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In a Labor Code § 1102.5 Whistleblower Action is a California Doctor an Employee?

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In a Labor Code § 1102.5 Whistleblower Action is a California Doctor an Employee?

Medical Decision Making and Doctor Employment

For medical decision making, a doctor cannot be an employee of a corporation or non-physician. However, retaliation lawsuits against hospitals under Labor Code Section 1102.5 raise the question of whether a doctor who is technically independent is actually an employee.

Doctors with only medical staff privileges may not be considered employees. But what about directors and doctors with privileges who have contracts with hospitals that specifically deem them independent contractors? Or contracts with third parties that supply doctors to hospitals, bypassing the prohibition on hospitals directly hiring physicians?

California Labor Code §2783 on Doctors as Employees

California Labor Code §2783 addresses the employee vs. independent contractor determination for physicians using the Borello test (Labor Code §2783(c)). No case law holds that any other standard applies to physicians.

Business & Professions Code §2400 and Hospital Employment

Business & Professions Code §2400, which prevents the corporate practice of medicine, does prohibit a doctor from being employed by a hospital. However, this is meant to protect medical independence and does not apply in the context of Labor Code cases.

If there is a conflict, basic rules of statutory interpretation apply. Code of Civil Procedure §859 states that when a general and particular provision are inconsistent, the latter is paramount. The Legislature created an exception between an “employee” for medical judgments and an “employee” for Labor Code lawsuits.

Common Law Employment Test

The principal test of a common law employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired (Borello & Sons, Inc. v. Department of Industrial Relations, 1989). The strongest evidence of the right to control is whether the hirer can discharge the worker without cause (Ayala v. Antelope Valley Newspapers, Inc., 2014).

If you are a physician with a claim against a hospital or other entity prohibited from directly hiring physicians, you may still have an action under the Labor Code and Health & Safety Code Section 1278.5.

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