An anesthesiologist, Ellis Richard Clark, won a $1.6 million verdict against Northbank Surgical Center, operating as Northbank Surgical Center, in Oregon.

Clark sued the center and SCA Health, which owns the center, and SCA Health's parent company, Optum, in April 2024. He alleged that on April 21, 2023, he objected to the way nurses managed anesthesia drugs after surgical center nurses allegedly refused to give propofol to a pediatric patient. The nurses allegedly questioned whether Clark was asking them to work outside their scope of practice.

Days later, on April 24, Clark allegedly reported his concerns to management and reported them to the Oregon Medical Board and the Oregon State Board of Nursing the next day.

Clark alleges he was fired on April 26, only days after making his reports. He argues that his reports were protected conduct, made for purposes of public safety.

Northbank attempted to argue that Clark's whistleblower claim could not succeed because he was not an "employee". The defense argued that the surgical center was "like a wedding rental space" and that Clark's work at Northbank as an anesthesiologist was "like an outside vendor", such as a photographer or caterer, who provides services at a wedding venue.

Northbank's CEO allegedly testified she was a Northbank employee, but later claimed Northbank had no employees and that all workers were employed by SCA Health.

Source: https://www.beckersasc.com/anesthesia/anesthesiologist-wins-1-6m-whistleblower-verdict-against-optum-affiliated-asc/

Commentary

In the above case, the healthcare organization attempted to argue that the anesthesiologist was never an employee. The CEO's conflicting statements regarding who employed whom and the nature of the plaintiff's status "being similar" to that of an outside vendor did not help the defense.

An organization's chosen labels do not settle the question regarding whether a worker is an employee or an independent contractor. Federal laws - enforced by both the IRS and the DOL - provide factors used to examine the working relationship to determine a worker's status.

No single factor determines status; the totality of the circumstances is considered. A title is not determinative. Calling a worker an independent contractor does not make it so under the Fair Labor Standards Act, even if that worker agrees to be classified as such. https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship

Legally, there is a presumption that workers are employees unless proven otherwise. Courts and regulatory agencies like the Department of Labor and the IRS use various tests - such as the economic realities test or the common law control test - to determine the correct classification. These tests assess factors like the degree of control the employer has over the worker, the worker's opportunity for profit or loss, and the permanency of the relationship.

The final takeaway is that obtaining a legal opinion before classifying a worker as an independent contractor is considered a best practice. Legal counsel can help ensure that the classification aligns with federal and state laws, reducing the risk of audits, lawsuits, and financial penalties.