By Greg Care

A recent decision out of the U.S. Court of Appeals for the Sixth Circuit, Mares v. Miami Valley Hospital, is a new entry in the persistent confusion and debate about whether, in the eyes of the law, residents and fellows are employees or students. The answer to this question can make a big difference in both how a resident is treated during training and, if things go awry, the strength of the resident’s legal claims in challenging alleged mistreatment.

Before I explore the decision in Mares, it is worth noting that the law and its practitioners are inherently drawn towards taxonomy, even though the law is an art rather than a science. There are hundreds upon hundreds of years’ worth of statutes and judge-made law that rely heavily on defining or classifying a person or thing to decide the rights of the parties involved. As far back as the Code of Hammurabi, one of the oldest law codes known to man, the law prescribed different consequences for the actions of or against certain classes of people, such as plebeians or slaves. A more recent example, in the context of medicine itself, illustrates this compulsion to categorize. A colleague, Richard Cheng at Ritter Spencer Cheng, PLLC in Texas, noted to me an interesting case in the Texas Supreme Court that resolved whether a second-year psychiatry resident qualified as a “psychiatrist” under the Texas Health and Safety Code. To my surprise, the Court found that the plain meaning of “psychiatrist” does not inherently exclude medical residents and concluded, with the aid of dictionary references, that second-year residents who specialize their practices in psychiatry qualify as “psychiatrists.”

With that background, we can consider the Sixth Circuit’s decision in Mares that medical residents are “students” in the context of constitutional due process.

In or about 2018, Dr. Mares was dismissed from the Wright State University Boonshoft School of Medicine (WSU) OBGYN residency program. She appealed that decision to a review panel that recommended reversing the dismissal, but WSU’s Dean and the hospital’s vice president rejected that recommendation. WSU’s Provost affirmed the dismissal and the hospital finalized her employment termination. Dr. Mares then sued for alleged violations of her procedural and substantive due process rights (because WSU is a state institution), among other things.

After assuming, as many courts do, that Dr. Mares had a constitutionally protected property (as here) or liberty interest in her residency training, the Sixth Circuit had to decide how much “process” was due to her. The court framed this as a question of whether the resident was a “student,” who is owed less process, or an “employee,” who is owed more. In my humble view, the exercise of differentiating residents by student or employee is fundamentally flawed and, moreover, was applied incorrectly here in any event.

In a key passage, the court wrote: “every circuit to address the question agrees that medical residents receive the due process protections of students.” However, one of the three cases cited for this proposition betrays the inability to cleanly define residents in such a way. That case, Ezekwo v. New York City Health & Hospitals Corp., 940 F.2d 775 (2d Cir. 1991), found that a resident was deprived of due process because residents were not informed of new criteria for the selection of chief resident. Bolstering that decision, the Second Circuit acknowledged that “[w]hile a medical residency program is largely an academic undertaking, it also is an employment relationship. This is most clearly evidenced by the existence of formal employment contracts and collective bargaining agreements.”

Instead of paying heed to this recognition that residency is, at best, a hybrid of education and employment, the Mares Court fell back on a 35-year-old decision from another appeals court that, without support or context, claimed “[i]t is well-known that the primary purpose of a residency program is not employment or a stipend, but the academic training and the academic certification for successful completion of the program.” Davis v. Mann, 882 F.2d 967, 974 (5th Cir. 1989). Worse yet, the Davis Court simply waved away the significance of the contract between the resident and his program requiring annual pay for services.

This analytical approach is deeply problematic for several reasons.

First, as discussed above, residency and fellowship is—in reality—employment at least as much as it is education.

At the foundation of this issue are two U.S. Supreme Court decisions that examined constitutional due process in the context of dismissals from undergraduate and medical schools: Board of Curators of Missouri v. Horowitz, 435 U.S. 78 (1978) and Regents of University of Michigan v. Ewing, 474 U.S. 214 (1985). Both cases are frequently cited (though, not always entirely faithfully) for the proposition that courts are not to interfere with academic decisions which, in turn, means less “process” is due constitutionally to students.

However, undergraduate and medical school are quite distinguishable from residency and fellowship. In the former, students pay tuition to receive instruction and they offer no services for which they could be compensated. In the latter, residents and fellows receive wages for the valuable medical services they provide while simultaneously being trained in their chosen specialty, often working at or above the 80-hour week limits set by the ACGME. And, in residency and fellowship, the trainees have already attained the terminal degrees in their field and, in many cases, are licensed physicians. The “academic certification for successful completion of the program” discussed by the Davis Court is more akin to a vocational or professional credential than an academic “diploma.”

The arcane world of how residencies and fellowships are funded, in part, by the federal government gives some unique perspective, as well. In brief, the Centers for Medicare and Medicaid Services (CMS) provides funding to training programs to help underwrite the direct and indirect costs associated with training residents. However, that amount is capped for each institution based on, among other things, how many residents a program has. Nonetheless, data shows that most programs (even as high as two-thirds of them) take on more residents than are funded in any way by CMS. From this, as reported by the National Academies of Sciences, Engineering, and Medicine, scholars have concluded that residents may be an inexpensive source of labor for teaching institutions, particularly for some specialties. Some economists argue that if residents weren’t contributing more than they cost, they wouldn’t be paid and would instead be charged a tuition.

It seems evident to me that the courts, mired in outdated notions about who is a “student” and who is an “employee,” do not appreciate this reality of how residency works. Residents are not pupils who come only to be taught. They are an essential part of the medical workforce and deserve the rights that come with that status.

Second, there is little—if any—intellectually satisfying basis to treat residents and fellows as students in the context of due process but treat them like employees in others. Yet, that is what we have done. The following examples demonstrate the dizzying inconsistencies in our legal taxonomy:

• Anti-Discrimination Laws (e.g., Title VII of the Civil Rights Act of 1964, Americans with Disabilities Act, Title IX of the Education Amendments of 1972): Mixed. There is some variation in how courts have applied these laws, so this remains a jurisdiction-by-jurisdiction analysis. In the context of Title VII, which prohibits discrimination in employment, most courts have said residents can invoke Title VII as employees. More complexity is added by looking at Title IX, which prohibits discrimination in federally-funded education programs or activities. Cases like Doe v. Mercy Catholic Medical Center strike a more realistic balance, recognizing the dual or hybrid status of residents. That case held both that: (1) Mercy’s residency program is “at least in part, educational under Title IX,” and (2) “it’s plausible [the resident] was Mercy’s ‘employee’ notwithstanding any other status the law may or may not have reposed on her (for example, a ‘student’).” 850 F.3d 545, 558-59 (3d Cir. 2017).
• Payroll Taxes: Employees. The U.S. Supreme Court decided in Mayo Foundation for Medical Education and Research v. United States, that the Treasury Department’s rule that treats residents as full-time employees, and therefore not exempt from the payment of payroll taxes, is a valid interpretation of federal law.
• Unionization: Employees. In 1999, the National Labor Relations Board (NLRB) reversed its prior rulings and decided in Boston Medical Center Corp. that residents are “employees” for purposes of the National Labor Relations Act (NLRA). Notably, in Icahn School of Medicine at Mount Sinai, the NLRB later rejected attempts to equate residents to graduate students, who are not employees under the NLRA.
• Privacy: Mixed. Since at least 1992, the U.S. Department of Education has opined that residents are not “students” as that term is used in the Family Educational Rights and Privacy Act (FERPA). Of note, the Department has explained that this is due, in part, to the fact that (as I noted above) residents have attained the terminal degree of their profession in medical school, where their “student” status ends. However, some courts have reached the opposite conclusion. E.g., Daywalker v. UTMB at Galveston, No. 22-40813, 2024 WL 94297, at *12 (5th Cir. Jan. 19, 2024).

Suffice to say, there are many pitfalls for the unwary and courts can easily be led down the wrong path in evaluating a resident’s or a fellow’s legal claims. Effective advocacy here requires a thorough appreciation for the subtleties in this niche area of the law. If you have questions regarding your situation, please contact us today to see if we can assist with your particular circumstances.

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