Refining the Economic-Realities Test: When Hospitals Are Not “Employers” of Contract Physicians
Commentary on Veerasikku Bommiasamy v. NES Oklahoma, Inc. (7th Cir. 2025)

1. Introduction

The Seventh Circuit’s August 2025 decision in Veerasikku Bommiasamy v. NES Oklahoma, Inc. clarifies the contours of “joint-employer” liability under Title VII and the Age Discrimination in Employment Act (ADEA) for physicians who work in hospitals through third-party staffing companies.

Dr. Veerasikku Bommiasamy, an emergency-room physician of Indian origin and over 40 years old, was placed by NES Oklahoma, Inc. (“NES”) to work at Galesburg Hospital Corporation (“Galesburg”). After Galesburg complained of clinical-performance and scheduling issues, NES terminated his independent-contractor agreement. Dr. Bommiasamy sued both entities, alleging discriminatory harassment and discharge.

The district court granted summary judgment for both defendants. On appeal, the Seventh Circuit affirmed, finding:

• Galesburg was not a joint employer under the five-factor “economic realities” test.
• Dr. Bommiasamy failed to exhaust administrative remedies for several claims, leaving only the discriminatory-termination claim.
• NES’s decision was based on legitimate, non-discriminatory reasons, untainted by pretext or “cat’s paw” manipulation.

2. Summary of the Judgment

The panel (Easterbrook, Rovner, Lee, JJ.) made three principal findings:

1. Administrative Exhaustion  – Claims relating to harassment and schedule-removal were either untimely or not included in the EEOC charge; hence, only the January 2019 termination remained justiciable.
2. No Joint-Employer Status  – Applying Knight v. United Farm Bureau, the court held the hospital lacked hiring/firing authority, paid no taxes or benefits, and exercised only ordinary clinical oversight. Therefore, Galesburg could not be liable under Title VII or the ADEA.
3. No Pretext / Cat’s Paw  – NES honestly relied on Galesburg’s performance reports. Even assuming discriminatory animus by the on-site medical director, that animus was not the proximate cause of termination.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

• Knight v. United Farm Bureau Mut. Ins. Co., 950 F.2d 377 (7th Cir. 1991) – foundational “economic realities” test; emphasized control, especially hiring/firing.
• Levitin v. Northwestern Community Hospital, 923 F.3d 499 (7th Cir. 2019) – physicians with hospital privileges are usually not hospital employees merely due to peer review.
• Bronson v. Lurie Children’s Hosp., 69 F.4th 437 (7th Cir. 2023) – reiterated the primacy of hiring/firing control.
• Ortiz v. Werner Enterprises, 834 F.3d 760 (7th Cir. 2016) – holistic “convincing mosaic” approach to discrimination evidence.
• Sinha v. Bradley University, 995 F.3d 568 (7th Cir. 2021) – limits of “cat’s paw” when decisionmaker conducts independent investigation.
• Downing v. Abbott Laboratories, 48 F.4th 793 (7th Cir. 2022) – decisionmaker’s honest belief defeats pretext.

These precedents collectively shaped the panel’s reasoning, especially on joint-employer doctrine and pretext analysis.

3.2 The Court’s Legal Reasoning

(a) Administrative Exhaustion

The EEOC charge alleged only “termination” on January 3, 2019. Removal from the schedule (a distinct act) and harassment claims were therefore unexhausted. The panel underscored that plaintiffs must ensure the EEOC charge covers each discrete act of alleged discrimination.

(b) Joint-Employer Analysis (“Economic Realities”)

1. Control / Supervision: Galesburg provided peer review, policies, and scheduling input, but NES retained ultimate hiring/firing power.
2. Skill & Training: Dr. Bommiasamy’s medical expertise was self-acquired; hospital merely provided a venue.
3. Operational Costs: Doctor paid own taxes, insurance, and licensure; hospital shouldered none of these.
4. Method of Payment: NES, not Galesburg, compensated him; no hospital benefits were furnished.
5. Duration / Expectation: Though long-standing, the relationship remained contractual and easily terminable.

The factors weighed decisively against employer status, leading to complete dismissal of claims against Galesburg.

(c) Pretext and “Cat’s Paw”

• NES decisionmakers (CMO & VP) relied on multiple hospital reports (tube removal, code responses, EMR issues, scheduling conflicts).
• No evidence showed they doubted these reports or that bias colored their interpretation.
• Even if Dr. Singel harbored bias, his influence was diffuse among many inputs; NES’s independent review broke the causal chain.

3.3 Impact of the Judgment

The decision is non-precedential (Rule 32.1) yet persuasive for several reasons:

• Staffing-Contract Model – Hospitals nationwide increasingly outsource ER staffing. This ruling signals that ordinary clinical oversight will not convert hospitals into “employers,” reducing their exposure in Title VII/ADEA suits.
• Clearer Exhaustion Parameters – Plaintiffs must articulate each adverse act in the EEOC charge; schedule-removal ≠ employment termination.
• Cat’s Paw Limits – Where the terminating entity performs its own multifaceted review, biased subordinates’ motives may not be imputed upstream.
• Physician-Hospital Relationships – Reinforces existing Seventh-Circuit line (Alexander, Hojnacki, Levitin) that physicians, even long-term, are often independent contractors rather than employees.

4. Complex Concepts Simplified

• Economic-Realities Test: A practical checklist courts use to decide whether someone who looks like a contractor is actually an “employee.” Think of it as examining who really controls the work, the purse strings, and the risks.
• Joint Employer: Two or more entities share legal responsibility for employment-law compliance because they jointly control the worker’s terms and conditions.
• Cat’s Paw Liability: If a biased supervisor tricks an unbiased decisionmaker into firing an employee, the employer can still be liable—the supervisor uses the decisionmaker like a cat pulling chestnuts from a fire.
• Administrative Exhaustion: Before suing under federal anti-discrimination laws, an employee must first file a detailed complaint (a “charge”) with the EEOC, giving the agency a chance to investigate.
• Pretext: A false reason an employer gives to hide illegal discrimination. To prove it, a plaintiff must show not just that the reason was wrong, but that the employer didn’t honestly believe it.

5. Conclusion

Veerasikku Bommiasamy v. NES Oklahoma, Inc. fortifies the Seventh Circuit’s view that contract physicians are usually not employees of the hospitals where they practice, absent concrete evidence of hiring/firing control or financial integration. The opinion also serves as a cautionary tale on EEOC-charge drafting: a failure to mention distinct adverse actions can foreclose later litigation. Finally, the case underscores cat’s-paw limitations; independent, multi-source decision-making shields employers from subordinate bias.

Practitioners representing staffing companies, hospitals, and contract physicians should heed the court’s methodical application of the economic-realities test and its insistence on precise administrative exhaustion, as these twin doctrines decisively shaped the outcome.