Perry v. VHS San Antonio Partners
990 F.3d 918
5th Cir.2021Background
- Dr. Melvin G. Perry, Jr., an African‑American pediatric intensivist, provided care at North Central Baptist Hospital under a professional services agreement with Pediatric Inpatient Critical Care Services (PICCS).
- PICCS had an exclusive "coverage agreement" with VHS San Antonio Partners (owner/operator of North Central Baptist) that labeled PICCS physicians as independent contractors and allowed the VHS CEO to request removal of a PICCS physician.
- Dr. Perry signed a physician agreement acknowledging he was bound by the PICCS–VHS coverage agreement and the hospital medical‑staff bylaws; the physician agreement was signed only by Dr. Perry.
- At VHS’s request PICCS terminated Dr. Perry’s contract in Feb. 2017; Dr. Perry sued PICCS and VHS under Title VII and 42 U.S.C. § 1981 alleging race discrimination and hostile work environment.
- The district court granted summary judgment dismissing all claims against VHS: Title VII claims for lack of an employment relationship (no integrated‑enterprise or joint‑employer finding) and § 1981 claim for lack of an enforceable contract with VHS. Dr. Perry appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Title VII — Sibley interference theory | VHS controlled access to employment and denied it on racial grounds (Sibley) | Argument not preserved below | Not considered on appeal (argument forfeited) |
| Title VII — Integrated‑enterprise (single employer) | PICCS and VHS function as a single employer (aggregate employees) | Entities are separate; lack interrelation, common management/ownership | Second factor (control of labor relations) favored plaintiff, but single instance of removal insufficient; integrated‑enterprise not shown; summary judgment affirmed |
| Title VII — Joint employer | VHS exercised sufficient control over Dr. Perry (hire/fire/supervise/schedule) | VHS lacked meaningful control and did not pay or set terms; PICCS controlled employment matters | Applied hybrid economic‑realities/common‑law control test; VHS lacked control and economic indicia of employment; not a joint employer; summary judgment affirmed |
| §1981 — Contractual rights / third‑party interference (Faraca) | Physician agreement created enforceable contractual rights against VHS; alternatively VHS interfered with PICCS contract | Physician agreement did not create contractual obligations by VHS; VHS is not "essentially one and the same" with PICCS | Physician agreement did not give Dr. Perry an enforceable contractual right against VHS; Faraca does not allow suit against a true third party; §1981 claim against VHS fails; summary judgment affirmed |
Key Cases Cited
- Schweitzer v. Advanced Telemarketing Corp., 104 F.3d 761 (5th Cir. 1997) (integrated‑enterprise analysis for Title VII)
- Trevino v. Celanese Corp., 701 F.2d 397 (5th Cir. 1983) (four‑factor test for single employer)
- Johnson v. Crown Enters., Inc., 398 F.3d 339 (5th Cir. 2005) (refining integrated‑enterprise factors)
- Lusk v. Foxmeyer Health Corp., 129 F.3d 773 (5th Cir. 1997) (focus on daily employment interrelation)
- Deal v. State Farm Cnty. Mut. Ins. Co. of Tex., 5 F.3d 117 (5th Cir. 1993) (hybrid economic‑realities/common‑law control test)
- Diggs v. Harris Hosp.-Methodist, Inc., 847 F.2d 270 (5th Cir. 1988) (physician with hospital privileges not necessarily a hospital employee)
- Burton v. Freescale Semiconductor, Inc., 798 F.3d 222 (5th Cir. 2015) (supervision and on‑the‑job control support employment finding)
- Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (2006) (§ 1981 requires identification of an impaired contractual relationship)
- Faraca v. Clements, 506 F.2d 956 (5th Cir. 1975) (discussed third‑party interference; later clarified)
- Bellows v. Amoco Oil Co., 118 F.3d 268 (5th Cir. 1997) (clarifies Faraca — liability where third party is essentially the contracting party)