Is a Shareholder An Employee for Purposes of Anti-Discrimination Laws ?
Recent federal court decisions have recognized that the mere fact that a person is a shareholder should not necessarily be used to determine whether she is an employee or a proprietor under antidiscrimination laws. In Clackamas Gastroenterology Assocs. v. Wells (538 U.S. 440, 123 S. Ct. 1673, 155 L. Ed. 2d 615), the Supreme Court eschewed categorical approaches and, instead, looked-to the common-law master servant relationship for guidance, stating that the common-law element of control is the principal guidepost that should be followed in evaluating whether a shareholder is an employee for purposes of antidiscrimination statutes (Id. at 448).
The Supreme Court ruled that the relevant inquiry is whether the individual acts independently and participates in managing the organization or whether she is subject to the organization's control (Id. at 449; see also, Rodal v. Anesthesia Group of Onondaga, 369 F3d 113, 123 [2d Cir]).