan for ERISA purposes obviated the question whether,
had Yates qualified as such a participant, his loan repayment would have
been shielded from the Bankruptcy Trustee’s reach.
Held: The working owner of a business (here, the sole shareholder and
president of a professional corporation) may qualify as a “participant”
in a pension plan covered by ERISA. If the plan covers one or more
employees other than the business owner and his or her spouse, the
working owner may participate on equal terms with other plan partici-
pants. Such a working owner, in common with other employees, quali-

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3 Cite as: 541 U. S. 1 (2004)
Syllabus
fies for the protections ERISA affords plan participants and is governed
by the rights and remedies ERISA specifies. Pp. 12–24.
(a) Congress intended working owners to qualify as plan participants.
Because ERISA’s definitions of “employee” and, in turn, “participant”
are uninformative, the Court looks to other ERISA provisions for in-
struction. See Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 323.
ERISA’s multiple textual indications that Congress intended working
owners to qualify as plan participants provide, in combination, “specific
guidance,” ibid., so there is no cause in this case to resort to common
law. ERISA’s enactment in 1974 did not change the existing backdrop
of IRC provisions permitting corporate shareholders, partners, and sole
proprietors to participate in tax-qualified pension plans. Rather, Con-
gress’ objective was to harmonize ERISA with these longstanding tax
provisions. Title I of ERISA and related IRC provisions expressly
contemplate the participation of working owners in covered benefit
plans. Most notably, Title I frees certain plans in which working own-
ers likely participate from all of ERISA’s fiduciary responsibility re-
quirements. See 29 U. S. C. § 1101(a) and 26 U. S. C. §§ 414(q)(1)(A) and
416(i)(1)(B)(i). Title I also contains more limited exemptions from
ERISA’s fiduciary responsibility requirements for plans that ordinarily
include working owners as participants. See 29 U. S. C. §§ 1103(a) and
(b)(3)(A) and 26 U. S. C. §§ 401(c)(1) and (2)(A)(i), 1402(a) and (c). Fur-
ther, Title I contains exemptions from ERISA’s prohibited transaction
exemptions, which, like the fiduciary responsibility exemptions, indicate
that working owners may participate in ERISA-qualified plans. See 29
U. S. C. §§ 1108(b)(1)(B) and (d)(1) and 26 U. S. C. § 401(c)(3). Exemp-
tions of this order would be unnecessary if working owners could not
qualify as participants in ERISA-protected plans in the first place.
Provisions of Title IV of ERISA are corroborative. For example, Title
IV does not apply to plans “established and maintained exclusively for
substantial owners,” 29 U. S. C. § 1321(b)(9) (emphasis added), a category
that includes sole proprietors and shareholders and partners with a ten
percent or greater ownership interest, § 1322(b)(5)(A). But Title IV
does cover plans in which substantial owners participate along with
other employees. See § 1322(b)(5)(B). Particularly instructive, Title
IV and the IRC, as amended by Title II, clarify a key point missed by
several lower courts: Under ERISA, a working owner may wear two
hats, i. e., he can be an employee entitled to participate in a plan and, at
the same time, the employer who established the plan. See § 1301(b)(1)
and 26 U. S. C. § 401(c)(4). Congress’ aim to promote and facilitate em-
ployee benefit plans is advanced by the Court’s reading of ERISA’s text.
The working employer’s opportunity personally to participate and gain
ERISA coverage serves as an incentive to the creation of plans that will

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4 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Syllabus
benefit employer and nonowner employees alike. Treating the working
owner as a participant in an ERISA-sheltered plan also avoids the
anomaly that the same plan will be controlled by discrete regimes:
federal-law governance for the nonowner employees; state-law gover-
nance for the working owner. Excepting working owners from
ERISA’s coverage is hardly consistent with the statutory goal of “uni-
form national treatment of pension benefits,” Patterson v. Shumate, 504
U. S. 753, 765, and would generate administrative difficulties. A 1999
Department of Labor advisory opinion (hereinafter Advisory Opinion
99–04A) accords with the Court’s comprehension of Title I’s definition
and coverage provisions. Concluding that working owners may qualify
as participants in ERISA-protected plans, the Department’s opinion re-
flects a “body of experience and informed judgment to which courts and
litigants may properly resort for guidance.” Skidmore v. Swift & Co.,
323 U. S. 134, 140. Pp. 12–18.
(b) This Court rejects the lower courts’ position that a working owner
may rank only as an “employer” and not also as an “employee” for pur-
poses of ERISA-sheltered plan participation. The Sixth Circuit’s lead-
ing decision in point relied, in large part, on an incorrect reading of a
portion of a Department of Labor regulation, 29 CFR § 2510.3–3, which
states: “[T]he term ‘employee benefit plan’ [as used in Title I] shall not
include any plan . . . under which no employees are participants”; “[f]or
purposes of this section,” “[a]n individual and his or her spouse shall
not be deemed to be employees with respect to a . . . business” they
own. (Emphasis added.) In common with other Courts of Appeals
that have held working owners do not qualify as participants in ERISA-
governed plans, the Sixth Circuit apparently understood the regulation
to provide a generally applicable definition of “employee,” controlling
for all Title I purposes. The Labor Department’s Advisory Opinion 99–
04A, however, interprets the regulation to mean that the statutory term
“employee benefit plan” does not include a plan whose only participants
are the owner and his or her spouse, but does include a plan that covers
as participants one or more common-law employees, in addition to the
self-employed individuals. This agency view, overlooked by the Sixth
Circuit, merits the Judiciary’s respectful consideration. Cf. Clackamas
Gastroenterology Associates, P. C. v. Wells, 538 U. S. 440, 448–449.
Moreover, the Department’s regulation itself reveals the definitional
prescription’s limited scope. The prescription describes “employees”
only “[f]or purposes of this section,” i. e., the section defining “employee
benefit plans.” 29 CFR § 2510.3–3. Accordingly, the regulation ad-
dresses only what plans qualify as “employee benefit plans” under
ERISA’s Title I. Plans that cover only sole owners or partners and
their spouses, the regulation instructs, fall outside Title I’s domain,

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5 Cite as: 541 U. S. 1 (2004)
Syllabus
while plans that cover working owners and their nonowner employees
fall entirely within ERISA’s compass. The Sixth Circuit’s leading deci-
sion also mistakenly relied on ERISA’s “anti-inurement” provision, 29
U. S. C. § 1103(c)(1), which states that plan assets shall not inure to the
benefit of employers. Correctly read, that provision does not preclude
Title I coverage of working owners as plan participants. It demands
only that plan assets be held to supply benefits to plan participants.
Its purpose is to apply the law of trusts to discourage abuses such as
self-dealing, imprudent investment, and misappropriation of plan assets,
by employers and others. Those concerns are not implicated by paying
benefits to working owners who participate on an equal basis with non-
owner employees in ERISA-protected plans. This Court expresses no
opinion as to whether Yates himself, in his handling of loan repayments,
engaged in conduct inconsistent with the anti-inurement provision, an
issue not yet reached by the courts below. Pp. 18–23.
(c) Given the undisputed fact that Yates failed to honor his loan’s peri-
odic repayment requirements, these questions should be addressed on
remand: (1) Did the November 1996 close-to-bankruptcy repayments,
despite the prior defaults, become a portion of Yates’s interest in the
Plan that is excluded from his bankruptcy estate and (2) if so, were the
repayments beyond the reach of the Bankruptcy Trustee’s power to
avoid and recover preferential transfers? P. 24.
287 F. 3d 521, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and Stevens, O’Connor, Kennedy, Souter, and Breyer, JJ.,
joined. Scalia, J., post, p. 24, and Thomas, J., post, p. 25, each filed an
opinion concurring in the judgment.
James A. Holifield, Jr., argued the cause and filed briefs
for petitioners.
Matthew D. Roberts argued the cause for the United
States as amicus curiae urging reversal. With him on the
brief were Solicitor General Olson, Deputy Solicitor Gen-
eral Kneedler, Howard M. Radzely, Allen H. Feldman, Na-
thaniel I. Spiller, and Ellen L. Beard.
C. Mark Troutman argued the cause for respondent.
With him on the brief was John A. Walker, Jr.*
*Mark E. Schmidtke and William J. Kayatta, Jr., filed a brief for
UNUMProvident Corporation as amicus curiae urging reversal.

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6 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
Justice Ginsburg delivered the opinion of the Court.
This case presents a question on which federal courts have
divided: Does the working owner of a business (here, the
sole shareholder and president of a professional corporation)
qualify as a “participant” in a pension plan covered by the
Employee Retirement Income Security Act of 1974 (ERISA
or Act), 88 Stat. 832, as amended, 29 U. S. C. § 1001 et seq.
The answer, we hold, is yes: If the plan covers one or more
employees other than the business owner and his or her
spouse, the working owner may participate on equal terms
with other plan participants. Such a working owner, in
common with other employees, qualifies for the protections
ERISA affords plan participants and is governed by the
rights and remedies ERISA specifies. In so ruling, we re-
ject the position, taken by the lower courts in this case, that
a business owner may rank only as an “employer” and not
also as an “employee” for purposes of ERISA-sheltered
plan participation.
I
A
Enacted “to protect . . . the interests of participants in
employee benefit plans and their beneficiaries,” 29 U. S. C.
§ 1001(b), ERISA comprises four titles. Title I, 29 U. S. C.
§ 1001 et seq., “requires administrators of all covered pension
plans to file periodic reports with the Secretary of Labor,
mandates minimum participation, vesting and funding sched-
ules, establishes standards of fiduciary conduct for plan ad-
ministrators, and provides for civil and criminal enforcement
of the Act.” Nachman Corp. v. Pension Benefit Guaranty
Corporation, 446 U. S. 359, 361, n. 1 (1980). Title II, codified
in various parts of Title 26 of the United States Code,
“amended various [Internal Revenue Code] provisions . . .
pertaining to qualification of pension plans for special tax
treatment, in order, among other things, to conform to the
standards set forth in Title I.” 446 U. S., at 361, n. 1. Title

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7 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
III, 29 U. S. C. § 1201 et seq., “contains provisions designed
to coordinate enforcement efforts of different federal depart-
ments, and provides for further study of [benefit plans].”
446 U. S., at 361, n. 1. Title IV, 29 U. S. C. § 1301 et seq.,
“created the Pension Benefit Guaranty Corporation (PBGC)
and a termination insurance program to protect employees
against the loss of ‘nonforfeitable’ benefits upon termination
of pension plans that lack sufficient funds to pay such benefits
in full.” 446 U. S., at 361–362, n. 1. See also Mead Corp. v.
Tilley, 490 U. S. 714, 717 (1989); Brief for United States as
Amicus Curiae 2.
This case concerns the definition and coverage provisions
of Title I, though those provisions, indicating who may par-
ticipate in an ERISA-sheltered plan, inform each of ERISA’s
four titles. Title I defines the term “employee benefit plan”
to encompass “an employee welfare benefit plan or an em-
ployee pension benefit plan or a plan which is both . . . .” 29
U. S. C. § 1002(3). The same omnibus section defines “par-
ticipant” as “any employee or former employee of an em-
ployer, . . . who is or may become eligible to receive a benefit
of any type from an employee benefit plan which covers em-
ployees of such employer . . . , or whose beneficiaries may
be eligible to receive any such benefit.” § 1002(7). “Em-
ployee,” under Title I’s definition section, means “any indi-
vidual employed by an employer,” § 1002(6), and “employer”
includes “any person acting directly as an employer, or in-
directly in the interest of an employer, in relation to an
employee benefit plan,” § 1002(5).
B
Dr. Raymond B. Yates was the sole shareholder and presi-
dent of Raymond B. Yates, M. D., P. C., a professional corpo-
ration. 287 F. 3d 521, 524 (CA6 2002); App. to Pet. for Cert.
10a. The corporation maintained the Raymond B. Yates,
M. D., P. C. Profit Sharing Plan (Profit Sharing Plan or Plan),
for which Yates was the administrator and trustee. Ibid.

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8 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
From the Profit Sharing Plan’s inception, at least one person
other than Yates or his wife was a participant. Ibid.; App.
269a. The Profit Sharing Plan qualified for favorable tax
treatment under § 401 of the Internal Revenue Code (IRC).
287 F. 3d, at 524; App. 71a–73a. As required by both the
IRC, 26 U. S. C. § 401(a)(13), and Title I of ERISA, 29 U. S. C.
§ 1056(d), the Plan contained an antialienation provision.
That provision, entitled “Spendthrift Clause,” stated in rele-
vant part: “Except for . . . loans to Participants as [expressly
provided for in the Plan], no benefit or interest available
hereunder will be subject to assignment or alienation, either
voluntarily or involuntarily.” App. 252a.
In December 1989, Yates borrowed $20,000 at 11 percent
interest from the Raymond B. Yates, M. D., P. C. Money Pur-
chase Pension Plan (Money Purchase Pension Plan), which
later merged into the Profit Sharing Plan. Id., at 268a–269a.
The terms of the loan agreement required Yates to make
monthly payments of $433.85 over the five-year period of the
loan. Id., at 269a. Yates failed to make any monthly pay-
ment. 287 F. 3d, at 524. In June 1992, coinciding with the
Money Purchase Pension Plan-Profit Sharing Plan merger,
Yates renewed the loan for five years. App. 269a. Again,
he made no monthly payments. In fact, Yates repaid noth-
ing until November 1996. 287 F. 3d, at 524. That month,
he used the proceeds from the sale of his house to make
two payments totaling $50,467.46, which paid off in full the
principal and interest due on the loan. Ibid. Yates main-
tained that, after the repayment, his interest in the Profit
Sharing Plan amounted to about $87,000. App. to Pet. for
Cert. 39a.
Three weeks after Yates repaid the loan to the Profit Shar-
ing Plan, on December 2, 1996, Yates’s creditors filed an
involuntary petition against him under Chapter 7 of the
Bankruptcy Code. Id., at 12a; accord App. 300a. In Au-
gust 1998, respondent William T. Hendon, the Bankruptcy
Trustee, filed a complaint, pursuant to 11 U. S. C. §§ 547(b)

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9 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
and 550, against petitioners Profit Sharing Plan and Yates,
in his capacity as the Plan’s trustee. App. 1a–3a. Hendon
asked the Bankruptcy Court to “avoi[d] the . . . preferential
transfer by [Yates] to [the Profit Sharing Plan] in the amount
of $50,467.46 and [to] orde[r] [the Plan and Yates, as trustee,]
to pay over to the [bankruptcy] trustee the sum of $50,467.46,
plus legal interest . . . , together with costs . . . .” Id., at 3a.
On cross-motions for summary judgment, the Bankruptcy
Court ruled for Trustee Hendon. App. to Pet. for Cert.
36a–50a.
The Bankruptcy Court first determined that the loan re-
payment qualified as a preferential transfer under 11 U. S. C.
§ 547(b). 1 App. to Pet. for Cert. 41a–42a. That finding was
not challenged on appeal. The Bankruptcy Court then held
that the Profit Sharing Plan and Yates, as trustee, could not
rely on the Plan’s antialienation provision to prevent Hendon
from recovering the loan repayment. As “a self-employed
1 Section 547(b) provides:
“Except as provided in subsection (c) of this section, the trustee may
avoid any transfer of an interest of the debtor in property—
“(1) to or for the benefit of a creditor;
“(2) for or on account of an antecedent debt owed by the debtor before
such transfer was made;
“(3) made while the debtor was insolvent;
“(4) made—
“(A) on or within 90 days before the date of the filing of the petition; or
“(B) between ninety days and one year before the date of the filing of
the petition, if such creditor at the time of such transfer was an insider;
and
“(5) that enables such creditor to receive more than such creditor would
receive if—
“(A) the case were a case under chapter 7 of this title;
“(B) the transfer had not been made; and
“(C) such creditor received payment of such debt to the extent provided
by the provisions of this title.”
This provision permits the bankruptcy trustee to avoid certain transfers
of “property that would have been part of the [bankruptcy] estate had it
not been transferred before the commencement of bankruptcy proceed-
ings.” Begier v. IRS, 496 U. S. 53, 58 (1990).

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10 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
owner of the professional corporation that sponsor[ed] the
pension plan,” the Bankruptcy Court stated, Yates could not
“participate as an employee under ERISA and . . . [therefore
could not] use its provisions to enforce the restriction on the
transfer of his beneficial interest in the Defendant Plan.”
Id., at 43a–44a. In so ruling, the Bankruptcy Court relied
on Circuit precedent, including SEC v. Johnston, 143 F. 3d
260 (CA6 1998), and Fugarino v. Hartford Life & Accident
Ins. Co., 969 F. 2d 178 (CA6 1992).
The District Court affirmed the Bankruptcy Court’s judg-
ment. App. to Pet. for Cert. 9a–35a. Acknowledging that
other Courts of Appeals had reached a different conclusion,
id., at 19a, the District Court observed that it was bound by
Sixth Circuit precedent. According to the controlling Sixth
Circuit decisions, neither a sole proprietor, Fugarino, 969
F. 2d, at 186, nor a sole owner of a corporation, Agrawal v.
Paul Revere Life Ins. Co., 205 F. 3d 297, 302 (2000), qualifies
as a “participant” in an ERISA-sheltered employee benefit
plan. App. to Pet. for Cert. 20a–21a. Applying Circuit
precedent, the District Court concluded:
“The fact Dr. Yates was not qualified to participate in
an ERISA protected plan means none of the money he
contributed to the Plan as an ‘employee’ was ever a part
of an ERISA plan. The $50,467.46 he returned to the
Plan was not protected by ERISA, because none of the
money he had in the Plan was protected by ERISA.”
Id., at 20a.
The Sixth Circuit affirmed the District Court’s judgment.
287 F. 3d 521. The Court of Appeals adhered to its “pub-
lished caselaw [holding] that ‘a sole proprietor or sole share-
holder of a business must be considered an employer and not
an employee . . . for purposes of ERISA.’ ” Id., at 525 (quot-
ing Fugarino, 969 F. 2d, at 186). “[T]he spendthrift clause
in the Yates profit sharing/pension plan,” the appeals court
accordingly ruled, “[was] not enforceable by Dr. Yates under

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11 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
ERISA.” 287 F. 3d, at 526. The Sixth Circuit’s determina-
tion that Yates was not a “participant” in the Profit Sharing
Plan for ERISA purposes obviated the question whether,
had Yates qualified as such a participant, his loan repayment
would have been shielded from the Bankruptcy Trustee’s
reach. See App. to Pet. for Cert. 46a–47a.
We granted certiorari, 539 U. S. 957 (2003), in view of
the division of opinion among the Circuits on the question
whether a working owner may qualify as a participant in an
employee benefit plan covered by ERISA. Compare Agra-
wal, 205 F. 3d, at 302 (sole shareholder is not a participant
in an ERISA-qualified plan); Fugarino, 969 F. 2d, at 186 (sole
proprietor is not a participant); Kwatcher v. Massachusetts
Serv. Employees Pension Fund, 879 F. 2d 957, 963 (CA1
1989) (sole shareholder is not a participant); Giardono v.
Jones, 867 F. 2d 409, 411–412 (CA7 1989) (sole proprietor is
not a participant); Peckham v. Board of Trustees of Int’l
Brotherhood of Painters and Allied Trades Union, 653 F. 2d
424, 427–428 (CA10 1981) (sole proprietor is not a par-
ticipant), with Vega v. National Life Ins. Servs., Inc., 188
F. 3d 287, 294 (CA5 1999) (co-owner is a participant); In re
Baker, 114 F. 3d 636, 639 (CA7 1997) (majority shareholder
is a participant); Madonia v. Blue Cross & Blue Shield of
Virginia, 11 F. 3d 444, 450 (CA4 1993) (sole shareholder is
a participant).2
2 The Courts of Appeals are also divided on whether working owners
may qualify as “beneficiaries” of ERISA-sheltered employee benefit plans.
Compare 287 F. 3d 521, 525 (CA6 2002) (case below) (sole shareholder is
not a beneficiary of an ERISA-qualified plan); Agrawal, 205 F. 3d, at 302
(sole shareholder is not a beneficiary), with Gilbert v. Alta Health & Life
Ins. Co., 276 F. 3d 1292, 1302 (CA11 2001) (sole shareholder is a benefi-
ciary); Wolk v. UNUM Life Ins. of Am., 186 F. 3d 352, 356 (CA3 1999)
(partner is a beneficiary); Prudential Ins. Co. of Am. v. Doe, 76 F. 3d
206, 208 (CA8 1996) (controlling shareholder is a beneficiary); Robinson v.
Linomaz, 58 F. 3d 365, 370 (CA8 1995) (co-owners are beneficiaries); Pe-
terson v. American Life & Health Ins. Co., 48 F. 3d 404, 409 (CA9 1995)
(partner is a beneficiary). The United States, as amicus curiae, urges

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12 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
II
A
ERISA’s definitions of “employee,” and, in turn, “partici-
pant,” are uninformative. See Nationwide Mut. Ins. Co. v.
Darden, 503 U. S. 318, 323 (1992) (“ERISA’s nominal defini-
tion of ‘employee’ as ‘any individual employed by an em-
ployer’ is completely circular and explains nothing.” (citation
omitted)). We therefore look to other provisions of the Act
for instruction. See ibid. ERISA’s text contains multiple
indications that Congress intended working owners to qual-
ify as plan participants. Because these indications combine
to provide “specific guidance,” ibid., there is no cause in this
case to resort to common law.3
Congress enacted ERISA against a backdrop of IRC pro-
visions that permitted corporate shareholders, partners, and
sole proprietors to participate in tax-qualified pension plans.
Brief for United States as Amicus Curiae 19–20. Working
shareholders have been eligible to participate in such plans
since 1942. See Revenue Act of 1942, ch. 619, § 165(a)(4), 56
Stat. 862 (a pension plan shall be tax exempt if, inter alia,
“the contributions or benefits provided under the plan do not
discriminate in favor of employees who are officers, share-
holders, persons whose principal duties consist in super-
vising the work of other employees, or highly compensated
that treating working owners as “beneficiaries” of an ERISA-qualified
plan is not an acceptable solution. Brief for United States as Amicus
Curiae 9 (The beneficiary approach “has no logical stopping point, because
it would allow a plan to cover anyone it chooses, including independent
contractors excluded by [Nationwide Mut. Ins. Co. v. Darden, 503 U. S.
318 (1992)]” and “fails to resolve participation questions for pension plans
which, unlike welfare plans, tie coverage directly to service as an em-
ployee.”); id., at 24–25. This issue is not presented here, and we do not
resolve it.
3 Cf. Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318 (1992), and
Clackamas Gastroenterology Associates, P. C. v. Wells, 538 U. S. 440
(2003) (finding textual clues absent, Court looked to common law for
guidance).

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employees”). Two decades later, still prior to ERISA’s
adoption, Congress permitted partners and sole proprietors
to establish tax-favored pension plans, commonly known as
“H. R. 10” or “Keogh” plans. Self-Employed Individuals
Tax Retirement Act of 1962, 76 Stat. 809; Brief for United
States as Amicus Curiae 19. Thus, by 1962, working own-
ers of all kinds could contribute to tax-qualified retirement
plans.
ERISA’s enactment in 1974 did not change that situation.4
Rather, Congress’ objective was to harmonize ERISA with
longstanding tax provisions. Title I of ERISA and related
IRC provisions expressly contemplate the participation of
working owners in covered benefit plans. Id., at 14–16.
Most notably, several Title I provisions partially exempt cer-
tain plans in which working owners likely participate from
otherwise mandatory ERISA provisions. Exemptions of
this order would be unnecessary if working owners could
not qualify as participants in ERISA-protected plans in the
first place.
To illustrate, Title I frees the following plans from the
Act’s fiduciary responsibility requirements:
“(1) a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing de-
ferred compensation for a select group of management
or highly compensated employees; or
“(2) any agreement described in section 736 of [the
IRC], which provides payments to a retired partner or
deceased partner or a deceased partner’s successor in
interest.” 29 U. S. C. § 1101(a).
The IRC defines the term “highly compensated employee”
to include “any employee who . . . was a 5-percent owner at
any time during the year or the preceding year.” 26 U. S. C.
4 A particular employee benefit plan may be covered by one title of
ERISA, but not by another. See Brief for United States as Amicus Cu-
riae 18, n. 9.

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14 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
§ 414(q)(1)(A). A “5-percent owner,” the IRC further speci-
fies, is “any person who owns . . . more than 5 percent of the
outstanding stock of the corporation or stock possessing
more than 5 percent of the total combined voting power of
all stock of the corporation” if the employer is a corporation,
or “any person who owns more than 5 percent of the capital
or profits interest in the employer” if the employer is not
a corporation. § 416(i)(1)(B)(i). Under these definitions,
some working owners would fit the description “highly com-
pensated employees.” Similarly, agreements that make
payments to retired partners, or to deceased partners’ suc-
cessors in interest, surely involve plans in which working
partners participate.
Title I also contains more limited exemptions from
ERISA’s fiduciary responsibility requirements. These ex-
emptions, too, cover plans that ordinarily include working
owners as participants. To illustrate, assets of an employee
benefit plan typically must be held in trust. See 29 U. S. C.
§ 1103(a). That requirement, however, does not apply, inter
alia, “to a plan . . . some or all of the participants of which
are employees described in section 401(c)(1) of [the IRC].”
§ 1103(b)(3)(A). IRC § 401(c)(1)(A) defines an “employee” to
include “a self-employed individual”; and IRC §§ 401(c)(1)(B)
and (2)(A)(i), in turn, define “a self-employed individual” to
cover an individual with “earned income” from “a trade or
business in which personal services of the taxpayer are a
material income-producing factor.” This definition no doubt
encompasses working sole proprietors and partners. 26
U. S. C. §§ 1402(a) and (c).
Title I also contains exemptions from ERISA’s prohibited
transaction provisions. Like the fiduciary responsibility ex-
emptions, these exemptions indicate that working owners
may participate in ERISA-qualified plans. For example, al-
though Title I generally bars transactions between a plan
and a party in interest, 29 U. S. C. § 1106, the Act permits,
among other exceptions, loans to plan participants if certain

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15 Cite as: 541 U. S. 1 (2004)
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conditions are satisfied, § 1108(b)(1). One condition is that
loans must not be “made available to highly compensated
employees . . . in an amount greater than the amount made
available to other employees.” § 1108(b)(1)(B). As just ob-
served, see supra, at 13–14, some working owners, including
shareholder-employees, qualify as “highly compensated em-
ployees.” Title I goes on to exclude “owner-employees,” as
defined in the IRC, from the participant loan exemption.
§ 1108(d)(1). Under the IRC’s definition, owner-employees
include partners “who ow[n] more than 10 percent of either
the capital interest or the profits interest in [a] partnership”
and sole proprietors, but not shareholder-employees. 26
U. S. C. § 401(c)(3). In sum, Title I’s provisions involving
loans to plan participants, by explicit inclusion or exclusion,
assume that working owners—shareholder-employees, part-
ners, and sole proprietors—may participate in ERISA-
qualified benefit plans.
Provisions of Title IV of ERISA are corroborative. Brief
for United States as Amicus Curiae 17, and n. 8. Title IV
does not apply to plans “established and maintained ex-
clusively for substantial owners,” 29 U. S. C. § 1321(b)(9)
(emphasis added), a category that includes sole proprie-
tors and shareholders and partners with a ten percent or
greater ownership interest, § 1322(b)(5)(A). But Title IV
does cover plans in which substantial owners participate
along with other employees. See § 1322(b)(5)(B). In addi-
tion, Title IV does not cover plans established by “profes-
sional service employer[s]” with 25 or fewer active partici-
pants. § 1321(b)(13). Yates’s medical practice was set up as
a professional service employer. See § 1321(c)(2)(A) (a “pro-
fessional service employer” is “any proprietorship, partner-
ship, corporation . . . owned or controlled by professional
individuals . . . the principal business of which is the per-
formance of professional services”). But significantly larger
plans—plans covering more than 25 employees—established

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16 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
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Opinion of the Court
by a professional service employer would presumably qualify
for protection.
Particularly instructive, Title IV and the IRC, as amended
by Title II, clarify a key point missed by several lower
courts: Under ERISA, a working owner may have dual sta-
tus, i. e., he can be an employee entitled to participate in a
plan and, at the same time, the employer (or owner or
member of the employer) who established the plan. Both
Title IV and the IRC describe the “employer” of a sole pro-
prietor or partner. See 29 U. S. C. § 1301(b)(1) (“An individ-
ual who owns the entire interest in an unincorporated trade
or business is treated as his own employer, and a partnership
is treated as the employer of each partner who is an em-
ployee within the meaning of section 401(c)(1) of [the IRC].”);
26 U. S. C. § 401(c)(4) (“An individual who owns the entire
interest in an unincorporated trade or business shall be
treated as his own employer. A partnership shall be treated
as the employer of each partner who is an employee within
the meaning of [§ 401(c)(1)].”). These descriptions expressly
anticipate that a working owner can wear two hats, as an
employer and employee. Cf. Clackamas Gastroenterology
Associates, P. C. v. Wells, 538 U. S. 440, 453 (2003) (Gins-
burg, J., dissenting) (“Clackamas readily acknowledges that
the physician-shareholders are ‘employees’ for ERISA
purposes.”).
In sum, because the statute’s text is adequately informa-
tive, we need not look outside ERISA itself to conclude with
security that Congress intended working owners to qualify
as plan participants.5
Congress’ aim is advanced by our reading of the text.
The working employer’s opportunity personally to partici-
5 We do not suggest that each provision described supra, at 13–15 and
this page, in isolation, would compel the Court’s reading. But cf. post, at
25–26 (Thomas, J., concurring in judgment). In combination, however,
the provisions supply “specific guidance” adequate to obviate any need to
expound on common law. See Darden, 503 U. S., at 323.

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pate and gain ERISA coverage serves as an incentive to the
creation of plans that will benefit employer and nonowner
employees alike. See Brief for United States as Amicus
Curiae 21–22. Treating working owners as participants not
only furthers ERISA’s purpose to promote and facilitate em-
ployee benefit plans. Recognizing the working owner as an
ERISA-sheltered plan participant also avoids the anomaly
that the same plan will be controlled by discrete regimes:
federal-law governance for the nonowner employees; state-
law governance for the working owner. See, e. g., Agrawal,
205 F. 3d, at 302 (because sole shareholder does not rank as
a plan participant under ERISA, his state-law claims against
insurer are not preempted). ERISA’s goal, this Court has
emphasized, is “uniform national treatment of pension bene-
fits.” Patterson v. Shumate, 504 U. S. 753, 765 (1992). Ex-
cepting working owners from the federal Act’s coverage
would generate administrative difficulties and is hardly con-
sistent with a national uniformity goal. Cf. Madonia, 11
F. 3d, at 450 (“Disallowing shareholders . . . from being plan
‘participants’ would result in disparate treatment of corpo-
rate employees’ claims, thereby frustrating the statutory
purpose of ensuring similar treatment for all claims relating
to employee benefit plans.”).
We note finally that a 1999 Department of Labor advisory
opinion accords with our comprehension of Title I’s definition
and coverage provisions. Pension and Welfare Benefits
Admin., U. S. Dept. of Labor, Advisory Opinion 99–04A, 26
BNA Pension and Benefits Rep. 559 (hereinafter Advisory
Opinion 99–04A). Confirming that working owners may
qualify as participants in ERISA-protected plans, the De-
partment’s opinion concludes:
“In our view, the statutory provisions of ERISA,
taken as a whole, reveal a clear Congressional design to
include ‘working owners’ within the definition of ‘partici-
pant’ for purposes of Title I of ERISA. Congress could
not have intended that a pension plan operated so as to

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18 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Opinion of the Court
satisfy the complex tax qualification rules applicable to
benefits provided to ‘owner-employees’ under the provi-
sions of Title II of ERISA, and with respect to which
an employer faithfully makes the premium payments re-
quired to protect the benefits payable under the plan to
such individuals under Title IV of ERISA, would some-
how transgress against the limitations of the definitions
contained in Title I of ERISA. Such a result would
cause an intolerable conflict between the separate titles
of ERISA, leading to the sort of ‘absurd results’ that the
Supreme Court warned against in Nationwide Mutual
Insurance Co. v. Darden, 503 U. S. 318 (1992).” Id., at
560–561 (footnote omitted).
This agency view on the qualification of a self-employed indi-
vidual for plan participation reflects a “body of experience
and informed judgment to which courts and litigants may
properly resort for guidance.” Skidmore v. Swift & Co., 323
U. S. 134, 140 (1944).
B
The Sixth Circuit’s leading decision in point—its 1992 de-
termination in Fugarino—relied, in large part, on an incor-
rect reading of a Department of Labor regulation, 29 CFR
§ 2510.3–3. The Fugarino court read the Department’s reg-
ulation to rule out classification of a working owner as an
employee of the business he owns. Entitled “Employee ben-
efit plan,” the regulation complements § 3(3) of ERISA, 29
U. S. C. § 1002(3), which defines “employee benefit plan,” see
supra, at 7; the regulation provides, in relevant part:
“(b) Plans without employees. For purposes of title
I of the Act and this chapter, the term ‘employee benefit
plan’ shall not include any plan, fund or program, other
than an apprenticeship or other training program, under
which no employees are participants covered under the
plan, as defined in paragraph (d) of this section. For
example, a so-called ‘Keogh’ or ‘H. R. 10’ plan under

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19 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
which only partners or only a sole proprietor are partici-
pants covered under the plan will not be covered under
title I. However, a Keogh plan under which one or
more common law employees, in addition to the self-
employed individuals, are participants covered under
the plan, will be covered under title I. . . .
“(c) Employees. For purposes of this section:
“(1) An individual and his or her spouse shall not be
deemed to be employees with respect to a trade or busi-
ness, whether incorporated or unincorporated, which is
wholly owned by the individual or by the individual and
his or her spouse, and
“(2) A partner in a partnership and his or her spouse
shall not be deemed to be employees with respect to
the partnership.” 29 CFR § 2510.3–3 (2003) (emphasis
added and deleted).
In common with other Courts of Appeals that have held
working owners do not qualify as participants in ERISA-
governed employee benefit plans, the Sixth Circuit appar-
ently understood the regulation to provide a generally appli-
cable definition of the term “employee,” controlling for all
Title I purposes. Fugarino, 969 F. 2d, at 185–186 (“As a
result of [the] regulatio[n], a plan whose sole beneficiaries are
the company’s owners cannot qualify as a plan under ERISA.
Further, an employer cannot ordinarily be an employee or
participant under ERISA.” (citation omitted)). See also
Kwatcher, 879 F. 2d, at 961 (“By its terms, the regulation
unambiguously debars a sole shareholder . . . from ‘employee’
status, notwithstanding that he may work for the corpora-
tion he owns, shoulder to shoulder with eligible (non-owner)
employees.”); Giardono, 867 F. 2d, at 412 (“[This] regulatio[n]
exclude[s] from the definition of an employee any individual
who wholly owns a trade or business, whether incorporated
or unincorporated.”).

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20 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
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Opinion of the Court
Almost eight years after its decision in Fugarino, in Agra-
wal, the Sixth Circuit implied that it may have misread
the regulation: “Th[e] limiting definition of employee [in
§ 2510.3–3(c)] addresses the threshold issue of whether an
ERISA plan exists. It is not consistent with the purpose of
ERISA to apply this limiting definition of employee to the
statutory definitions of participant and beneficiary.” 205
F. 3d, at 303. The Circuit, however, did not overrule its
earlier interpretation. See 287 F. 3d, at 525 (case below)
(“[T]he three judge panel before which this appeal is cur-
rently pending has no authority to overrule Fugarino.”);
Agrawal, 205 F. 3d, at 302 (“the decision in the present case
is preordained by the Fugarino holding”).
The Department of Labor’s 1999 advisory opinion, see
supra, at 17, interprets the “Employee benefit plan” regula-
tion as follows:
“In its regulation at 29 C. F. R. 2510.3–3, the Depart-
ment clarified that the term ‘employee benefit plan’ as
defined in section 3(3) of Title I does not include a plan
the only participants of which are ‘[a]n individual and
his or her spouse . . . with respect to a trade of busi-
ness, whether incorporated or unincorporated, which is
wholly owned by the individual or by the individual and
his or her spouse’ or ‘[a] partner in a partnership and
his or her spouse.’ The regulation further specifies,
however, that a plan that covers as participants ‘one or
more common law employees, in addition to the self-
employed individuals’ will be included in the definition
of ‘employee benefit plan’ under section 3(3). The con-
clusion of this opinion, that such ‘self-employed indi-
viduals’ are themselves ‘participants’ in the covered
plan, is fully consistent with that regulation.” Advi-
sory Opinion 99–04A, at 561, n. 7 (emphasis added).
This agency view, overlooked by the Sixth Circuit, see Brief
for United States as Amicus Curiae 26, merits the Judicia-

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21 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
ry’s respectful consideration. Cf. Clackamas Gastroenterol-
ogy Associates, P. C., 538 U. S., at 449 (Equal Employment
Opportunity Commission guidelines under the Americans
with Disabilities Act of 1990 are persuasive).
The Department’s regulation itself reveals the definitional
prescription’s limited scope. The prescription describes
“employees” only “[f]or purposes of this section,” supra, at
19 (emphasis deleted), i. e., the section defining “employee
benefit plans.” Accordingly, the regulation addresses only
what plans qualify as “employee benefit plans” under Title I
of ERISA. Plans that cover only sole owners or partners
and their spouses, the regulation instructs, fall outside Title
I’s domain.6 Plans covering working owners and their non-
owner employees, on the other hand, fall entirely within
ERISA’s compass.7 See Vega, 188 F. 3d, at 294 (“We . . .
interpret the regulatio[n] to define employee only for pur-
poses of determining the existence of an ERISA plan.”); Ma-
6 Courts agree that if a benefit plan covers only working owners, it is
not covered by Title I. See, e. g., Slamen v. Paul Revere Life Ins. Co.,
166 F. 3d 1102, 1105 (CA11 1999) (sole shareholder is not a participant
where disability plan covered only him); In re Watson, 161 F. 3d 593, 597
(CA9 1998) (sole shareholder is not a participant where retirement plan
covered only him); SEC v. Johnston, 143 F. 3d 260, 262–263 (CA6 1998)
(owner is not a participant where pension plan covered only owner and
“perhaps” his wife); Schwartz v. Gordon, 761 F. 2d 864, 867 (CA2 1985)
(self-employed individual is not a participant where he is the only contribu-
tor to a Keogh plan). Such a plan, however, could qualify for favorable
tax treatment. See Brief for United States as Amicus Curiae 18, n. 9.
7 Section 2510.3–3’s preamble supports this interpretation. The pream-
ble states, in relevant part:
“According to the comments [concerning proposed § 2510.3–3], a definition
of ‘employee’ excluding self-employed individuals might raise problems
under section 404(a)(1) with respect to disbursements to self-employed
individuals from ‘Keogh’ or ‘H. R. 10’ plans covering both self-employed
individuals and ‘common law’ employees. Therefore, the definition of
‘employee’ formerly appearing in proposed § 2510.3–6 has been inserted
into § 2510.3–3 and restricted in scope to that section.” 40 Fed. Reg.
34528 (1975) (emphasis added).

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22 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
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Opinion of the Court
donia, 11 F. 3d, at 449–450 (“[T]he regulation does not gov-
ern the issue of whether someone is a ‘participant’ in an
ERISA plan, once the existence of that plan has been estab-
lished. This makes perfect sense: once a plan has been es-
tablished, it would be anomalous to have those persons ben-
efitting from it governed by two disparate sets of legal
obligations.”).
Also in common with other Courts of Appeals that have
denied participant status to working owners, the Sixth Cir-
cuit’s leading decision mistakenly relied, in addition, on
ERISA’s “anti-inurement” provision, 29 U. S. C. § 1103(c)(1),
which prohibits plan assets from inuring to the benefit of
employers. See Fugarino, 969 F. 2d, at 186 (“A fundamental
requirement of ERISA is that ‘the assets of a plan shall
never inure to the benefit of any employer . . . .’ ”); Kwatcher,
879 F. 2d, at 960 (“Once a person has been found to fit within
the ‘employer’ integument, [§ 1103(c)(1)] prohibits payments
to him from a qualified plan.”); Giardono, 867 F. 2d, at 411
(“It is a fundamental requirement of ERISA that ‘. . . the
assets of a plan shall never inure to the benefit of any
employer . . . .’ ”).
Correctly read, however, the anti-inurement provision
does not preclude Title I coverage of working owners as plan
participants. It states that, with enumerated exceptions,
“the assets of a plan shall never inure to the benefit of any
employer and shall be held for the exclusive purposes of pro-
viding benefits to participants in the plan and their benefici-
aries and defraying reasonable expenses of administering the
plan.” 29 U. S. C. § 1103(c)(1). The provision demands only
that plan assets be held for supplying benefits to plan partici-
pants. Like the Department of Labor regulation, see supra,
at 18–19, the anti-inurement provision does not address the
discrete question whether working owners, along with non-
owner employees, may be participants in ERISA-sheltered
plans. As the Fifth Circuit observed in Vega:

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23 Cite as: 541 U. S. 1 (2004)
Opinion of the Court
“Th[e] [anti-inurement] provision refers to the congres-
sional determination that funds contributed by the em-
ployer (and, obviously, by the [nonowner] employees . . .)
must never revert to the employer; it does not relate to
plan benefits being paid with funds or assets of the plan
to cover a legitimate pension or health benefit claim by
an employee who happens to be a stockholder or even
the sole shareholder of a corporation.” 188 F. 3d, at
293, n. 5.
ERISA’s anti-inurement provision is based on the anal-
ogous exclusive benefit provision in the IRC, 26 U. S. C.
§ 401(a)(2), which has never been understood to bar tax-
qualified plan participation by working owners. See H. R.
Conf. Rep. No. 93–1280, pp. 302–303 (1974); Brief for United
States as Amicus Curiae 29. The purpose of the anti-
inurement provision, in common with ERISA’s other fiduci-
ary responsibility provisions, is to apply the law of trusts to
discourage abuses such as self-dealing, imprudent invest-
ment, and misappropriation of plan assets, by employers and
others. See, e. g., Prudential Ins. Co. of Am. v. Doe, 76 F. 3d
206, 209 (CA8 1996). Those concerns are not implicated by
paying benefits to working owners who participate on an
equal basis with nonowner employees in ERISA-protected
plans.
In sum, the anti-inurement provision, like the Department
of Labor regulation, establishes no categorical barrier to
working owner participation in ERISA plans. Whether
Yates himself, in his handling of loan repayments, see supra,
at 8, engaged in conduct inconsistent with the anti-inurement
provision is an issue not yet reached by the courts below,
one on which we express no opinion.
* * *
For the reasons stated, the judgment of the Court of Ap-
peals for the Sixth Circuit is reversed, and the case is re-
manded for further proceedings consistent with this opinion,

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24 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Scalia, J., concurring in judgment
including consideration of questions earlier raised but not
resolved. Specifically, given the undisputed facts concern-
ing Yates’s handling of the loan, i.e., his failure to honor the
periodic repayment requirements: (1) Did the November
1996 close-to-bankruptcy repayments, despite the prior de-
faults, become “a portion of [Yates’s] interest in a qualified
retirement plan . . . excluded from his bankruptcy estate,”
App. to Pet. for Cert. 40a; and (2) if so, were the repayments
“beyond the reach of [the Bankruptcy] [T]rustee’s power to
avoid and recover preferential transfers,” id., at 47a?
It is so ordered.
Justice Scalia, concurring in the judgment.
The Court uses a sledgehammer to kill a gnat—though it
may be a sledgehammer prescribed by United States v. Mead
Corp., 533 U. S. 218 (2001). I dissented from that case, see
id., at 257, and remain of the view that authoritative inter-
pretations of law by the implementing agency, if reasonable,
are entitled to respect. Chevron U. S. A. Inc. v. Natural
Resources Defense Council, Inc., 467 U. S. 837 (1984).
In the present case the Solicitor General of the United
States, in a brief signed by the Acting Solicitor of Labor, has
put forward as the “considered view of the agency charged
by Congress with the administration and enforcement of
Title I of ERISA,” an interpretation of the relevant terms
of that Act which would allow working owners (including
sole owners, such as Dr. Yates) to be plan participants under
the Employee Retirement Income Security Act of 1974
(ERISA). Brief for United States as Amicus Curiae 26.
There is no doubt that this position is the official view of the
Department of Labor, and that it has not been contrived for
this litigation. The Solicitor General’s brief relies upon a
Department of Labor advisory opinion, issued more than five
years ago, which concluded that “the statutory provisions of
ERISA, taken as a whole, reveal a clear Congressional de-
sign to include ‘working owners’ within the definition of ‘par-

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25 Cite as: 541 U. S. 1 (2004)
Thomas, J., concurring in judgment
ticipant’ for purposes of Title I of ERISA.” Pension and
Welfare Benefits Admin., U. S. Dept. of Labor, Advisory
Opinion 99–04A (Feb. 4, 1999), 26 BNA Pension and Benefits
Rep. 559, 560 (1999).
The Department’s interpretive conclusion is certainly rea-
sonable (the Court’s lengthy analysis says that it is inevi-
table); it is therefore binding upon us. See Barnhart v.
Thomas, 540 U. S. 20, 26 (2003). I would reverse the judg-
ment of the Sixth Circuit on that basis. The Court’s ap-
proach, which denies many agency interpretations their con-
clusive effect and thrusts the courts into authoritative
judicial interpretation, deprives administrative agencies of
two of their principal virtues: (1) the power to resolve statu-
tory questions promptly, and with nationwide effect, and
(2) the power (within the reasonable bounds of the text) to
change the application of ambiguous laws as time and experi-
ence dictate. The Court’s approach invites lengthy litiga-
tion in all the circuits—the product of which (when finally
announced by this Court) is a rule of law that only Congress
can change.
Justice Thomas, concurring in the judgment.
I agree with the Court that the judgment of the Court of
Appeals should be reversed. The Court persuasively ad-
dresses the Court of Appeals’ many errors in this case. See
ante, at 18–23. I do not, however, find convincing the
Court’s reliance on textual “indications,” ante, at 12. The
text of the Employee Retirement Income Security Act of
1974 (ERISA) is certainly consistent with the Court’s inter-
pretation of the word “employee” to include so-called “work-
ing owners.” * Ibid. However, the various Title I exemp-
tions relied upon so heavily by the Court, see ante, at 13–15,
*The Court does not clearly define who exactly makes up this class of
“working owners,” even though members of this class are now considered
categorically to fall under ERISA’s definition of “employee.”

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26 RAYMOND B. YATES, M. D., P. C. PROFIT SHARING
PLAN v. HENDON
Thomas, J., concurring in judgment
are equally consistent with an interpretation of “employee”
that would not include all “working owners.”
As an example, the Court places weight on the exception
to the exemption from 29 U. S. C. § 1106, which bars loans
made to parties in interest that are “ ‘made available to
highly compensated employees . . . in an amount greater than
the amount made available to other employees.’ ” Ante, at
15 (quoting 29 U. S. C. § 1108(b)(1)(B)). The Court notes
that “some working owners . . . qualify as ‘highly compen-
sated employees.’ ” Ante, at 15. That may be true, but
there are surely numerous “highly compensated employees”
who would both be “employees” under the usual, common-
law meaning of that term (and hence “employees” under
ERISA, see Nationwide Mut. Ins. Co. v. Darden, 503 U. S.
318 (1992)), and would also not be considered “working own-
ers” as the Court uses the term. It is entirely possible,
then, that Congress was merely attempting to exclude these
individuals from § 1106, rather than assuming that all “work-
ing owners” were “employees.” Hence, the existence of this
exception tells us nothing about whether Congress “intended
working owners” to be “employees” under ERISA. Ante,
at 12.
Since the text is inconclusive, we must turn to the
common-law understanding of the term “employee.” Dar-
den, supra, at 322–323. On remand, then, I would direct
the Court of Appeals to address whether the common-law
understanding of the term “employee,” as used in ERISA,
includes Dr. Yates. I would be surprised if it did not, see
In re Baker, 114 F. 3d 636, 639 (CA7 1997) (corporation’s sep-
arate legal existence from shareholder must be respected);
Madonia v. Blue Cross & Blue Shield of Virginia, 11 F. 3d
444, 448–449 (CA4 1993) (same), but this is a matter best
resolved, in the first instance, by the court below.