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MALLARE v. ST. LUKE'S HOSP. OF BETHLEHEM

November 28, 1988

ANTONIO MALLARE, M.D., Plaintiff
v.
ST. LUKE'S HOSPITAL OF BETHLEHEM, Defendant



The opinion of the court was delivered by: TROUTMAN

 HONORABLE E. MAC TROUTMAN, SENIOR UNITED STATES DISTRICT JUDGE

 Plaintiff Antonio Mallare completed a medical residency program in Obstetrics/Gynecology at defendant St. Luke's Hospital of Bethlehem in June, 1983 and was subsequently denied staff privileges there. Alleging that defendant's failure to act favorably upon his application for privileges was due solely to discrimination against him based upon national origin, plaintiff filed a charge of employment discrimination with the Equal Employment Opportunity Commission pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. ยง 2000 e, et seq. After receiving a Notification of Right to Sue dated November 24, 1986, plaintiff filed this action on December 16, 1986.

 Defendant St. Luke's Hospital has now moved for summary judgment, arguing that there was no employment relationship between plaintiff and the hospital at the time staff privileges were denied, thereby foreclosing plaintiff's claim under Title VII. Moreover, according to defendant, the evidence adduced in preparation for trial reveals no discrimination in the denial of staff privileges to the plaintiff. Consequently, defendant contends, it is entitled to summary judgment even if the Court concludes that plaintiff has sufficiently demonstrated an employment relationship between himself and the hospital such that he is protected by Title VII.

 Defendant relies upon E.E.O.C. v. Zippo Manufacturing Co., 713 F.2d 32 (3d Cir. 1983) to support its argument that plaintiff's claim fails for want of an employment relationship under Title VII. In Zippo, the court set forth the test to be applied in determining whether the plaintiff was an employee of the defendant for purposes of maintaining a claim under the Age Discrimination in Employment Act (ADEA). Noting that, "The 'prohibitions of the ADEA were derived in haec verba from Title VII'.", the court concluded that, "The hybrid standard that combines the common law 'right to control' with the 'economic realities' as applied in Title VII cases is the correct standard for determining employee status under ADEA." 713 F.2d at 38 (Citation omitted).

 Thus, defendant argues, and we agree, that the proper standard to apply to the determination of employment status for Title VII purposes in this Circuit is the hybrid standard described in Zippo in which the Court takes into account the economic realities of the situation presented but focuses on the employer's right to control the employee. In Zippo, the court also listed eleven factors which should be considered in reaching a decision as to the ultimate determinant of employment status, viz., the extent to which the employer has the right to control 'the means and manner' of the ostensible employee's performance of the job. Id. at 37.

 Relating the standard and applying it, however, involve vastly different levels of difficulty, no matter how straightforward said standard may appear. This observation is well illustrated by the more recent case of Martin v. United Way of Erie County, 829 F.2d 445 (3d Cir. 1987). There the court was attempting to determine whether the United Way had the statutory minimum number of employees necessary to afford plaintiff the protections of Title VII and the Age Discrimination in Employment Act. The inquiry focused on whether two individuals who worked at the United Way office were actually employees of United Way for Title VII purposes. Although explicitly applying the Zippo factors, the court held that it was unable to determine, as a matter of law, whether the two individuals should be classified as employees. Rather, the court concluded that the determination was a matter for the jury, despite the facts that: neither employee was paid by United Way; neither received from United Way fringe benefits or vacations; United Way withheld no sums from either worker's paycheck for social security or income taxes. Moreover, one of the employees in question had actually been hired and was paid, supervised and disciplined by another agency, having been placed at United Way by the other agency as part of a sponsor agency/host agency agreement in which United Way served as the host. Facts sufficient to create a jury issue with respect to the employment status of that individual included United Way's responsibilities for providing to her a job description, orientation and training, as well as keeping, for her, time and attendance records, activity reports and evaluations. The other individual was required to work a specified number of hours weekly and to keep records thereof. Both putative employees were also interviewed and supervised by United Way employees and were provided with office space and support staff by United Way. Having weighed these various factors, the court was unable to determine conclusively the extent to which United Way controlled the means and manner of those individuals' performance so as to classify them as employees or independent contractors. Hence, the case was remanded to the district court for a jury determination of the employment status of the two individuals, so that the court could ascertain whether United Way met the statutory minimum number of employees.

 It is in light of the Court of Appeals' attempt to apply the Zippo factors in Martin that we, too, must attempt their application here. As in Martin, some of the factors indicating control and, hence, employee status are present while others are absent. Here, as in Martin, the putative employer furnishes the equipment used and the place of work, insofar as work at the hospital is concerned. Likewise, the services performed by doctors at the hospital are an integral part of the business of the hospital. On the other hand, as in Martin, the putative hospital/employer does not pay the doctor/employee, nor does it withhold social security or income taxes, afford him annual leave, retirement benefits or any other fringe benefits typically offered in an employment relationship. The doctor is not supervised by hospital personnel, once training has been completed, and is engaged in a highly skilled occupation.

 The three remaining Zippo factors, length of time the "employee" has worked, the manner of terminating the work relationship and the intention of the parties, do not readily fit the situation presented here. As in any Title VII case, length of service is meaningless when the claim is failure to enter into an employment relationship rather than a discriminatory discharge. With respect to termination of the relationship, the record is silent as to the manner of termination of staff privileges at St. Luke's. Presumably, however, once conferred, the privilege of practicing at the hospital cannot be terminated without notice and an explanation to the affected doctor. As to intention, it seems fairly clear that most doctors would not consider themselves employees of the hospitals at which they maintain staff privileges.

 Thus, a simple counting of the eleven enumerated factors in the context of a doctor/hospital relationship would seem to weigh somewhat more heavily in favor of no employment relationship. We must keep in mind, however, that the factors themselves are mere aids in determining the ultimate question of control of the means and manner of the "employee's" job performance and that the Court is also required to consider the economic realities of the situation. When those general principles are also weighed in the balance, the question of the existence of an employment relationship for Title VII purposes becomes much closer. While control over the manner of job performance in the sense of supervision of discrete tasks is missing, ultimate control can be exercised by a hospital in the sense that privileges can be withdrawn if a doctor's performance does not comport with hospital standards. Certainly, the withholding or withdrawal of staff privileges allows a hospital to control the means of a doctor's job performance to the extent that the work must be performed in a hospital setting, using hospital equipment and support staff.

 Similarly, the consideration of economic realities adds to the balance on the side of Title VII coverage. A doctor who practices surgery or expects to deliver babies depends upon access to a hospital for his patients and is unlikely to attract many patients without such access. Where, as here, there is only one hospital in the area in which the doctor expects to practice, denial of staff privileges there severely limits, if it does not completely foreclose, the opportunity to develop a full practice in obstetrics/gynecology.

 Upon consideration of all relevant factors, we conclude, as did the court in Martin, that we cannot say, as a matter of law, that the defendant is not the prospective "employer" of the plaintiff under the circumstances here present. Thus, following the lead of the Court of Appeals in Martin, we will reserve this question for jury determination at trial as an issue of fact. *fn1"

 There is an additional factor relating to employment status here which merits our consideration as well. Plaintiff alleged and testified that it was understood, during his employment as a resident physician in the defendant hospital, that staff privileges would be granted, if he so desired, upon successful completion of the residency program.

 In Hishon v. King & Spalding, 467 U.S. 69, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984), the Supreme Court held that such a promise could be considered a term, condition or privilege of employment for ...


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