CLACKAMAS GASTROENTEROLOGY ASSOCIATES, P. C. v. WELLS

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440 OCTOBER TERM, 2002
Syllabus
CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C. v. WELLS
certiorari to the united states court of appeals for
the ninth circuit
No. 01–1435. Argued February 25, 2003—Decided April 22, 2003
Respondent filed suit alleging that petitioner medical clinic violated the
Americans with Disabilities Act of 1990 (ADA or Act) when it termi-
nated her employment. Petitioner moved for summary judgment, as-
serting that it was not covered by the Act because it did not have 15 or
more employees for the 20 weeks required by the ADA. That asser-
tion’s accuracy depends on whether the four physician-shareholders who
own the professional corporation and constitute its board of directors
are counted as employees. In granting the motion, the District Court
concluded that the physicians were more analogous to partners in a
partnership than to shareholders in a corporation and therefore were
not employees under the ADA. The Ninth Circuit reversed, finding no
reason to permit a professional corporation to reap the tax and civil
liability advantages of its corporate status and then argue that it is like
a partnership so as to avoid employment discrimination liability.
Held:
1. The common-law element of control is the principal guidepost to be
followed in deciding whether the four director-shareholder physicians in
this case should be counted as “employees.” Where, as here, a statute
does not helpfully define the term “employee,” this Court’s cases con-
struing similar language give guidance in how best to fill the statutory
text’s gap. Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 322, 323.
The professional corporation is a new type of business entity with no
exact common-law precedent, but the common law’s definition of the
master-servant relationship provides helpful guidance: the focus on the
master’s control over the servant. Accordingly, the Equal Employment
Opportunity Commission (EEOC) argues that a court should examine
whether shareholder-directors operate independently and manage the
business or instead are subject to the firm’s control. Specific EEOC
guidelines discuss the broad question of who is an “employee” and the
narrower one of when partners, officers, board of directors’ members,
and major shareholders qualify as employees. The Court is persuaded
by the EEOC’s focus on the common-law touchstone of control and spe-
cifically by its submission that each of six factors are relevant to the
inquiry whether a shareholder-director is an employee. Pp. 444–451.

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Opinion of the Court
2. Because the District Court’s findings appear to weigh in favor of
concluding that the four physicians are not clinic employees, but evi-
dence in the record may contradict those findings or support a contrary
conclusion under the EEOC’s standard, the case is remanded for further
proceedings. P. 451.
271 F. 3d 903, reversed and remanded.
Stevens, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and O’Connor, Scalia, Kennedy, Souter, and Thomas, JJ., joined.
Ginsburg, J., filed a dissenting opinion, in which Breyer, J., joined,
post, p. 451.
Steven W. Seymour argued the cause for petitioner. With
him on the briefs was Andria C. Kelly.
Irving L. Gornstein argued the cause for the United
States et al. as amici curiae urging reversal. With him on
the brief were Solicitor General Olson, Deputy Solicitor
General Clement, Philip B. Sklover, Lorraine C. Davis, and
Robert J. Gregory.
Craig A. Crispin argued the cause and filed a brief for
respondent.*
Justice Stevens delivered the opinion of the Court.
The Americans with Disabilities Act of 1990 (ADA or Act),
104 Stat. 327, as amended, 42 U. S. C. § 12101 et seq., like
other federal antidiscrimination legislation,1 is inapplica-
ble to very small businesses. Under the ADA an “em-
*Briefs of amici curiae urging affirmance were filed for the American
Federation of Labor and Congress of Industrial Organizations by Jona-
than P. Hiatt, James B. Coppess, and Laurence Gold; for the Lawyers’
Committee for Civil Rights Under Law et al. by Barbara R. Arnwine,
Thomas J. Henderson, Michael L. Foreman, Daniel B. Kohrman, Melvin
Radowitz, Vincent A. Eng, Dennis C. Hayes, and Judith L. Lichtman;
and for the National Employment Lawyers Association et al. by Merl H.
Wayman and Jenifer Bosco.
1 See, e. g., 29 U. S. C. § 630(b) (setting forth a 20-employee threshold for
coverage under the Age Discrimination in Employment Act of 1967
(ADEA)); 42 U. S. C. § 2000e(b) (establishing a 15-employee threshold for
coverage under Title VII of the Civil Rights Act of 1964).

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Opinion of the Court
ployer” is not covered unless its work force includes “15 or
more employees for each working day in each of 20 or more
calendar weeks in the current or preceding calendar year.”
§ 12111(5). The question in this case is whether four physi-
cians actively engaged in medical practice as shareholders
and directors of a professional corporation should be counted
as “employees.”
I
Petitioner, Clackamas Gastroenterology Associates, P. C.,
is a medical clinic in Oregon. It employed respondent, Deb-
orah Anne Wells, as a bookkeeper from 1986 until 1997.
After her termination, she brought this action against the
clinic alleging unlawful discrimination on the basis of dis-
ability under Title I of the ADA. Petitioner denied that it
was covered by the Act and moved for summary judgment,
asserting that it did not have 15 or more employees for
the 20 weeks required by the statute. It is undisputed that
the accuracy of that assertion depends on whether the
four physician-shareholders who own the professional corpo-
ration and constitute its board of directors are counted as
employees.
The District Court, adopting the Magistrate Judge’s find-
ings and recommendation, granted the motion. Relying on
an “economic realities” test adopted by the Seventh Circuit
in EEOC v. Dowd & Dowd, Ltd., 736 F. 2d 1177, 1178 (1984),
the District Court concluded that the four doctors were
“more analogous to partners in a partnership than to share-
holders in a general corporation” and therefore were “not
employees for purposes of the federal antidiscrimination
laws.” App. 89.
A divided panel of the Court of Appeals for the Ninth Cir-
cuit reversed. Noting that the Second Circuit had rejected
the economic realities approach, the majority held that the
use of any corporation, including a professional corporation,
“ ‘precludes any examination designed to determine whether
the entity is in fact a partnership.’ ” 271 F. 3d 903, 905

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(2001) (quoting Hyland v. New Haven Radiology Associates,
P. C., 794 F. 2d 793, 798 (CA2 1986)). It saw “no reason to
permit a professional corporation to secure the ‘best of both
possible worlds’ by allowing it both to assert its corporate
status in order to reap the tax and civil liability advantages
and to argue that it is like a partnership in order to avoid
liability for unlawful employment discrimination.” 271 F.
3d, at 905. The dissenting judge stressed the differences
between an Oregon physicians’ professional corporation and
an ordinary business corporation,2 and argued that Congress’
2 The dissenting judge summarized Oregon’s treatment of professional
corporations as follows:
“In Oregon, a physicians’ professional corporation, like this one, pre-
serves the professional relationship between the physicians and their pa-
tients, as well as the standards of conduct that the medical profession
requires. Or. Rev. Stat. § 58.185(2). Further, ‘a shareholder of the cor-
poration is personally liable as if the shareholder were rendering the
service or services as an individual’ with respect to all claims of negli-
gence, wrongful acts or omissions, or misconduct committed in the render-
ing of professional services. Or. Rev. Stat. § 58.185(3) (emphasis added).
A licensed professional also is jointly and severally liable for such claims,
albeit with some dollar limitations. Or. Rev. Stat. § 58.185(4)–(9). Ordi-
nary business corporation rules apply only to other aspects of the en-
tity, apart from the provision of professional services. Or. Rev. Stat.
§ 58.185(11). A professional corporation’s activities must remain consist-
ent with the requirements of the type of license in question, Or. Rev. Stat.
§ 58.205, and it may merge only with other professional corporations, Or.
Rev. Stat. § 58.196, so the provision of professional services—with its at-
tendant liabilities—must remain at the heart of a P. C. like this defendant.
“Additional special rules apply to professional corporations that are or-
ganized to practice medicine, none of which apply to ordinary business
corporations. A majority of the directors, the holders of the majority of
shares, and all officers except the secretary and treasurer must be
Oregon-licensed physicians. Or. Rev. Stat. § 58.375(1)(a)–(c). The Board
of Medical Examiners is given express statutory authority to require more
than a majority of shares, and more than a majority of director positions,
to be held by Oregon-licensed physicians. Or. Rev. Stat. § 58.375(1)(d) &
(e). The Board of Medical Examiners also may restrict the corporate pow-
ers of a professional corporation organized for the purpose of practicing
medicine, beyond the restrictions imposed on ordinary business corpora-

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Opinion of the Court
reasons for exempting small employers from the coverage of
the Act should apply to petitioner. Id., at 906–909 (opinion
of Graber, J.).
We granted certiorari to resolve the conflict in the Cir-
cuits, which extends beyond the Seventh and the Second
Circuits.3 536 U. S. 990 (2002).
II
“We have often been asked to construe the meaning of
‘employee’ where the statute containing the term does not
helpfully define it.” Nationwide Mut. Ins. Co. v. Darden,
503 U. S. 318, 322 (1992). The definition of the term in the
ADA simply states that an “employee” is “an individual em-
ployed by an employer.” 42 U. S. C. § 12111(4). That surely
qualifies as a mere “nominal definition” that is “completely
circular and explains nothing.” Darden, 503 U. S., at 323.
As we explained in Darden, our cases construing similar lan-
guage give us guidance on how best to fill the gap in the
statutory text.
In Darden we were faced with the question whether an
insurance salesman was an independent contractor or an
“employee” covered by the Employee Retirement Income
Security Act of 1974 (ERISA). Because ERISA’s definition
of “employee” was “completely circular,” 503 U. S., at 323,
we followed the same general approach that we had pre-
viously used in deciding whether a sculptor was an “em-
ployee” within the meaning of the Copyright Act of 1976, see
Community for Creative Non-Violence v. Reid, 490 U. S. 730
tions. Or. Rev. Stat. § 58.379. Lastly, Or. Rev. Stat. §§ 58.375 through
58.389 contain impediments to the transfer of shares and other corporate
activities.” 271 F. 3d, at 907–908 (opinion of Graber, J.) (footnote omitted).
3 The disagreement in the Circuits is not confined to the particulars of
the ADA. For example, the Seventh Circuit’s decision in EEOC v.
Dowd & Dowd, Ltd., 736 F. 2d 1177 (1984), concerned Title VII, and the
Second Circuit’s opinion in Hyland v. New Haven Radiology Associates,
P. C., 794 F. 2d 793 (1986), involved the ADEA. See also Devine v. Stone,
Leyton & Gershman, P. C., 100 F. 3d 78 (CA8 1996) (Title VII case).

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(1989),4 and we adopted a common-law test for determining
who qualifies as an “employee” under ERISA.5 Quoting
Reid, 490 U. S., at 739–740, we explained that “ ‘when
Congress has used the term “employee” without defining
it, we have concluded that Congress intended to describe
the conventional master-servant relationship as understood
by common-law agency doctrine.’ ” Darden, 503 U. S., at
322–323.
Rather than looking to the common law, petitioner argues
that courts should determine whether a shareholder-director
of a professional corporation is an “employee” by asking
whether the shareholder-director is, in reality, a “partner.”
Brief for Petitioner 9, 15–16, 21 (arguing that the four share-
holders in the clinic are more analogous to partners in a
partnership than shareholders in a corporation and that
4 In Reid, 490 U. S., at 738, the ownership of a copyright in a statue
depended on whether it had been “ ‘prepared by an employee within the
scope of his or her employment’ ” within the meaning of the Copyright Act
of 1976.
5 Darden described the common-law test for determining whether a
hired party is an employee as follows:
“ ‘[W]e consider the hiring party’s right to control the manner and
means by which the product is accomplished. Among the other factors
relevant to this inquiry are the skill required; the source of the instrumen-
talities and tools; the location of the work; the duration of the relationship
between the parties; whether the hiring party has the right to assign
additional projects to the hired party; the extent of the hired party’s dis-
cretion over when and how long to work; the method of payment; the hired
party’s role in hiring and paying assistants; whether the work is part of
the regular business of the hiring party; whether the hiring party is in
business; the provision of employee benefits; and the tax treatment of the
hired party.’ ” 503 U. S., at 323–324 (quoting Community for Creative
Non-Violence v. Reid, 490 U. S. 730, 751–752 (1989), and citing Restate-
ment (Second) of Agency § 220(2) (1958)).
These particular factors are not directly applicable to this case because
we are not faced with drawing a line between independent contractors
and employees. Rather, our inquiry is whether a shareholder-director is
an employee or, alternatively, the kind of person that the common law
would consider an employer.

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“those who are properly classified as partners are not
‘employees’ for purposes of the anti-discrimination stat-
utes”). The question whether a shareholder-director is an
employee, however, cannot be answered by asking whether
the shareholder-director appears to be the functional equiva-
lent of a partner. Today there are partnerships that include
hundreds of members, some of whom may well qualify as
“employees” because control is concentrated in a small num-
ber of managing partners. Cf. Hishon v. King & Spalding,
467 U. S. 69, 79, n. 2 (1984) (Powell, J., concurring) (“[A]n
employer may not evade the strictures of Title VII simply
by labeling its employees as ‘partners’ ”); EEOC v. Sid-
ley Austin Brown & Wood, 315 F. 3d 696, 709 (CA7 2002)
(Easterbrook, J., concurring in part and concurring in judg-
ment); Strother v. Southern California Permanente Medical
Group, 79 F. 3d 859 (CA9 1996). Thus, asking whether
shareholder-directors are partners—rather than asking
whether they are employees—simply begs the question.
Nor does the approach adopted by the Court of Appeals in
this case fare any better. The majority’s approach, which
paid particular attention to “the broad purpose of the ADA,”
271 F. 3d, at 905, is consistent with the statutory purpose of
ridding the Nation of the evil of discrimination. See 42
U. S. C. § 12101(b). 6 Nevertheless, two countervailing con-
siderations must be weighed in the balance. First, as the
6 The meaning of the term “employee” comes into play when determin-
ing whether an individual is an “employee” who may invoke the ADA’s
protections against discrimination in “hiring, advancement, or discharge,”
42 U. S. C. § 12112(a), as well as when determining whether an individual
is an “employee” for purposes of the 15-employee threshold. See
§ 12111(5)(A); see also Brief for United States et al. as Amici Curiae
10–11; Schmidt v. Ottawa Medical Center, P. C., 322 F. 3d 461 (CA7 2003).
Consequently, a broad reading of the term “employee” would—consistent
with the statutory purpose of ridding the Nation of discrimination—tend
to expand the coverage of the ADA by enlarging the number of employees
entitled to protection and by reducing the number of firms entitled to
exemption.

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dissenting judge noted below, the congressional decision to
limit the coverage of the legislation to firms with 15 or more
employees has its own justification that must be respected—
namely, easing entry into the market and preserving the
competitive position of smaller firms. See 271 F. 3d, at 908
(opinion of Graber, J.) (“Congress decided ‘to spare very
small firms from the potentially crushing expense of master-
ing the intricacies of the antidiscrimination laws, establish-
ing procedures to assure compliance, and defending against
suits when efforts at compliance fail’ ” (quoting Papa v. Katy
Industries, Inc., 166 F. 3d 937, 940 (CA7), cert. denied, 528
U. S. 1019 (1999))). Second, as Darden reminds us, congres-
sional silence often reflects an expectation that courts will
look to the common law to fill gaps in statutory text, particu-
larly when an undefined term has a settled meaning at com-
mon law. Congress has overridden judicial decisions that
went beyond the common law in an effort to correct “ ‘the
mischief ’ ” at which a statute was aimed. See 503 U. S., at
324–325.
Perhaps the Court of Appeals’ and the parties’ failure to
look to the common law for guidance in this case stems from
the fact that we are dealing with a new type of business
entity that has no exact precedent in the common law.
State statutes now permit incorporation for the purpose of
practicing a profession, but in the past “the so-called learned
professions were not permitted to organize as corporate enti-
ties.” 1A W. Fletcher, Cyclopedia of the Law of Private
Corporations § 112.10 (rev. ed. 1997–2002). Thus, profes-
sional corporations are relatively young participants in the
market, and their features vary from State to State. See
generally 1 B. Bittker & J. Eustice, Federal Income Taxation
of Corporations and Shareholders ¶ 2.06 (7th ed. 2002) (ex-
plaining that States began to authorize the creation of pro-
fessional corporations in the late 1950’s and that the momen-
tum to form professional corporations grew in the 1970’s).

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Opinion of the Court
Nonetheless, the common law’s definition of the master-
servant relationship does provide helpful guidance. At com-
mon law the relevant factors defining the master-servant re-
lationship focus on the master’s control over the servant.
The general definition of the term “servant” in the Restate-
ment (Second) of Agency § 2(2) (1957), for example, refers to
a person whose work is “controlled or is subject to the right
to control by the master.” See also id., § 220(1) (“A servant
is a person employed to perform services in the affairs of
another and who with respect to the physical conduct in the
performance of the services is subject to the other’s control
or right to control”). In addition, the Restatement’s more
specific definition of the term “servant” lists factors to be
considered when distinguishing between servants and inde-
pendent contractors, the first of which is “the extent of con-
trol” that one may exercise over the details of the work of
the other. Id., § 220(2)(a). We think that the common-law
element of control is the principal guidepost that should be
followed in this case.
This is the position that is advocated by the Equal Em-
ployment Opportunity Commission (EEOC), the agency that
has special enforcement responsibilities under the ADA and
other federal statutes containing similar threshold issues for
determining coverage. It argues that a court should exam-
ine “whether shareholder-directors operate independently
and manage the business or instead are subject to the firm’s
control.” Brief for United States et al. as Amici Curiae
8. According to the EEOC’s view, “[i]f the shareholder-
directors operate independently and manage the business,
they are proprietors and not employees; if they are subject
to the firm’s control, they are employees.” Ibid.
Specific EEOC guidelines discuss both the broad ques-
tion of who is an “employee” and the narrower question of
when partners, officers, members of boards of directors,
and major shareholders qualify as employees. See 2 Equal
Employment Opportunity Commission, Compliance Manual

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§§ 605:0008–605:00010 (2000) (hereinafter EEOC Compliance
Manual).7 With respect to the broad question, the guide-
lines list 16 factors—taken from Darden, 503 U. S., at 323–
324—that may be relevant to “whether the employer controls
the means and manner of the worker’s work performance.”
EEOC Compliance Manual § 605:0008, and n. 71.8 The
guidelines list six factors to be considered in answering the
narrower question, which they frame as “whether the indi-
vidual acts independently and participates in managing the
organization, or whether the individual is subject to the or-
ganization’s control.” Id., § 605:0009.
We are persuaded by the EEOC’s focus on the common-
law touchstone of control, see Skidmore v. Swift & Co., 323
U. S. 134, 140 (1944),9 and specifically by its submission that
each of the following six factors is relevant to the inquiry
whether a shareholder-director is an employee:
“Whether the organization can hire or fire the individual
or set the rules and regulations of the individual’s work
7 The EEOC’s manual states that it applies across the board to other
federal antidiscrimination statutes. See EEOC Compliance Manual
§ 605:0001 (“This Section discusses coverage, timeliness, and other thresh-
old issues to be considered when a charge is first filed under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act
of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA), or
the Equal Pay Act of 1963 (EPA)” (footnote omitted)).
8 For example, the EEOC considers whether the work requires a high
level of skill or expertise, whether the employer furnishes the tools, ma-
terials, and equipment, and whether the employer has the right to con-
trol when, where, and how the worker performs the job. Id., § 605:0008.
9 As the Government has acknowledged, see Tr. of Oral Arg. 19, the
EEOC’s Compliance Manual is not controlling—even though it may consti-
tute a “body of experience and informed judgment” to which we may re-
sort for guidance. Skidmore v. Swift & Co., 323 U. S., at 140; see also
Christensen v. Harris County, 529 U. S. 576, 587 (2000) (holding that
agency interpretations contained in “policy statements, agency manuals,
and enforcement guidelines, all of which lack the force of law[,] do not
warrant Chevron-style deference”).

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“Whether and, if so, to what extent the organization su-
pervises the individual’s work
“Whether the individual reports to someone higher in
the organization
“Whether and, if so, to what extent the individual is able
to influence the organization
“Whether the parties intended that the individual be
an employee, as expressed in written agreements or
contracts
“Whether the individual shares in the profits, losses,
and liabilities of the organization.” EEOC Compliance
Manual § 605:0009.10
As the EEOC’s standard reflects, an employer is the per-
son, or group of persons, who owns and manages the enter-
prise. The employer can hire and fire employees, can assign
tasks to employees and supervise their performance, and can
decide how the profits and losses of the business are to be
distributed. The mere fact that a person has a particular
title—such as partner, director, or vice president—should
not necessarily be used to determine whether he or she is an
employee or a proprietor. See ibid. (“An individual’s title
. . . does not determine whether the individual is a partner,
officer, member of a board of directors, or major shareholder,
as opposed to an employee”). Nor should the mere exist-
ence of a document styled “employment agreement” lead in-
exorably to the conclusion that either party is an employee.
See ibid. (looking to whether “the parties intended that
the individual be an employee, as expressed in written
10 The EEOC asserts that these six factors need not necessarily be
treated as “exhaustive.” Brief for United States et al. as Amici Curiae
9. We agree. The answer to whether a shareholder-director is an em-
ployee or an employer cannot be decided in every case by a “ ‘shorthand
formula or magic phrase.’ ” Nationwide Mut. Ins. Co. v. Darden, 503
U. S. 318, 324 (1992) (quoting NLRB v. United Ins. Co. of America, 390
U. S. 254, 258 (1968)).

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Ginsburg, J., dissenting
agreements or contracts”). Rather, as was true in applying
common-law rules to the independent-contractor-versus-
employee issue confronted in Darden, the answer to whether
a shareholder-director is an employee depends on “ ‘all of the
incidents of the relationship . . . with no one factor being
decisive.’ ” 503 U. S., at 324 (quoting NLRB v. United Ins.
Co. of America, 390 U. S. 254, 258 (1968)).
III
Some of the District Court’s findings—when considered in
light of the EEOC’s standard—appear to weigh in favor of a
conclusion that the four director-shareholder physicians in
this case are not employees of the clinic. For example, they
apparently control the operation of their clinic, they share
the profits, and they are personally liable for malpractice
claims. There may, however, be evidence in the record that
would contradict those findings or support a contrary conclu-
sion under the EEOC’s standard that we endorse today.11
Accordingly, as we did in Darden, we reverse the judgment
of the Court of Appeals and remand the case to that court
for further proceedings consistent with this opinion.
It is so ordered.
Justice Ginsburg, with whom Justice Breyer joins,
dissenting.
“There is nothing inherently inconsistent between the co-
existence of a proprietary and an employment relationship.”
Goldberg v. Whitaker House Cooperative, Inc., 366 U. S. 28,
32 (1961). As doctors performing the everyday work of
petitioner Clackamas Gastroenterology Associates, P. C.,
the physician-shareholders function in several respects as
11 For example, the record indicates that the four director-shareholders
receive salaries, Tr. of Oral Arg. 8, that they must comply with the stand-
ards established by the clinic, App. 66, and that they report to a personnel
manager, ibid.

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Ginsburg, J., dissenting
common-law employees, a designation they embrace for vari-
ous purposes under federal and state law. Classifying as
employees all doctors daily engaged as caregivers on Clacka-
mas’ premises, moreover, serves the animating purpose of
the Americans with Disabilities Act of 1990 (ADA or Act).
Seeing no cause to shelter Clackamas from the governance
of the ADA, I would affirm the judgment of the Court of
Appeals.
An “employee,” the ADA provides, is “an individual em-
ployed by an employer.” 42 U. S. C. § 12111(4). Where, as
here, a federal statute uses the word “employee” without
explaining the term’s intended scope, we ordinarily presume
“Congress intended to describe the conventional master-
servant relationship as understood by common-law agency
doctrine.” Nationwide Mut. Ins. Co. v. Darden, 503 U. S.
318, 322–323 (1992) (internal quotation marks omitted). The
Court today selects one of the common-law indicia of a
master-servant relationship—control over the work of others
engaged in the business of the enterprise—and accords that
factor overriding significance. Ante, at 448. I would not so
shrink the inquiry.
Are the physician-shareholders “servants” of Clackamas
for the purpose relevant here? The Restatement defines
“servant” to mean “an agent employed by a master to per-
form service in his affairs whose physical conduct in the per-
formance of the service is controlled or is subject to the right
to control by the master.” Restatement (Second) of Agency
§ 2(2) (1957) (hereinafter Restatement). When acting as
clinic doctors, the physician-shareholders appear to fit the
Restatement definition. The doctors provide services on
behalf of the corporation, in whose name the practice is con-
ducted. See Ore. Rev. Stat. Ann. § 58.185(1)(a) (1998 Supp.)
(shareholders of a professional corporation “render the spec-
ified professional services of the corporation” (emphasis
added)). The doctors have employment contracts with
Clackamas, App. 71, under which they receive salaries and

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453 Cite as: 538 U. S. 440 (2003)
Ginsburg, J., dissenting
yearly bonuses, Tr. of Oral Arg. 8, and they work at facilities
owned or leased by the corporation, App. 29, 71. In per-
forming their duties, the doctors must “compl[y] with . . .
standards [the organization has] established.” Id., at 66; see
Restatement, ch. 7, tit. B, Introductory Note, p. 479 (“[F]ully
employed but highly placed employees of a corporation . . .
are not less servants because they are not controlled in their
day-to-day work by other human beings. Their physical ac-
tivities are controlled by their sense of obligation to devote
their time and energies to the interests of the enterprise.”).
The physician-shareholders, it bears emphasis, invite
the designation “employee” for various purposes under fed-
eral and state law. The Employee Retirement Income Secu-
rity Act of 1974 (ERISA), much like the ADA, defines “em-
ployee” as “any individual employed by an employer.” 29
U. S. C. § 1002(6). Clackamas readily acknowledges that the
physician-shareholders are “employees” for ERISA pur-
poses. Tr. of Oral Arg. 6–7. Indeed, gaining qualification
as “employees” under ERISA was the prime reason the
physician-shareholders chose the corporate form instead of a
partnership. See id., at 7. Further, Clackamas agrees, the
physician-shareholders are covered by Oregon’s workers’
compensation law, ibid., a statute applicable to “person[s] . . .
who . . . furnish services for a remuneration, subject to the
direction and control of an employer,” Ore. Rev. Stat. Ann.
§ 656.005(30) (1996 Supp.). Finally, by electing to organize
their practice as a corporation, the physician-shareholders
created an entity separate and distinct from themselves,
one that would afford them limited liability for the debts
of the enterprise. §§ 58.185(4), (5), (10), (11) (1998 Supp.). I
see no reason to allow the doctors to escape from their choice
of corporate form when the question becomes whether they
are employees for purposes of federal antidiscrimination
statutes.
Nothing in or about the ADA counsels otherwise. As the
Court observes, the reason for exempting businesses with

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454 CLACKAMAS GASTROENTEROLOGY ASSOCIATES,
P. C. v. WELLS
Ginsburg, J., dissenting
fewer than 15 employees from the Act, was “to spare very
small firms from the potentially crushing expense of master-
ing the intricacies of the antidiscrimination laws, establish-
ing procedures to assure compliance, and defending against
suits when efforts at compliance fail.” Ante, at 447 (quota-
tion from Papa v. Katy Industries, Inc., 166 F. 3d 937, 940
(CA7 1999)). The inquiry the Court endorses to determine
the physician-shareholders’ qualification as employees asks
whether they “ac[t] independently and participat[e] in man-
aging the organization, or . . . [are] subject to the organiza-
tion’s control.” Ante, at 449 (quoting 2 Equal Employment
Opportunity Commission, Compliance Manual § 605:0009
(2000)). Under the Court’s approach, a firm’s coverage by
the ADA might sometimes turn on variations in ownership
structure unrelated to the magnitude of the company’s busi-
ness or its capacity for complying with federal prescriptions.
This case is illustrative. In 1996, Clackamas had 4
physician-shareholders and at least 14 other employees for
28 full weeks; in 1997, it had 4 physician-shareholders and at
least 14 other employees for 37 full weeks. App. 55–62; see
42 U. S. C. § 12111(5) (to be covered by the Act, an employer
must have the requisite number of employees “for each
working day in each of 20 or more calendar weeks in the
current or preceding calendar year”). Beyond question, the
corporation would have been covered by the ADA had one
of the physician-shareholders sold his stake in the business
and become a “mere” employee. Yet such a change in own-
ership arrangements would not alter the magnitude of Clack-
amas’ operation: In both circumstances, the corporation
would have had at least 18 people on site doing the everyday
work of the clinic for the requisite number of weeks.
The Equal Employment Opportunity Commission’s ap-
proach, which the Court endorses, it is true, “excludes from
protection those who are most able to control the firm’s prac-
tices and who, as a consequence, are least vulnerable to the
discriminatory treatment prohibited by the Act.” Brief for

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Ginsburg, J., dissenting
United States et al. as Amici Curiae 11; see 42 U. S. C.
§§ 12111(8), 12112(a) (only “employees” are protected by the
ADA). As this dispute demonstrates, however, the determi-
nation whether the physician-shareholders are employees of
Clackamas affects not only whether they may sue under the
ADA, but also—and of far greater practical import—
whether employees like bookkeeper Deborah Anne Wells are
covered by the Act. Because the character of the relation-
ship between Clackamas and the doctors supplies no justifi-
cation for withholding from clerical worker Wells federal
protection against discrimination in the workplace, I would
affirm the judgment of the Court of Appeals.