Bluestein v. Cent. Wis. Anesthesiology, S.C. (Summary)

DISCRIMINATION – GENDER AND DISABILITY

Bluestein v. Cent. Wis. Anesthesiology, S.C., Nos. 13-3724 et al. (7th Cir. Oct. 15, 2014)

The United States Court of Appeals for the Seventh Circuit affirmed a district court’s grant of summary judgment to an anesthesiology group in a discrimination lawsuit filed by a former shareholder and board member, who alleged that her termination by the group constituted illegal gender and disability discrimination.

Issues arose between an anesthesiologist, who was a full partner, shareholder, and member of the board of directors in a professional corporation providing anesthesia services, and her fellow shareholders after she was injured in a kayaking accident. Her resulting hamstring injury forced her to take time off from her anesthesiologist duties and eventually led her to request an open-ended leave from her fellow anesthesiologist-shareholders. The board of the anesthesiology group, which was comprised of all anesthesiologist-shareholders, voted to deny her request and instead gave her the option to resign. She refused to resign, was subsequently terminated, and then sued the anesthesiology group, alleging that her termination was based on her gender and disability status.

At trial, the court considered each discrimination claim on the merits, but ultimately ruled that she was not eligible for protection under either law because she did not meet the legal definition of “employee” and was, instead, akin to an employer under the statutes. In fact, the trial court regarded her lawsuit as so unreasonable that it ordered her to repay the anesthesiology group’s attorneys’ fees. The anesthesiologist appealed the decision.

On appeal, the appellate court upheld the trial court’s decision, agreeing with the trial court that, in applying the common law test used to define a “servant” under the law, the anesthesiologist-shareholder’s position and authority on the board gave her sufficient control over several key matters, including hiring and firing, which qualify her legally as an “employer” rather than an “employee.” The appellate court cited numerous other legal factors supporting this conclusion, including the fact that the shareholder was not subject to supervision in her work as an anesthesiologist and that she enjoyed an equal vote on all major decisions in the organization.  The appellate court also affirmed the trial court’s award of attorneys’ fees, concluding that the trial court had acted reasonably in concluding that her suit was “frivolous, unreasonable, and without foundation.” The appellate court did not require the shareholder to pay the anesthesiology group’s attorneys’ fees for the appeal itself, reasoning that while the appeal may have been driven by poor judgment, there was “no evidence of bad faith, harassment or obstinacy.”