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VAKHARIA v. SWEDISH COVENANT HOSP.

May 20, 1991

USHA VAKHARIA, M.D., Plaintiff,
v.
SWEDISH COVENANT HOSPITAL, NANCY LOEBER, M.D., DEMETRIUS TRAKAS, M.D., LOREN DARDI, M.D., JOHANNA CHOOKASZIAN, M.D., MARSHALL SALKIN, M.D., WALTEN BABA, M.D., JAMES MCCORMICK, M.D., ALVIN SOMBERG, M.D., PAUL LARSON, M.D., ROBERTO ESPINOSA, M.D., EDWARD PAULISSIAN, M.D., S. YELDA, M.D., M. BARRY KIRSCHENBAUM, M.D., and G. CHRISTOPOULOS, M.D., Defendants


James B. Moran, Chief United States District Judge.


The opinion of the court was delivered by: MORAN

JAMES B. MORAN, CHIEF UNITED STATES DISTRICT JUDGE

 Plaintiff Dr. Usha Vakharia ("Vakharia"), a 45-year old woman born in Bombay, India, and a physician specializing in anesthesiology, claims that her privileges as a member of the medical staff of Swedish Covenant Hospital ("the Hospital") were restricted and ultimately terminated on discriminatory grounds. In a four-count complaint filed against the Hospital, Dr. Nancy Loeber ("Loeber"), who was the chairman of the Hospital's Department of Anesthesiology during the relevant period, and the fourteen members, all physicians, of the Hospital's Medical Staff Executive Committee ("individual defendants"), Vakharia charges that, beginning in 1987, she was assigned fewer and less desirable cases, was classified as a "junior member" of the anesthesiologist department with concomitant restrictions on her practice, was rejected from positions for which she had applied and was qualified, and was summarily -- and ultimately permanently -- suspended from the medical staff at the Hospital. These discriminatory actions, Vakharia alleges, were taken because of her color, race, national origin, age, and sex in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq. (1988), the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (1988), section 1981 of the 1866 Civil Rights Act ("section 1981"), 42 U.S.C. § 1981 (1988), and her contract with the Hospital as reflected in the Medical Staff Bylaws.

 Now before this court are two motions to dismiss, one filed by the Hospital and Loeber and the second by the individual defendants. Vakharia's federal claims, the Hospital and Loeber argue, are not viable because Vakharia has alleged no facts that would establish an employment relationship, which is necessary for Title VII, and because she is complaining only of post-contract-formation conduct, which is not actionable under section 1981. The individual defendants, who are implicated only in count IV's breach of contract claim, assert that they were not responsible for Vakharia's termination, do not have the authority to grant the relief sought and therefore are not appropriate parties to this lawsuit. We consider these arguments in turn.

 DISCUSSION

 A. Title VII: Employment Relationship

 Under Title VII, it is unlawful for an employer

 
to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges or employment, because of such individual's race, color, religion, sex, or national origin . . . .

 42 U.S.C. § 2000e-2(a)(1). The discrimination targeted by Title VII "relates to the field of employment," 1 A. Larson & L. Larson, Employment Discrimination § 5.21, at 2-9 (1991); Graves v. Women's Professional Rodeo Ass'n., 708 F. Supp. 233, 235 (W.D. Ark. 1989), aff'd, 907 F.2d 71 (8th Cir. 1990), and therefore courts have consistently held that "Title VII contemplates some employment relationship." Broussard v. L.H. Bossier, Inc., 789 F.2d 1158, 1159 (5th Cir. 1986); Mitchell v. Frank R. Howard Memorial Hospital, 853 F.2d 762, 766 (9th Cir. 1988) (" Frank R. Howard "), cert. denied, 489 U.S. 1013, 103 L. Ed. 2d 186, 109 S. Ct. 1123 (1989); Diggs v. Harris Hospital-Methodist, Inc., 847 F.2d 270, 272 (5th Cir.), cert. denied, 488 U.S. 956, 102 L. Ed. 2d 383, 109 S. Ct. 394 (1988); Gomez v. Alexian Bros. Hospital of San Jose, 698 F.2d 1019, 1021 (9th Cir. 1983); Lutcher v. Musicians Union Local 47, 633 F.2d 880, 883 (9th Cir. 1980). This relationship, however, need not link together the plaintiff and the defendant; claims that a defendant interfered with the plaintiff's employment opportunities with third parties have been allowed where the defendant controls the access to these opportunities. See Sibley Memorial Hospital v. Wilson, 488 F.2d 1338, 160 U.S. App. D.C. 14 (D.C. Cir. 1973); Doe on behalf of Doe v. St. Joseph's Hospital, 788 F.2d 411, 422-23 (7th Cir. 1986); Zaklama v. Mt. Sinai Medical Center, 842 F.2d 291, 294 (11th Cir. 1988); Puntolillo v. New Hampshire Racing Comm'n, 375 F. Supp. 1089 (D.N.H. 1974). *fn1"

 In Sibley, the seminal case in this area, the plaintiff, a male private duty nurse, complained that on two occasions the defendant-hospital, after communicating to a registry of nurses the need for a private nurse on behalf of a female patient, prevented him from reporting to the requesting patient because of his sex. Finding it quite clear that the plaintiff and defendant "did not contemplate any immediate or future relationship of direct employment in the sense of the usual indicia of such employment," 488 F.2d at 1342, the Sibley court observed that the manifest congressional objective of Title VII was "'to achieve equality of employment opportunities,'" id. at 1340-41 (quoting Griggs v. Duke Power Co., 401 U.S. 424, 429, 28 L. Ed. 2d 158, 91 S. Ct. 849 (1969)) (emphasis in Sibley), and Congress therefore intended to prohibit any employer with control over access to the job market from foreclosing, for invidious reasons, those opportunities to individuals. A contrary interpretation would make little sense:

 
To permit a covered employer to exploit circumstances peculiarly affording it the capability of discriminatorily interfering with an individual's employment opportunities with another employer, while it could not do so with respect to employment in its own service, would be to condone continued use of the very criteria for employment that Congress has prohibited.

 Sibley, 488 F.2d at 1341. Reasoning additionally that a broader construction is consistent with Title VII's prohibition of discrimination against any individual rather than against those individuals who stand in direct employment relationships with an employer, the Sibley court concluded that the plaintiff could succeed on a Title VII claim against the hospital, which controlled plaintiff's access to patients for employment purposes, if he could establish that the hospital blocked access to female patients because he was male. Id. at 1342.

 It is not entirely clear what "employment relationship" formed the basis of the Title VII claim sustained in Sibley. One possible interpretation is that the court found an indirect employment relationship between the plaintiff and defendant in light of the hospital's control over access to the patients. Alternatively, the requisite employment relationship may be represented by the nurse-patient association. There is some indication in Sibley itself, as well as in several of its progeny, that the former interpretation is proper. In reaching its conclusion, the Sibley court repeatedly stressed that Title VII did not require -- and the plaintiff in that case could not assert -- a direct employment relationship between the litigating parties; the negative implication is that the relationship between the Sibley parties was indirect and that such an relationship could give rise to a cognizable Title VII claim. The court, moreover, observed that the patients were responsible for compensating private nurses and could accept or reject their services but did not refer to these patients as the nurses' "employers" or the relationship between patient and nurse as an "employment relationship." See also Gomez, 698 F.2d at 1021 (recognizing that there must be an employment relationship to trigger Title VII liability but that "'the connection with employment need not necessarily be direct'" (quoting Lutcher, 633 F.2d at 883)). In Shrock v. Altru Nurses Registry, 810 F.2d 658, 660 (7th Cir. 1987), moreover, the Seventh Circuit emphasized the importance of an indirect relationship between the plaintiff and defendant in the Sibley line of cases, suggesting that in the absence of such a relationship, a claim of interference with employment opportunities may not be actionable under Title VII. And one of the several formulae for determining whether a plaintiff is a protected individual under Title VII tests whether the defendant can subject the plaintiff "to the discriminatory practices which the act was designed to eliminate." Armbruster v. Quinn, 711 F.2d 1332, 1340 (6th Cir. 1983); cf. Mallare v. St. Luke's Hospital, 699 F. Supp. 1127, 1130 (E.D. Pa. 1988) (hospital may enjoy an employment relationship with a physician where the physician "depends on access to a hospital for his patients and is unlikely to attract many patients without such access").

 More persuasive, however, is the interpretation that finds the employment relationship in the link between the plaintiff and the third party. Although the Sibley court does not refer to the patients as "employers," it does speak of the private nurses' relations with patients in terms of "employment." See 488 F.2d at 1342 (observing that the hospital controlled plaintiff's "access to the patient for the purposes of the initiation of such employment"). Courts that have recognized the category of claims that Sibley brought within the scope of Title VII, moreover, understand these claims as alleging interference with plaintiff's "employment opportunities." See, e.g., Pardazi v. Cullman Medical Center, 838 F.2d 1155, 1156 (11th Cir. 1988). The Seventh Circuit in Doe, without recognizing the possibility of a competing construction, appears to have interpreted the Sibley approach as requiring that the plaintiff have some sort of employment relationship with the third party. See 788 F.2d at 424. Other courts that have, guided by Sibley, considered interference with employment opportunities with third parties as possible Title VII violations have similarly proceeded to analyze whether the relationship between the plaintiff and the third party can be considered one of employment. See Frank R. Howard, 853 F.2d at 767 (no facts alleged supporting a finding that a physician's relationship with his patients is an employment relationship); Lutcher, 633 F.2d at 884 (summary judgment granted to defendant where "at most the [defendant] interfered with an independent contractor," as opposed to an employment, relationship with a third party); Graves, 708 F. Supp. at 238 (interference with the ability to compete in a rodeo for prize money does not amount to interference with an employment relationship); Nanavati v. Burdette Tomlin Memorial Hospital, 42 Fair Empl. Prac. Cas. (BNA) 197, 200 (D.N.J. 1986); Beverley v. Douglas, 591 F. Supp. 1321, 1328 (S.D.N.Y. 1984); cf. Mitchell v. Tenney, 650 F. Supp. 703, 709 (N.D. Ill. 1986) (" Tenney ") (assuming that if the plaintiff was not an employee of the defendant, "then his customers employed him"); 1 A. Larson & L. Larson, supra p. 3, § 5.21, at 2-8 (asserting that in Sibley, the private nurse "clearly . . . stood in an employment-type relationship with the patient"). More explicitly, the court in Diggs, 847 F.2d at 273, spelled out such a requirement: "Even if we were to hold that [Title VII covers interference] with a [plaintiff's] relationship with a third party -- a question we do not reach [--] that relationship would have to be an employment relationship under the economic realities/common law contract control test." See also Smith v. Dutra Trucking Co., 410 F. Supp. 513, 518 & n. 11 (N.D. Cal. 1976), aff'd, 580 F.2d 1054 (9th Cir. 1978), cert. denied, 439 U.S. 1076, 59 L. Ed. 2d 43, 99 S. Ct. 852 (1979).

 Even those cases that appear to focus on the indirect relationship between the plaintiff and the defendant do not rule out the need for an employment relationship between the plaintiff and a third party in interference cases. The Gomez court, after observing that the connection with employment need not be direct, recognized that Title VII also encompassed claims of interference with "'an individual's employment opportunities with another employer,'" 698 F.2d at 1021 (quoting Lutcher, 633 F.2d at 883 n. 3) (emphasis added), and noted that the defendant in that case did not dispute that the plaintiff was an "employee" of the third party. And although the Shrock court seems to suggest that a defendant will not be liable under Title VII unless he shares at least an indirect employment relationship with the plaintiff, that decision appears to take a fairly restrictive approach to Title VII liability for interference with employment opportunities; it is unlikely that the court intended to relax the employment relationship requirement by allowing an indirect nexus between the litigating parties to supplant the need for an employment relationship between the plaintiff and the third party.

 We find there to be little question, then, that at least in this circuit, Sibley liability (for interference with employment opportunities with third parties) requires an employment relationship between the plaintiff and the third party. Whether the plaintiff must demonstrate additionally that he and the defendant were connected by an indirect relationship we need not determine, for the nexus between Vakharia, an anesthesiologist with medical staff privileges at the Hospital, is certainly as close as the link between the ...


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