Academic journal article The University of Memphis Law Review

Employment Law-Solon V. Kaplan: The Element of Control Is Paramount to Differentiating between Employers and Employees

Academic journal article The University of Memphis Law Review

Employment Law-Solon V. Kaplan: The Element of Control Is Paramount to Differentiating between Employers and Employees

Article excerpt

When an individual initially concludes that he or she has an actionable claim under a federal anti-discrimination statute, he or she likely does not consider the importance of and the consequences that stem from his or her employment status. Because it can potentially confer or strip a court of its jurisdiction, the determination of whether an individual is an employer or employee as a matter of law is critical to the viability of a claim alleging violations of a federal anti-discrimination statute.1 The battleground for distinguishing employers from employees has typically surfaced in "counting"2 and "claimant"3 cases, whereby claims stand or fall based on an individual's employment designation. The United States Supreme Court, attempting to resolve the conflict in the circuits and craft a uniform approach for deciding an individual's employment status, adopted a six-factor analysis emphasizing the element of control to distinguish employers from employees in Clackamas Gastroenterology Associates, P.C. v. Wells.4

Subsequent to the Supreme Court's decision, courts have abandoned their former approaches designed to differentiate employers from employees and have started applying the Clackamas six-factor test on a case-by-case basis. In Solon v. Kaplan,5 the Seventh Circuit Court of Appeals discarded its prior method for determining an individual's employment status and applied the sixfactor analysis to a claimant case. This comment will examine the Solon court's application of the Clackamas test, the court's lack of guidance and clarity in its employment of the test, and the resultant concerns and confusion that future litigants may encounter when trying to establish their individual employment status or defend against such claims. Although the Solon court's implementation of the Clackamas six-factor test properly emphasized the element of control, the court's analysis failed to address the significance of the factual findings in relation to one another and to the Clackamas factors. Moreover, the opinion did not provide an adequate framework addressing reasonably foreseeable questions which, if answered, would likely result in uniform and expeditious adjudication of these disputes.

Federal anti-discrimination statutes, such as Title VII, provide that employees6 may file suit against employers7 for "unlawful employment practice[s]."8 An employee may assert a Title VII claim only if the employer comes within the purview of the statute.9 Courts struggled, however, in distinguishing employees from employers when determining whether an individual can invoke, as an employee, the protection of a federal anti-discrimination statute and whether his position counts toward the fifteen-employee threshold.10 Consequently, prior to the Clackamas opinion, the circuit courts of appeals disagreed on the proper approach to use for differentiating employees from employers."

The "economic realities test," formerly applied by the First, Seventh, Eighth, and Eleventh Circuits, entailed a case-by-case, fact-specific analysis that examined the relationship between the individual and the business entity.12 Courts that embraced the economic realities test analyzed the reality of an individual's position within the business enterprise rather than the individual's job title.13 Prior to the advent of the economic realities test, disputes arose concerning the proper classification of partners.14 If a court found that a partner enjoyed such typical partnership benefits as management, profit and loss sharing, and voting rights, the court would usually find the partner to be an employer, not an employee.15 A sound example of a court noting such factors within the partnership employment context occurred in Burke v. Friedman.16 Although the Burke decision lacked a thorough analysis of the difference between a partner and an employee, the court's reliance on the definition of "partnership," which emphasized the management, ownership, and profit and loss sharing aspects of a partnership, served as the precursor to the economic realities test. …

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