Directors Not "Employees" under Federal Law

The Board of Directors of a non-profit did not count as "employees" under the federal ADEA or ADA. Media Center provides public access programming in Nevada. One of its employees sued under ADEA and ADA for age and disability discrimination. The district court dismissed the case because Media Center did not have sufficient "employees" when one disregarded the directors as well as certain volunteer "producers."

As the court pointed out, whether the directors count as "employees"

is governed by the United States Supreme Court’s analysis in Clackamas
Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003). In Clackamas, the Court addressed whether physicians that were also directors and shareholders of a clinic were employees for purposes of the ADA. The Court noted that Congress had intended the word “employee” to describe “the conventional master-servant relationship as understood by common-law agency doctrine.” Id. at 445 (internal quotation marks and citation omitted). The Court then described six factors relevant to determining whether a director is an employee:

• Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work
• Whether and, if so, to what extent the organization supervises the individual’s work
• Whether the individual reports to someone higher in the organization
• Whether and, if so, to what extent the individual is able to influence the rganization
• Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
• Whether the individual shares in the profits, losses, and liabilities of the organization.

Applying this test, the Court held directors are not "employees." The case is Fichman v. Media Center and the opinion is here.

DGV