Opinion
No. 99 C 8088.
October 6, 2000.
MEMORANDUM AND ORDER
This matter is before the Court on Defendant's Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. Plaintiff sued Defendant under Title VII of the Civil Rights Act of 1964, as amended, ("Title VII"), 42 U.S.C. § 2000e et seq. (West 2000), claiming that Defendant discriminated against him on the grounds of national origin and gender, and retaliated against him for filing a claim with the Equal Employment Opportunity Commission ("EEOC"). Because the Court finds that Plaintiff was an independent contractor and not an employee of Defendant, the Court grants Defendant's Motion for Summary Judgment, and dismisses with prejudice Plaintiff's Complaint.
FACTS
The critical issue raised by this case is whether Plaintiff Valery Sulkin, M.D. ("Dr. Sulkin") was an independent contractor or employee of Defendant Chicago Transit Authority ("CTA"). Dr. Sulkin provided medical services out of CTA's Medical Department between May 1994 and September 1999. (Defendant'S 56.1(a) Statement of Material Facts ["Def.'s 56.1(a)"] ¶ 2.) Dr. Sulkin's primary responsibility was to perform medical examinations to determine the fitness of CTA employees for particular jobs. (Def.'s 56.1(a) ¶ 14, 34.) Dr. Sulkin worked three days a week for the CTA from May 1994 to March 1996, and worked five days a week from March 1996 to his termination of employment in September 1999. ( Id. at ¶¶ 16, 43.) CTA paid Dr. Sulkin on a per diem basis at the agreedupon hourly rate of forty dollars per hour. ( Id. at ¶¶ l5, 16.)
Dr. Sulkin was educated and trained as a medical doctor in Leningrad, and practiced as a physician in the U.S.S.R. between 1967 and 1979. After moving to the United States in 1979, he became licensed to practice medicine in the United States (Florida and Illinois) in 1987. (Def.'s 56.1(a) ¶¶ 4-8.)
Except for his hourly pay rate, Dr. Sulkin did not receive any employee benefits, and was not otherwise treated as a CTA employee. In contrast to CTA employees, Dr. Sulkin received his compensation through CTA's Account Payable Department (and not CTA's Payroll Department), and did not receive any paid vacations, holidays, or sick days all throughout his tenure with CTA. ( Id. at ¶¶ 22, 27, 31, 32.) Furthermore, CTA did not provide Dr. Sulkin with any form of insurance or pay for his licensing fees, did not allow him to participate in CTA's pension program, and did not restrict his ability to practice medicine away from the CTA, although the CTA did have rules and restrictions on secondary employment for CTA employees. ( Id. at ¶¶ 24, 27, 39.) Indeed, for parts of 1994 and 1995, Dr. Sulkin worked as a physician at Health First and Thorek Hospital, in addition to working three days a week for the CTA. ( Id. at ¶¶ 15, 40, 41.) Additionally, CTA withheld no taxes from Dr. Sulkin's compensation and issued him an IRS Form 1099 (and not a Form W-2) at the conclusion of the year. ( Id. at ¶ 33.)
Upon hire, all new CTA employees are assigned an employee identification number, are given CTA's General Rule Book, Code of Ethics, and a written statement of job title, salary, and start date, and are required to complete various forms concerning secondary employment, immigration status, and tax withholdings. (Def.'s 56.1(a) ¶ 20.) significantly, none of these processes, actions or requirements, applied to Dr. Sulkin. ( Id. at ¶ 23.)
The CTA had similar arrangements with other contract physicians, and indeed only had one physician, Dr. Irma Realiza, CTA's Medical Director, who received employee benefits and was otherwise treated as an employee. ( Id. at ¶¶ 17, 25, 27.)
Employers utilize IRS Form 1099 to report non-employee compensation to the Internal Revenue Service ("IRS"). Form 1099 is not utilized by employers to report employee income. (Def.'s 56.1(a) ¶ 11.)
Despite the fact that Dr. Sulkin did not receive employee benefits and was not treated as an employee for tax purposes, Dr. Sulkin maintains that he was indeed an employee, primarily because the CTA controlled and directed the details of his work, as illustrated by CTA's Medical Guidelines that it gave him in October 1994, and again in March 1996. (Plaintiff's Memorandum in Opposition to Defendant's Rule 56 Motion to Dismiss ["Pl.'s Mem.") at p. 4.; Def.'s Rule 56.1(a) ¶ 35, 36.) Dr. Sulkin contends that these guidelines controlled the work he was to perform, including directions in scheduling and procedures. (Pl.'s Mem. at p. 4.) While the CTA acknowledges that it did provide guidelines to its contract physicians, it claims that these guidelines did not interfere with the contract physicians' professional judgment, but rather only established the bureaucratic and administrative processes by which employees being seen by CTA' s medical department were to be processed. (CTA's Reply Brief at p. 4.)
In addition to CTA's treatment of Dr. Sulkin as an independent contractor, Dr. Sulkin referred to himself as an independent contractor, as evidenced by his efforts in trying to obtain status as a CTA employee with benefits. For instance, in August 1997, Dr. Sulkin applied for a position with "benefits for employee status [sic]." ( Id. at ¶ 45.) Furthermore, in January and February 1998, Dr. Sulkin met with Mr. Charles Anderson, III, the General Manager of CTA's Benefit Services, and Dr. Realiza, to discuss Plaintiff's request to become a CTA employee. ( Id. at ¶ 46.) Mr. Anderson informed Dr. Sulkin that the budget did not support hiring him as a CTA employee. ( Id. at ¶ 48.) Finally, in October 1998, Dr. Sulkin mailed a letter to his United States Congressman, Honorable Sidney R. Yates, writing, in part:
I was employed as an independent contractor by Chicago Transit Authority in May 1994. Since approximately March of 1996, Chicago Transit Authority started to utilize my services and expertise on a full time basis — "40 hrs per week".
In March-April of 1997, knowing that Medical Department was in need of Physicians, I applied for permanent status, hoping to obtain medical insurance and other benefits as permanent full-time employee.
( Id. at ¶ 49.) After Congressman Yates wrote a letter to the CTA on behalf of Dr. Sulkin, CTA Chairman Valerie B. Jarrett responded to Congressman Yates in December 1998 that Dr. Sulkin had not been offered full-time employment, because no full-time position was available and, furthermore, one had not been budgeted for in 1999. ( Id. at ¶¶ 50, 51.) Eventually, in September 1999, CTA terminated Dr. Sulkin's contract, stating that it had contracted out certain medical services to another provider, and consequently was reducing its number of contract physicians. ( Id. at ¶ 59.)
PROCEDURAL HISTORY
On August 5, 1999, Dr. Sulkin filed a charge with the EEOC, alleging sex and national origin discrimination in violation of Title VII. (Plaintiff's Complaint ["Pl.'s Comp."] at Exhibit A.) In his charge, Dr. Sulkin stated that Dr. Realiza told him that he would be terminated as of September 1, 1999. ( Id.) On September 17, 1999, the CTA terminated Dr. Sulkin's contract. On September 22, 1999, Dr. Sulkin filed a second charge with the EEOC, alleging retaliation for his filing the first charge with the EEOC on August 5, 1999. ( Id. at Exhibit B.) On or about September 17, 1999, Dr. Sulkin received his right to sue letter from the EEOC for his federal discrimination charges. ( Id. at Exhibit C.) On or about October 21, 1999, Dr. Sulkin received his right to sue letter from the United States Department of Justice for his subsequent retaliation charge. ( Id. at Exhibit D.)
Dr. Sulkin filed a three-count Complaint against the CTA in federal court on December 13, 1999. His Complaint alleges that the CTA discriminated against him in violation of Title VII on the grounds of national origin and gender, and retaliated against him for filing a claim with the EEOC. On April 7, 2000, upon petition made by the parties in their Rule 26(f) report of parties' planning conference, the Court bifurcated discovery in two phases: (1) whether or not Dr. Sulkin was an employee of the CTA; and (2) whether or not Dr. Sulkin's claims of discrimination and retaliation have a basis in fact. On July 24, 2000, Defendant submitted its Motion for Summary Judgment with respect to phase one concerning whether or not Dr. Sulkin was an employee of the CTA.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when "there is no genuine issue as to any material fact, and . . . the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). In reviewing a motion for summary judgment, the Court must view the record and draw all inferences in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The moving party has the initial burden of demonstrating that no evidence exists to support the non-moving party's contentions. Doe v. R. R. Donnelly Sons Co., 42 F.3d 439, 443 (7th Cir. 1994). The non-moving party may not rest on her pleadings, but must affirmatively demonstrate, by specific allegations, that a genuine issue of material fact exists which requires a jury trial. Celotex Corp. v. Cartrett, 477 U.S. 317, 323-24 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (the non-movant must do more than simply "show that there is some metaphysical doubt as to the material facts.")
As pointed out by Defendant in its Motion to Strike, Plaintiff did not comply with Local Rule 56.1(b), which requires a non-moving party who submits an additional statement of facts to include in it "references to the affidavits, parts of the record, and other supporting materials relied upon." See Walker v. Doctors Hosp. of Hyde Park, 98 C 2291, 2000 WL 1221530, at *4-5 (N.D. Ill. Aug. 21, 2000). Here, plaintiff's Additional Statement of Undisputed Facts ("Pl.'s Facts") unequivocally states conclusions, and neither refers to facts nor specific citations to the record. For instance, paragraph 1 states, "Plaintiff's function as a Medical Examiner was controlled by Defendant's Guidelines." Yet, plaintiff fails to cite specific guidelines which support its conclusion, and instead cites the entire document. Moreover, paragraph 4 reads in its entirety, "Plaintiff's Affidavit (Plt. Facts, Exhibit D)" and does not even refer to any facts. Finally, in paragraphs 5 and 6, Plaintiff refers to a purported decision by the Illinois Department of Employment Security and a preliminary ruling by the Internal Revenue Service. Not only are these documents not accompanied by any evidentiary cite, they are hearsay and lack foundation. See Martz v. Union Labor Life Ins. Co, 757 F.2d 135, 138 (7th Cir. 1985) ("When a party seeks to offer evidence through other exhibits, they must be identified by affidavit or otherwise made admissible in evidence.")
Notwithstanding Plaintiff's abysmal compliance with Local Rule 56.1, the Court has gone to great lengths to assess Dr. Sulkin's case on its merits, and has accordingly combed through the record to find facts which would support his argument that he was an employee of the CTA. Despite the Court's efforts, and as explained in this opinion, the Court, nonetheless, finds that, as a matter of law, Dr. Sulkin was an independent contractor.
ANALYSIS
To maintain a cause of action under Title VII, a plaintiff must prove the existence of an employment relationship. Knight v. United Farm Bureau Mut. Ins. Co., 950 F.2d 377, 380 (7th Cir. 1991.) Independent contractors are not protected by Title VII. Id.; see also Jones v. Seko Messenger, Inc., 955 F. Supp. 931, 932 (N.D. Ill. 1997). Title VII broadly defines "employee" as "an individual employed by an employer." 42 U.S.C. § 2000e(f). In determining whether a business relationship is one of employee-employer, the Seventh Circuit looks to the "economic realities" of the work relationship. Knight, 950 F.2d at 380.
Under Knight, and more recently under Ost v. West Suburban Travelers Limousine, Inc., 88 F.3d 435, 438 (7th Cir. 1996) and Alexander v. Rush North Shore Medical Center, 101 F.3d 487, 492 (7th Cir. 1996), the Seventh Circuit instructs courts to apply a five-factor test to determine whether a party is an independent contractor or an employee for Title VII purposes. These factors include:
(1) the extent of the employer's control and supervision over the worker, including directions on scheduling and performance of work;
(2) the kind of occupation and nature of skill required, including whether skills are obtained in the workplace;
(3) responsibility for the costs of operation, such as equipment, supplies, fees, licenses, workplace, and maintenance of operations;
(4) method and form of payment and benefits; and
(5) length of job commitment and/or expectations.
See Ost, 88 F.3d at 438 (citing Knight, 950 F.2d at 378-79).
Under the Seventh Circuit's framework, the Court concludes that Plaintiff was an independent contractor and, therefore, is not protected under Title VII. The Court's application of this five-prong test is set forth below.
A. Extent of Defendant's Control and Supervision Over Plaintiff.
This first factor examines the amount of control and supervision that the CTA had over Dr. Sulkin's work. "If an employer has the right to control and direct the work of an individual, not only as to the result to be achieved, but also as to the details by which that result is achieved, an employer/employee relationship is likely to exist." Ost, 88 F.3d at 439 (citation omitted); see also Alexander, 101 F.3d at 492-93. In the context of medical professionals, the Seventh Circuit looks at whether physicians retain sufficient discretion to exercise their own professional judgment as to what is in their patients' best interest. Alexander, 101 F.3d at 493.
Of the five factors, the "right of control" that the CTA had over Dr. Sulkin is the strongest factor supporting Dr. Sulkin's position that he was an employee and not an independent contractor. Both parties agree that the CTA issued guidelines to Dr. Sulkin, as well as to the other contract physicians. The question raised by these guidelines is whether they controlled Dr. Sulkin's discretion and his professional judgment, or whether they simply established bureaucratic or administrative processes. While Plaintiff failed to cite specific guidelines in his Additional Statement of Undisputed Facts, and instead just asserted that the guidelines "controlled" Plaintiff, the Court has carefully examined the specific guidelines, and concluded that, generally, they did not interfere with Dr. Sulkin's (or the other contract physicians') medical discretion, and instead just established the administrative process for employees being seen in CTA's medical department.
Overall, the guidelines delineate specific procedures for the examinations of new hires, disabled employees, ironworkers, college students, and bus operators. (Pl.'s Facts at Exhibit B, Sec.II.) For instance, the guidelines inform CTA physicians of the specific tests that should be performed on new employees (e.g. vision, audiogram, urine, drug, Ekg) and the information that needs to be documented. ( Id. at Exhibit B, Sec.II.) The guidelines also specify which procedures should be used for certain disabilities and positive drug results. For example, for disabilities due to myocardial infarction, coronary bypass, angina or angioplasty, the physician should request a cardiologist report and stress test result. ( Id. at Exhibit A, Sec.II.D.) When an employee has been found to be positive for drugs or alcohol, the employee's manager should be informed that the employee is unfit. (Pl.'s Facts at Exhibit A, Sec.I.) The guidelines further state that, for disability claims, the medical history and physical examinations should be "comprehensive." ( Id. at Sec.II.)
Despite these details, there does not appear to be significant interference with the physicians' discretion in performing physical examinations or medical tests. Indeed, the guidelines state in several places that the physician should take a medical history and perform a physical, without explaining how to take a physical or perform medical tests. ( Id. at Exhibit A, Sec.II., IV., V., Exhibit B, Sec.I) Furthermore, the guidelines state that the physicians should make decisions based upon their "own judgment" (id. at Exhibit A, Sec.II.A Exhibit B, Sec.I.29), should determine whether an employee's absence was reasonable in light of the diagnosed condition, and should, if necessary, disagree with the employee's treating physician's diagnosis. ( Id. at Exhibit B, Sec.I.25-26.)
Plaintiff argues that the level of details over the medical and reporting procedures, coupled with CTA's control over his location of work, hours, and CTA's assignment of his patients, illustrates that Dr. Sulkin was an employee of the CTA. The Court disagrees. First, the Court finds that generally, under the guidelines, the CTA physicians have independent discretion to confirm employees' medical conditions, report whether they are unfit to perform their job duties, and decide whether any disability is permanent or temporary. While the guidelines do coordinate administrative and bureaucratic processes, and list the type of tests associated with different medical problems, the Court finds that such detail does not rise to the level of control that merits a finding of employee status. See Romano v. HWCC Development Corp., No. 97 C 1344, 1998 WL 526569, at *5 (N.D. Ill. Aug. 17, 1998) ("While all of Plaintiffs' duties involved general coordination by Defendants, Plaintiffs had the ability to control how they accomplished those tasks."), aff'd, 202 F.3d 274 (7th Cir. 1999); Hollingsworth-Hanlon v. AFC, No. 97 C 6841, 1998 WL 341630, at *4 (N.D. Ill. June 24, 1998) (finding that Defendant's policy involved ordinary administrative procedures that had little effect on Plaintiff's ultimate control over her work).
Second, while the CTA controlled the location of where Dr. Sulkin worked, his hours, and assigned him patients, such facts do not sufficiently establish that the CTA "controlled" Plaintiff. See Alexander, 101 F.3d at 493 (recognizing that, while doctor was on call for certain prescribed hours and hospital assigned him patients, such minimal control by hospital did not outweigh doctor's reliance upon his own professional skills); Vakharia v. Little Company Of Mary Hospital Health Care Centers, 2 F. Supp.2d 1028, 1031 (N.D. Ill. 1998) (holding that, even though doctor was subject to hospital's on-call work schedule and assignment of patients, such factors did not support a finding that doctor was hospital's employee). Accordingly, the Court finds that the "right to control" factor weighs in favor of finding that Plaintiff was an independent contractor. B. The Nature of Occupation and Skill Required.
Although Plaintiff claims that the CTA made him adhere to a strict work schedule, Plaintiff did not refute that the CTA never disciplined him when he did not meet the hours requested of him. See Def.'s 56.1(a) at ¶ 29.
While courts in the Seventh Circuit have noted that the employer's control over the individual is the most important factor, they have also noted that no one factor is controlling. Aberman v. J. Aboucher Sons, Inc., No. 95 C 5423, 1997 WL 51601, at *3 (N.D. 111. Feb. 4, 1997) (citation omitted). Since the other factors clearly establish that Dr. Sulkin was an independent contractor, the Court finds that, even if it were to conclude that the CTA's guidelines restricted Dr. Sulkin's professional judgment, its overall conclusion would still be the same.
In evaluating the second factor, courts look to whether a position requires special skills. Romano, 1998 WL 526569, at *5 (citation omitted). A determination that a position does not require special skills weighs in favor of finding an employee/employer relationship. Id. An employee/employer relationship is presumed where an employer provides training for its employees in order for them to obtain the special skills required by the position. Id. Courts in the Seventh Circuit have concluded that the special training and skills of physicians support the conclusion they are not employees under Title VII. See Vakharia, 2 F. Supp.2d at 1031 (finding that physician's possession of significant skills supports conclusion that physician was independent contractor); Alexander, 101 F.3d at 493 (same).
Although acknowledging that he was trained as a physician before contracting with the CTA, Plaintiff contends that, while working for the CTA, he did not prescribe medicine, did not treat CTA employees for their medical needs, and did not offer advice regarding the severity or treatment of CTA's employees' medical problems. Rather, Plaintiff maintains that he merely conducted rigidly prescribed tests to determine the physical condition of the employee and/or whether there was any substance abuse. Consequently, Plaintiff insinuates that his specialized skills were not needed by the CTA.
While Plaintiff's characterization of his job might be accurate, the Court, nonetheless, finds that the CTA hired contract physicians — not nurses or medical technicians — to perform physicals and medical tests. CTA needed physicians to use their professional judgment to decide whether an employee was fit for work, or whether an employee's disability prevented him from doing his job. If the CTA did not need physicians, it would presumably not have hired them. Accordingly, the Court finds that Dr. Sulkin's special skills weigh in favor of finding him an independent contractor. C. Responsibility of Costs and Maintenance of Operation.
Of the five factors, the Court notes this second factor of "specialized skills" to be the least helpful in the medical professional context. Indeed, a physician with specialized skills could be an employee (as Dr. Realiza was) or an independent contractor, as were the physicians in Alexander and Vakharia. See, e.g., Jenson v. Illinois Department of Corrections, No. 97 C. 50198, 1999 WL 218561, at *3 (N.D. Ill. April 6, 1999) ("The second factor does not contribute to a finding of either independent contractor or employer status because nurses in general could be either independent contractors or employees.").
This third factor involves an examination of which party bore responsibility for the costs of operation, such as equipment, supplies, fees, licenses, and the overall workplace. Alexander, 101 F.3d at 492. As with the physicians in Alexander and Vakharia, who worked at a hospital and used its equipment, Dr. Sulkin similarly practiced medicine at CTA's facilities and used its supplies. Nevertheless, as were the doctors in Alexander and Vakharia, Dr. Sulkin was responsible for certain costs related to his business, such as maintaining his professional license and medical insurance (if he felt he needed it). In addition, Dr. Sulkin was responsible for paying all taxes arising from his relationship with the CTA. While a close call, the Court finds that this factor weighs in favor of concluding that Dr. Sulkin was an independent contractor.
Plaintiff argues that he did not need medical insurance at the CTA, because he was not practicing traditional medicine. Nonetheless, when Plaintiff worked for other entities ( e.g. Thorek Hospital and Health First) while working for the CTA, he bought medical insurance. See Plaintiff's affidavit, ¶¶ 7, 8. The overriding point is that the CTA left it to Plaintiff to decide whether he needed to purchase insurance.
D. Method and Form of Payment and Benefits.
The Northern District of Illinois has found an independent contractor relationship to exist where the plaintiff was given no benefits, taxes were not withheld from the plaintiff's pay check, and the plaintiff did not list the employer on his tax return. See Aberman, 1997 WL 51601, at *2-3; see also Jones, 955 F. Supp. at 934 (finding that Defendant's method of payment to Plaintiff "conclusively established [Plaintiff's] status as an independent contractor.")
In the case sub judice, it is the method and form of payment and benefits that is most revealing about the nature of the working relationship between the parties. Indeed, the evidence before the Court concerning Dr. Sulkin's lack of employee benefits and tax treatment is extensive and undisputed. While Plaintiff claims that he had no choice about whether he was to receive employee benefits or his tax treatment as an independent contractor, this assertion, while perhaps true, is nonetheless irrelevant. The overriding, undisputed fact is that Plaintiff received no sick pay, vacation pay, health insurance, or retirement and pension benefits, all throughout his tenure with the CTA. Consequently, the Court finds that the objective evidence regarding the method and form of payment and benefits conclusively establishes that the Plaintiff was an independent contractor.
E. Length of Job Commitment and/or Expectations.
This last factor also supports a conclusion that Dr. Sulkin was an independent contractor. This final factor concerns the length of the parties' commitment to the relationship or, in the absence of a commitment, the expectations of the parties. Longterm, exclusive relationships are associated with employer/employee status. See, e.g., Jones, 955 F. Supp. at 934. Conversely, a relationship where the Plaintiff is allowed to work for other companies is indicative of independent contractor status. See, e.g., Alexander, 101 F.3d at 493.
In this case, the CTA did not restrict its contract physicians' ability to work for other companies, although the CTA did have restrictions on secondary employment for its employees. Indeed, Dr. Sulkin worked for two other companies while working for the CTA in 1994 and 1995. While Dr. Sulkin maintains that in 1996, when he began to work for the CTA forty hours a week, he did not have time to work for other companies, he, nonetheless, was not restricted by the CTA.
Furthermore, Dr. Sulkin clearly thought of himself as an independent contractor, as evidenced by his quest to become a full-time employee with employee benefits. In fact, Dr. Sulkin wrote his Congressman, stating that he was an independent contractor and wanted to become an employee of the CTA. This admission unequivocally shows that Dr. Sulkin's understanding of his arrangement with the CTA was one of an independent contractor — not employee/employer. While Dr. Sulkin's attempt to become an employee with benefits is understandable, especially considering he was working forty hours a week for the CTA from 1996-1999, Dr. Sulkin essentially "pleaded himself out of court" by admitting that he was an independent contractor. See Vakharia, 2 F. Supp.2d at 1031 (finding that where plaintiff admitted she was treated as "a part-time `as needed' anesthesiologist", she "pleaded herself out of court.").
CONCLUSION
After analyzing each of the elements as required by the Seventh Circuit, the Court concludes that the CTA only had minimal control over Dr. Sulkin, and that this control did not rise to the level of establishing an employer-employee relationship. Even if the CTA did control Dr. Sulkin's work activities (by the guidelines), the overall evidence still weighs in favor of an independent contractor relationship. Therefore, for the foregoing reasons, the Court grants Defendant's Motion for Summary Judgment, and dismisses Plaintiff's three-count Complaint.
IT IS THEREFORE ORDERED that:
Defendant's Motion for Summary Judgment, be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that:
Plaintiff's Complaint, be, and the same hereby is, DISMISSED WITH PREJUDICE.