Some Independent Contractors May be Eligible to File Discrimination Claims Under State Civil Rights Law
Overturning precedent, on March 28, 2007, the Michigan Supreme Court has opened the door for physicians having staff privileges to sue hospitals and chiefs of staff for discrimination in violation of the Elliott-Larsen Civil Rights Act (ELCRA) under its “public accommodations” provision. This ruling may have far broader consequences than apparent at first blush and may provide a cause of action under the ELCRA to independent contractors.
In Haynes v Neshewat, et al., Dr. Haynes, an African-American physician with staff privileges at Oakwood Hospital-Seaway Center, claimed that he had been treated differently than other, similarly situated physicians because of his race. Specifically, he claimed that he had been subjected to “excessive charges of unprofessional behavior and administrative hearings designed to discourage him from using the facilities at Oakwood.” As a result, Dr. Haynes alleged that he was deprived of the “ability and opportunity to fully utilize the medical facilities” in violation of the ELCRA.
Since he was not an employee of the hospital, to prove his claim, Dr. Haynes needed to establish, among other things, that he was discriminated against (1) because of a protected status, (2) by a person, (3) resulting in the denial of the full and equal enjoyment of goods, services, facilities, privileges, advantages or accommodations, (4) of a place of “public accommodation.” The court quickly found that staff privileges are a right or benefit protected by the act, and then focused on the more interesting issue of whether the hospital qualified as a place of public accommodation for purposes of Dr. Haynes’ claim.
The hospital argued that, while it clearly provides services to the public, Dr. Haynes’ was not a member of the public and that his ability to practice medicine was not a privilege the hospital offers to the public. The Supreme Court rejected those arguments, concluding that the ELCRA does not require that the services, facilities, privileges or advantages at issue be offered to the public or that the plaintiff be a member of the public. The court held that the ELCRA “forbids unlawful discrimination against any individual in a place of public accommodation, not just against members of the public.” As a result, Dr. Haynes will be permitted to proceed with his discrimination claim against both the hospital and the chief of staff.
A potential extension of the holding above could provide a cause of action to independent contractors who, in the past, have been unable to bring claims under the ELCRA against the company utilizing their services because they could not state a claim under the “employment” provisions of the act. Now, however, independent contractors whose services are furnished at “a place of public accommodation” may be able to rely on the holding of Haynes and bring a discrimination claim under the public accommodation provision of the act. The ELCRA provides broad relief to a successful plaintiff, including emotional distress damages and attorneys’ fees.
For a complete copy of the Michigan Supreme Court ruling in Haynes v Neshewat, et al., docket number 129206 (dated 3/28/07), click here.
DOL SAYS ALL ‘GROUP HEALTH BENEFITS’ MUST BE AVAILABLE TO EMPLOYEES ON FAMILY AND MEDICAL LEAVE
Under the Family and Medical Leave Act (FMLA), employers are required to allow employees to continue receiving benefits under a “group health plan” while out on a FMLA leave of absence. However, other benefits can be suspended, provided that coverage is restored without any waiting period upon the employee’s return to work. It has long been believed that this meant that only the employee’s medical insurance had to be maintained and other benefits, such as dental or optical insurance, could be suspended. That was the position a school district took, but the union disagreed. Now, the U.S. Department of Labor (DOL) has weighed in, and its answer has surprised many.
When both the school district and union asked the DOL for an opinion letter regarding the “other benefits” issue, it looked to the Internal Revenue Code’s definition of the term “group health plan.” That definition broadly included any plan of, or contributed to by, an employer to provide healthcare to current or former employees or their families, including plans that are self-insured. Since the school district paid a percentage of the treatment cost for dental care, including diagnostic and preventive oral services, endodontics, periodontics and basic dental services, the dental plan was found to fall within the broad definition of “group health plan.”
The DOL explained that, under FMLA, there is a limited exception to the term if:
· The employer made no contribution to the plan;
· Participation in the program by employees was completely voluntary;
· The sole function of the employer, with regard to the plan, was to allow the insurer to seek employee enrolments, and collect and remit premiums;
· The employer received no more than reasonable consideration for administrative costs; and
· Premiums did not increase when employment terminated.
Therefore, the DOL found that the school district’s employees had to be allowed to continue their dental insurance while on FMLA leave. In addition, since the school district provided coverage for employees for each school year for a full 12 months, including summer break, coverage had to be maintained even when the employee’s 12-week leave continued into the summer break.
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