LOKEN, Circuit Judge.
Pathologist Larry Alexander suffered a heart attack in March 2008, underwent a heart transplant in May 2009, and was hospitalized for bipolar disorder in October 2010. In August 2011, Avera St. Luke's, a non-profit corporation operating St. Luke's Hospital in Aberdeen, South Dakota, terminated its December 2008 Pathology
Dr. Alexander's relationship with Avera began in January 1991, when he entered into a Contract for Professional Services with another pathologist, Dr. Roy Burt, who had entered into an exclusive agreement to provide Avera "all of Hospital's necessary pathological services and provide the medical direction and supervision of the Department of Pathology." The Contract with Burt expressly provided that Alexander "shall apply for and become a member of the Hospital's medical staff; that the services Alexander would provide under the Contract are those of "a professional physician working as an independent contractor," not as an employee of Burt; that Burt would have no authority to control the manner in which Alexander performed his pathology services; that Alexander, not Burt, would pay all applicable federal and state taxes and withholdings, including social security taxes; and that Alexander would secure and maintain professional liability insurance in prescribed amounts.
In 1994, at Burt's suggestion, Alexander took over Burt's duties as director of pathology at the hospital and entered into a new contract with Avera, entitled "Agreement for Pathology Services." Alexander and Avera entered into substantially identical contracts in 1998, 2002, and 2008. Like the 1991 contract with Burt, the contracts between Alexander and Avera all explicitly stated that Alexander would work as an independent contractor and not as an employee. Each contract specified that Avera would have no authority to control or direct performance of Dr. Alexander's services. The contracts provided that Avera would neither pay nor withhold taxes and that Alexander was solely responsible for paying taxes, obtaining malpractice insurance, and paying for his professional licenses. The contracts gave Alexander the right to hire assistants and substitute pathologists at his own expense; Alexander took advantage of this provision by hiring his wife as an assistant at a substantial salary in the years 2008-2010.
Alexander's duties remained relatively uniform throughout his time at Avera. All the contracts required him to provide pathology services at the hospital in accordance with Avera's bylaws, rules, and regulations, which apply to all members of the hospital's medical staff. Beginning in
For income tax purposes, Avera provided Alexander a Form 1099 each year, which listed his income as "nonemployee compensation," rather than a W-2 form used to report wages paid to employees. Alexander reported his income from Avera on Schedule C of his federal Form 1040 tax return, the schedule used by sole proprietors. Alexander listed as Schedule C business expenses advertising costs, payments to substitute pathologists, and wages he paid his wife. He also filed a Schedule SE calculating his self-employment FICA tax obligation.
Beginning in 1994, Avera provided all necessary facilities, equipment, and non-medical assistants. Avera billed patients and paid Alexander in equal monthly installments. In practice, Alexander testified, he and Burt were free to determine their own work schedules so long as one of them was present while surgeries were taking place. No one from Avera ever supervised his practice of medicine, and he could not recall ever being assigned duties not specifically called for by the contracts. From 1995-2010, Alexander exercised his contractual right to work outside St. Luke's Hospital by serving as Medical Director of the South Dakota State Public Health Laboratory.
By 2004, Alexander's relationship with Burt was so acrimonious that Avera required the two pathologists to attend conflict resolution sessions with a psychiatrist. Their relations improved, but in March 2011, the conflict resumed, and Avera learned that Burt would terminate his relationship with St. Luke's Hospital. In August, Avera gave Alexander ninety-day notice it was terminating his contract. To offset the departure of its two principal pathologists, Avera entered into contracts with two other pathologists, Dr. Thomas Buttolph and Dr. Bari Fritz. Unlike Avera's prior contracts with Alexander and Burt, the Buttolph and Fritz contracts were entitled "Physician Employment Agreement[s]" and began by declaring that the "Hospital hereby employs the Physician" (emphasis added). The contracts provided that Avera would maintain malpractice insurance for Buttolph and Fritz; provide them with benefits including
Alexander appeals the dismissal of his statutory claims that Avera violated his rights under the ADA, ADEA, FMLA, and SDHRA. Each of these statutes limits its protections to "employees." Independent contractors are not covered. The key question on appeal, therefore, is whether Alexander in performing professional services under the 2008 Pathology Services Agreement was working as Avera's employee or as an independent contractor. Although we conclude the answer is the same under each of these statutes, the last two require a somewhat different analysis.
We have consistently applied this principle in determining whether a plaintiff asserting claims under the ADA or the ADEA was a protected employee, or an unprotected independent contractor. See Ernster v. Luxco, Inc., 596 F.3d 1000, 1004 (8th Cir.2010), and cases cited. In weighing a nonexhaustive list of relevant common-law factors the Supreme Court derived from the Restatement (Second) of Agency § 220(2) (1958) in Darden, 503 U.S. at 323-24, 112 S.Ct. 1344,
Because "the hiring party's right to control the manner and means by which the [work] is accomplished" is central to Darden's common-law inquiry, 503 U.S. at 323, 112 S.Ct. 1344, we begin our analysis with that factor. Alexander argues that he was subject to Avera's control because he (like every other doctor at the hospital) was required to abide by Avera's bylaws, rules, and regulations, and Avera controlled the means by which Alexander performed his services by providing equipment, supplies, and staff, and by billing patients. However, this court and several other circuits have held that a doctor who has lost staff privileges at a hospital was an independent contractor, not a hospital employee. See Wojewski, 450 F.3d at 343, and cases cited. As we noted in Glascock v. Linn Cnty. Emergency Med., PC, 698 F.3d 695, 698 (8th Cir.2012), "the issue of control is less useful in the context of emergency room physicians than in some other settings because a hospital `must assert a degree of conflicting control over every doctor's work ... to discharge its own professional responsibility to patients,' regardless whether the physician is an employee or independent contractor," quoting Cilecek v. Inova Health Sys. Servs., 115 F.3d 256, 260 (4th Cir.1997), cert. denied, 522 U.S. 1049, 118 S.Ct. 694, 139 L.Ed.2d 639 (1998).
In this case, the parties agreed Avera would have no right to control the specific manner in which Alexander rendered pathology services. Alexander testified that no one from Avera exercised control over his professional services, and that he maintained complete freedom to set his schedule and determine the manner of his performance, including the hiring of substitute pathologists at his own expense, so long as he provided the services required by the 2008 Agreement. Alexander explicitly agreed in each contract that he was an independent contractor, as is typical in hospital/staff physician relationships. Thus, this factor supports the district court's conclusion that Alexander was an independent contractor. Cf. Lerohl, 322 F.3d at 490 (symphony musicians are not employees simply because they are always subject to the conductor's "control" at rehearsals and concerts).
Consideration of the other Darden common-law factors further supports this conclusion. Especially indicative of an independent-contractor relationship are that Alexander was not provided with benefits or malpractice insurance, Avera did not withhold income and FICA taxes from Alexander's monthly compensation and reported his income on a Form 1099, and Alexander reported his compensation as the income of a self-employed independent contractor. See Lerohl, 322 F.3d at 492. By contrast, Avera withheld taxes from its payments to employee-physicians such as Dr. Buttolph and Dr. Fritz, and reported those payments on W-2 forms.
Other facts strongly suggest an independent-contractor relationship: Alexander, unlike Buttolph and Fritz, had the contractual right to hire substitute pathologists and assistants at his own expense (including his wife), had no weekly hours requirement, was never assigned duties not specified in his contract, held other medical employment during much of his time at Avera, and was never bound by a non-compete agreement. These facts demonstrate that Alexander retained substantial "freedom of choice" in determining the extent to which he committed his available professional time to St. Luke's Hospital, though his commitment was certainly more substantial than the musicians made in Lerohl, 322 F.3d at 491-92.
Having carefully reviewed the summary judgment record, we conclude that the balance of common-law Darden factors as applied by this court tilts heavily towards the district court's determination that Alexander was an independent contractor of St. Luke's Hospital under his 2008 Pathology Services Agreement. Accordingly, the district court did not err in granting summary judgment dismissing Alexander's ADA and ADEA claims.
The FMLA's cross-reference to the FLSA in defining a protected "employee" was no accident. As the Senate Labor and Human Resources Committee explained:
S.Rep. No. 103-3, at 4 (1993), reprinted in 1993-2 U.S.C.C.A.N. 3, 6-7. But simply applying to Alexander's FMLA claim an "economic realities" test developed in cases that involved FLSA minimum wage or maximum hours claims is not appropriate. In the first place, Dr. Alexander's work in a "professional capacity" was totally exempt from the FLSA's minimum standards. See 29 U.S.C. § 213(a)(1).
More importantly, prior to the Supreme Court's decision in Darden, "nearly every appellate court ... applied a test described as a hybrid of the common-law test
As we have explained, Alexander was an independent contractor, not an employee, under the common-law standard of Darden, taking into account economic realities such as Alexander's freedom to use his fixed contractual compensation to hire substitute pathologists and assistants, his responsibility to pay his professional licensing and malpractice insurance expenses, and the economic independence reflected on his tax returns. Focusing more directly on the "economic realities" underlying the FMLA, Congress considered this a statute establishing minimum labor standards for unpaid leave. Dr. Alexander's 2008 Pathology Services Agreement more than met the FMLA's minimum standard. It provided him unlimited freedom to hire — at his expense — "a qualified and competent substitute pathologist" if he was "unable to provide necessary services to St. Luke's for a period beyond thirty-five (35) days during a calendar year" for any reason. Thus, the conclusion that Alexander was an independent contractor rather than an employee does no violence to the "economic realities" underlying the FMLA.
We thus conclude that the district court correctly granted summary judgment dismissing Alexander's FMLA claim.
The first question is whether Alexander was an "employee" for purposes of § 20-13-10. The SDHRA provides explicit guidance on this question, defining an "employee" as "any person who performs services for any employer for compensation, whether in the form of wages, salary, commission, or otherwise." S.D. Codified Laws § 20-13-1(6). On appeal, the parties completely ignore this statute, instead urging us to apply the distinct definitions of "employee" in SDCL § 60-1-1, part of the Labor and Employment Title, or SDCL § 62-1-3, part of the Workers' Compensation Title, or the definition of an exempt "independent contractor" in SDCL § 61-1-11, part of the Unemployment Compensation Title. Although the Supreme Court of South Dakota has not addressed the question, we predict it would reject these contentions and consider
The second question is whether the SDHRA protects employees but not independent contractors, like the federal statutes we have considered. In interpreting the SDHRA, the South Dakota Supreme Court has followed federal court decisions construing analogous federal anti-discrimination statutes. See Huck v. McCain Foods, 479 N.W.2d 167, 169-70 (S.D.1991). Consequently, we predict the Supreme Court of South Dakota would conclude that § 20-13-10 does not apply to independent contractors, just as we predicted the Supreme Court of North Dakota would apply its analogous anti-discrimination statute in Birchem v. Knights of Columbus, 116 F.3d 310, 314 (8th Cir.1997). Alexander does not argue on appeal that § 20-13-10 protects independent contractors, only that he was Avera's employee.
The third question is what standard the Supreme Court of South Dakota would apply in determining whether Alexander was an employee or an independent contractor for purposes of § 20-13-10. We consider this question more uncertain because there are various formulations of the standard in prior South Dakota cases that raised the question in different contexts. But a common theme of those cases was an emphasis on the control factor, both in common law tort cases where the issue was critical to liability, such as Halverson v. Sonotone Corp., 71 S.D. 568, 27 N.W.2d 596, 598-99 (1947), and in cases where the issue was critical to a statutory workers' compensation or unemployment insurance claim, such as Egemo v. Flores, 470 N.W.2d 817, 821-22 (S.D.1991).
In evaluating the control factor, the Supreme Court of South Dakota has more than once looked to the Restatement (Second) of Agency for guidance. See Buisker v. Thuringer, 648 N.W.2d 817, 820 (S.D. 2002) (consulting § 225 on a "gratuitous employee" issue); Steen v. Potts, 75 S.D. 184, 61 N.W.2d 825, 827 (1953) (consulting § 220 on a common law contract issue). In Darden, the Supreme Court looked to the Restatement and common-law principles in deciding the employee/independent contractor issue, emphasizing "the hiring party's right to control the manner and means by which the product is accomplished." 503 U.S. at 323, 112 S.Ct. 1344. Bearing in mind the desirability of construing federal and state anti-discrimination statutes in harmony, and the fact that the Darden common-law test is consistent with the control factor emphasized by the Supreme Court of South Dakota in other contexts, we predict that Court would apply the Darden test — perhaps with the "economic realities" supplement we apply — in determining whether Alexander was a protected employee, or an independent contractor not covered by the SDHRA.
The final question is whether the Supreme Court of South Dakota would decide that this question is one of fact for a jury, or a question of law, as federal courts have ruled in applying federal anti-discrimination statutes. This is by no means an easy question. See Ernster, 596 F.3d at 1005-07. But it is a question we need not decide in this case because, for the reasons explained in Part II.A. of this opinion, we conclude that no reasonable jury could find that Alexander was an employee of Avera for purposes of § 20-13-10, and therefore the district court properly granted summary judgment dismissing
The judgment of the district court is affirmed.