High court to rule on disabilities case

By Greg Stohr
Bloomberg News Service

WASHINGTON — The U.S. Supreme Court has agreed to consider whether thousands of small businesses are bound by the Americans with Disabilities Act and other federal job-discrimination statutes.

The justices will hear an appeal by an Oregon medical clinic that says it is exempt from the disabilities law because it has fewer than 15 employees. Clackamas Gastroenterology Associates contends an appeals court was wrong to count as employees the four doctors who own the business.

The case will affect the rights of workers across the country. Almost 430,000 employers have 15 to 19 workers, according to U.S. Small Business Administration statistics.

Those companies "are likely to find themselves caught in the gray zone between small and large employer categories created by the ADA," the clinic said in urging the Supreme Court to hear the case.

Without the four doctors, Clackamas Gastroenterology would have only 13 or 14 employees. The clinic argues that the four doctors should be treated as partners, even though their business is set up as a corporation rather than a partnership.

Under the Americans with Disabilities Act, partners don't count toward the 15-employee threshold. Other federal discrimination statutes have similar rules.

The clinic is fighting a suit by former employee Deborah Anne Wells, who suffers from a debilitating condition known as mixed connective tissue disorder. Wells says Clackamas Gastroenterology trans-ferred her to a receptionist position in the office, where she was unable to work, then fired her when she refused to report.

The Americans with Disabilities Act requires employers to make "reasonable accommodations" so that disabled workers can hold down jobs.

Wells argues that the doctors opted not to organize as a partnership, which carries greater risk of personal liability than a corporation, and must accept the consequences of that decision.

"Having elected to exist as a corporation, with corporate employees rather than partners," the clinic "should be held to that election," Wells said in court papers.

The San Francisco-based 9th U.S. Circuit Court of Appeals voted 2-1 to let Wells' suit go forward. The panel rejected a request by the clinic to apply an "economics realities" test to determine whether the doctors are more like employees or partners.

The 9th Circuit ruling "exalts form over substance," the clinic argued in its appeal.

The justices will rule by the end of June 2003 in the case, Clackamas Gastroenterology Associates v. Wells, 01-1435.