Elizabeth Placzek v. Mayo Clinic ( 2021 )

United States Court of Appeals
For the Eighth Circuit
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No. 21-1678
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Elizabeth Placzek
Plaintiff - Appellant
v.
Mayo Clinic; Mayo Clinic Health System-Southeast Minnesota Region
Defendants - Appellees
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Appeal from United States District Court
for the District of Minnesota
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Submitted: October 20, 2021
Filed: November 30, 2021
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Before GRUENDER, ERICKSON, and STRAS, Circuit Judges.
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GRUENDER, Circuit Judge.
Dr. Elizabeth Placzek worked for Mayo Clinic Health System-Southeast
Minnesota Region (“MCHS”) as an emergency-room physician with a clinical
appointment at Mayo Clinic in Rochester (“Mayo Clinic”). After Mayo Clinic
terminated her appointment and she resigned from MCHS, Dr. Placzek sued MCHS
and Mayo Clinic, alleging breach of contract as well as violations of the Minnesota
Whistleblower Act (MWA), Minn. Stat. § 181.932, and the Minnesota Payment of
Wages Act (MPWA), Minn. Stat. § 181.101. The district court 1 granted summary
judgment in favor of the defendants. Dr. Placzek appeals, and we affirm.
I.
Dr. Placzek is an emergency-room physician. In 2013, she entered into a
Physician Employment Agreement (“employment agreement”) with MCHS to work
as a Clinical Associate. The Clinical Associate Program allowed physicians to work
at an MCHS site location and at Mayo Clinic in Rochester. The employment
agreement provided that Placzek would work full-time—“80% in Austin and 20%
in Rochester St. Mary’s (RST), as determined by Employer [MCHS] under its
policies for full-time physician employees.” (emphasis omitted). It also had a
choice-of-law provision designating the law of the state of the employer’s principal
business office as the governing law.
Clinical Associate appointment recommendations are made jointly between
MCHS and Mayo Clinic, and Mayo Clinic must approve all Clinical Associate
appointments and renewals. The Clinical Associate Policy provides that “[p]rimary
appointment, oversight and accountability will reside at the MCHS site; [Mayo
Clinic] will conduct annual assessments based on [Mayo Clinic] performance
measures and may share the feedback with the physician’s MCHS Medical Director.
It is expected that performance concerns will be communicated mutually between
[Mayo Clinic] and MCHS.” MCHS paid Clinical Associates the MCHS salary for
work at MCHS and the Mayo Clinic salary for work at Mayo Clinic, and Mayo
Clinic reimbursed MCHS for salary earned for Mayo Clinic work.
Each physician received a full-time equivalency (FTE) level, which
corresponded to the number of hours they were expected to work per year. For
example, a 1.0 FTE was equivalent to 1,680 hours per year. If the number of
1
The Honorable Joan N. Ericksen, United States District Court Judge for the
District of Minnesota.
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assigned annual shifts was not divisible by four, MCHS would round up and require
the physician to work an extra half-shift per quarter. At the end of each quarter, each
physician was given a true-up payment for the shifts they worked above their FTE.
In September 2015, Dr. Placzek had a miscarriage, which required surgery,
recovery time, and related doctor’s appointments. Dr. Placzek contacted her medical
director to tell her that she would be absent for at least one shift and contacted her
whenever she needed to miss other shifts. MCHS provides Short-Term Disability
(STD) benefits to Consulting Staff, which includes Dr. Placzek. STD benefits are
not mentioned in the employment agreement, but the agreement incorporated other
benefit, compensation, and vacation policies. According to the short-term disability
policy, “[f]or absences that fit the definition of ‘serious health condition’ under [the
Family Medical, Personal Medical, and Parental Leaves policy (FMLA)], staff
members are expected to submit a FMLA leave request via Employee Self Service.”
Dr. Placzek did not submit a formal STD claim in 2015 and did not receive
STD benefits at the time of her miscarriage. MCHS states that in 2017 it became
aware that Dr. Placzek might have been entitled to STD benefits for the 2015
miscarriage. In 2017, MCHS gave Dr. Placzek five days of STD benefits for the
2015 miscarriage, which it claims it calculated the same way it would have in 2015.
In 2016, Dr. Placzek took a twelve-week maternity leave, which was allowed
under the Family Medical, Personal Medical, and Parental Leaves (FMLA) policy.
Under this policy, Dr. Placzek was entitled to use STD benefits for the first six
weeks. Dr. Placzek was paid STD benefits based on her assigned FTE. At the time,
Dr. Placzek was assigned a .7 FTE at MCHS but, due to rounding up half-shifts,
worked the equivalent of a .7143 FTE.
For the last six weeks of maternity leave, Dr. Placzek took vacation time. The
FMLA policy states that for the last six weeks of maternity leave, “[t]he staff
member may . . . use vacation or unpaid leave of absence,” depending on “individual
eligibility.” The employment agreement provided that “Physician shall also be
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entitled to take time off for vacation,” but only “as determined by [MCHS] under its
related policies and procedures.” Several policies and procedures referenced
vacation, such as the Physician Benefit Highlights, listing the number of vacation
days by tenure, and the Professional Absence Record, stating that “[i]f there are
enough available vacation days, time is paid. If Vacation balance is insufficient, time
may be converted to personal unpaid leave.”
As an MCHS employee, Dr. Placzek was eligible for an educational-loan
reimbursement of $15,000 per year. Under the policy, if the physician terminates
the agreement “except for a breach by the Medical Center or in the event the Medical
Center terminates this Agreement for cause,” the physician must repay the prior two
reimbursements. In 2017, Dr. Placzek resigned from MCHS. Dr. Placzek’s clinical
appointment at Mayo Clinic had already been terminated unilaterally by Mayo
Clinic in 2016.
In October 2018, Dr. Placzek brought an MWA claim against Mayo Clinic
alleging that Mayo Clinic retaliated against Dr. Placzek for reporting a violation of
law. Dr. Placzek also brought a breach-of-contract claim against MCHS for (1)
failing to provide additional days of STD benefits for her 2015 miscarriage, (2)
improperly paying her STD benefits for her 2016 maternity leave at a lower rate than
was required, and (3) not allowing her to use paid vacation for part of her maternity
leave. She asked the district court for a declaratory judgment that MCHS breached
the contract and that she does not need to repay her educational-loan reimbursement.
Lastly, she alleged that MCHS violated the MPWA by failing to pay her earned
wages during her 2016 maternity leave. The district court granted summary
judgment to Mayo Clinic and MCHS on all claims. Dr. Placzek appeals.
II.
We review a grant of summary judgment de novo. Johnson Tr. of Operating
Eng’rs Loc. #49 Health & Welfare Fund v. Charps Welding & Fabricating, Inc.,
950 F.3d 510, 520 (8th Cir. 2020). “Summary judgment is proper if there are no
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genuine issues of material fact and the moving party is entitled to judgment as a
matter of law.” Green Plains Otter Tail, LLC v. Pro-Env’t, Inc., 953 F.3d 541, 545
(8th Cir. 2020). “Where the record taken as a whole could not lead a rational trier
of fact to find for the nonmoving party, there is no genuine issue for trial.” Id.A.
First, we consider Dr. Placzek’s MWA claim against Mayo Clinic. The MWA
prohibits an employer from retaliating against an employee when the employee “in
good faith[] reports a violation . . . to an employer.” Minn. Stat. § 181.932, subd. 2.
Under the Act, “employee” means “a person who performs services for hire in
Minnesota for an employer” not including “an independent contractor.” Minn. Stat.
§ 181.931, subd. 2. Dr. Placzek argues that she can bring an MWA claim against
Mayo Clinic because she was an employee of Mayo Clinic.
To determine whether someone is an employee or an independent contractor,
Minnesota courts consider “(1) [t]he right to control the means and manner of
performance; (2) the mode of payment; (3) the furnishing of material or tools; (4)
the control of the premises where the work is done; and (5) the right of the employer
to discharge.” Guhlke v. Roberts Truck Lines, 128 N.W.2d 324, 326 (Minn. 1964).
The most important factor “is the right of the employer to control the means and
manner of performance.” Id. Minnesota courts do not require that all factors weigh
in one direction to find employee or independent-contractor status. See, e.g., St.
Croix Sensory Inc. v. Dep’t of Emp. & Econ. Dev., 785 N.W.2d 796, 800-04 (Minn.
Ct. App. 2010). “Whether an individual is an employee or independent contractor
is a mixed question of law and fact.” Id. at 799. “Once the controlling facts are
determined, the question whether a person is an employee becomes one of law.”
Jenson v. Dep’t of Econ. Sec., 617 N.W.2d 627, 629 (Minn. Ct. App. 2000). We
review questions of law de novo. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,
572 U.S. 559, 563 (2014); Kramer v. Cash Link Sys., 715 F.3d 1082, 1086 (8th Cir.
2013) (“[T]he standard of review is a procedural issue that is governed by federal
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law.”). Here, the parties agree on the controlling facts; thus, we review de novo
whether Dr. Placzek was an employee or an independent contractor of Mayo Clinic.
We begin with the control factor. Although control is usually the most
important factor,
the issue of control is less useful in the context of emergency room
physicians than in some other settings because a hospital must assert a
degree of conflicting control over every doctor’s work . . . to discharge
its own professional responsibility to patients, regardless whether the
physician is an employee or independent contractor.
Glascock v. Linn Cnty. Emergency Med., PC, 698 F.3d 695, 698 (8th Cir. 2012)
(internal quotation marks omitted) (interpreting federal common law but using a
similar test to Guhlke). When evaluating control, we can consider facts such as
scheduling, performance reviews, restrictions on a physician’s ability to work
elsewhere, and whether a physician can refuse to perform services or see patients.
See Glascock, 698 F.3d at 698 (finding the control factor inconclusive when the
hospital “set [the physician’s] schedule based on her availability and preferences,
urged her to attend monthly meetings, and regularly reviewed her performance,” but
the physician “determined which patients she would see” and was “pretty much on
[her] own”); Cunningham v. Herbert J. Thomas Mem’l Hosp. Ass’n, 737 S.E.2d 270,
280 (W. Va. 2012) (discussing whether a doctor was required to work exclusively at
the hospital).
Here, although Mayo Clinic approved Clinical Associate appointments,
scheduled Dr. Placzek, decided her compensation rate, supervised her, and gave her
performance reviews, this does not mean that Mayo Clinic controlled Dr. Placzek.
MCHS retained “[p]rimary appointment, oversight and accountability,” MCHS
jointly made Clinical Associate appointment recommendations with Mayo Clinic,
and Mayo Clinic’s performance reviews followed the MCHS assessment process.
Mayo Clinic did not control how many hours Dr. Placzek worked; MCHS approved
her time at Mayo Clinic, even though Mayo Clinic scheduled her; and Mayo Clinic
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did not control where else she worked like MCHS did. True, unlike Glascock, it is
unclear whether Dr. Placzek could decide which patients to see, but the other facts
suggest that Mayo Clinic did not control Dr. Placzek. See Glascock, 698 F.3d at
698. In sum, though it is a close call, we find on these facts that this factor weighs
in favor of independent-contractor status.
Second, considering the mode of payment, Dr. Placzek was paid only by
MCHS, but Mayo Clinic set its own pay rate that was different from MCHS, and
Mayo Clinic reimbursed MCHS for Dr. Placzek’s work at Mayo Clinic. Even
though Mayo Clinic reimbursed MCHS and set the payment rate, this factor favors
independent-contractor status because Dr. Placzek was paid by MCHS. See
Cunningham, 737 S.E.2d at 278 (applying a similar test to Guhlke and holding that
this factor favored independent-contractor status when a hospital did not pay the
doctors directly but reimbursed the doctors’ employer).
Normally, the third and fourth factors would weigh in favor of Dr. Placzek
being considered an employee of Mayo Clinic because it furnished medical
equipment and controlled the hospital premises. Not so, however, when considering
medical staff because all medical staff “must work inside the hospital using its
equipment.” Alexander v. Avera St. Luke’s Hosp., 768 F.3d 756, 763 (8th Cir. 2014)
(interpreting federal common law but using a similar test to the Minnesota one); see
also Boily v. Comm’r of Econ. Sec., 532 N.W.2d 607, 607, 609 (Minn. Ct. App.
1995) (finding that dentists were independent contractors when the owner of the
dental clinic “provide[d] the major equipment needed” but “[t]he dentists provide[d]
their own chosen small tools, malpractice insurance, and continuing dental
education”). Thus, we find that this factor is inconclusive.
Fifth, the right of termination is expressly given only to MCHS in the
employment agreement. Neither the employment agreement nor the Clinical
Associate Policy says whether Mayo Clinic could unilaterally terminate Dr.
Placzek’s Clinical Associate appointment, though it did just that, despite
appointment recommendations being made jointly between Mayo Clinic and
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MCHS. Mayo Clinic could not terminate Placzek’s employment with MCHS—the
termination letter states “[y]ou will remain an employee of MCHS.” Because no
document granted Mayo Clinic any right to termination, this factor weighs in favor
of independent-contractor status. See Cunningham, 737 S.E.2d at 278 (finding that
this factor favored independent-contractor status when the agreement did not grant
the hospital power to dismiss the doctors from the hospital or from their employer).
In sum, no factors weigh in favor of employee status, and three weigh in favor
of independent-contractor status, so we conclude that Dr. Placzek was an
independent contractor and not an employee of Mayo Clinic. Thus, the district court
properly granted summary judgment for Mayo Clinic on Dr. Placzek’s MWA claim.
B.
Next, we consider Dr. Placzek’s breach-of-contract claims, which are
governed by Minnesota law because of the employment agreement’s choice-of-law
provision. Allianz Ins. Co. of Canada v. Sanftleben, 454 F.3d 853, 855 (8th Cir.
2006). Under Minnesota law, the elements of a breach-of-contract claim are: “(1)
formation of a contract, (2) performance by plaintiff of any conditions precedent to
his right to demand performance by the defendant, and (3) breach of the contract by
defendant.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 543
(Minn. 2014). At issue here is the third element—whether MCHS breached the
contract. Dr. Placzek identifies three instances when MCHS allegedly breached the
contract.
First, Dr. Placzek claims that MCHS breached the contract by giving her only
five rather than twelve days days’ worth of STD benefits for her 2015 miscarriage.
Before addressing the merits of this claim, we must determine whether it was timely
filed. The statute of limitations for claims involving the payment of wages is two
years, unless “nonpayment is willful and not the result of mistake or inadvertence,”
in which case it is three years. Minn. Stat. § 541.07(5). Dr. Placzek concedes that
her complaint is timely only if the three-year statute of limitations applies.
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Nonpayment was “willful” only if it amounted to an “intentional and deliberate
breach of an obligation to pay agreed upon wages.” Levin v. C.O.M.B. Co., 441
N.W.2d 801, 805 (Minn. 1989). We assume without deciding that short-term
disability payments qualify as wages under Minnesota law. See Wolfe v. 3M Short-
Term Disability Plan, 176 F. Supp. 2d 911, 915 (D. Minn. 2001) (applying the statute
of limitations in section 541.07(5) to a claim for disability benefits under ERISA). 2
Dr. Placzek argues that her claim falls within the three-year statute of
limitations because MCHS’s nonpayment was willful. First, Dr. Placzek argues that
in 2015 MCHS was aware of her STD claims yet failed to pay her STD benefits,
thereby “intentional[ly] and deliberate[ly] breach[ing]” the contract. See Levin, 441
N.W.2d at 805. Dr. Placzek claims that in 2015 she informed MCHS of her
miscarriage by telling her medical director that she needed time off. Dr. Placzek
admits, however, that she did not specifically request STD benefits and instead
discussed with her medical director scheduling for the days she would need to take
off. Dr. Placzek also claims that she identified specific days for which she is entitled
to STD benefits, but she cannot identify a communication from 2015 where she
specifically requested twelve days off and admits that there is no record of her
request. And MCHS explained that as soon as it found out about Dr. Placzek’s 2015
STD claim, “[it] did what was the right thing to do,” which was “to look into it at
that point and try to make it right with her,” and paid her five days of STD benefits
despite the Recovery and Claims department originally determining that she was
entitled to only three days. On these facts, no reasonable jury could find that Dr.
Placzek carried her burden of showing that MCHS “intentional[ly] and deliberate[ly]
breach[ed]” the contractual agreement by failing to pay STD benefits to Dr. Placzek
in 2015. See Levin, 441 N.W.2d at 805; cf. Wang v. Jessy Corp., No. 17-5069, 2020
WL 3618596, at *3-4 (D. Minn. July 2, 2020) (finding a genuine dispute of material
fact as to whether nonpayment of overtime was “willful” when the employer
“transported his employees to and from work, set their work schedule, monitored
2
The parties do not argue that ERISA applies in this case and therefore we do
not address ERISA.
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their daily work,” the restaurant lacked an overtime policy, and employees worked
at least 48 hours per week). Therefore, Dr. Placzek’s claim for STD benefits for her
2015 miscarriage is barred by the statute of limitations. Thus, the district court
properly granted summary judgment for MCHS on the issue of whether MCHS’s
nonpayment of STD benefits was a breach of the contract.
Second, Dr. Placzek claims that MCHS breached the contract by paying her
STD benefits for her 2016 maternity leave based on her assigned FTE rather than
her “actual,” higher FTE. “No statute or case law in Minnesota mandates the terms
on which paid time off must be offered, or that it be offered at all.” Lee v. Fresenius
Med. Care, Inc., 741 N.W.2d 117, 126 (Minn. 2007). Thus, Dr. Placzek must show
that MCHS had a contractual obligation to pay STD benefits at her actual FTE. Dr.
Placzek has not met this burden because she has not identified a contractual
provision that entitles her to STD benefits calculated at her “actual” FTE. In fact,
none of MCHS’s documents uses the phrase “actual” FTE. The employment
agreement does not discuss STD benefits or how they are calculated, and MCHS’s
STD policy does not say that STD benefits are based on an employee’s “actual”
rather than assigned FTE. MCHS testified that STD payments are calculated based
on an employee’s salary, and emergency-room physicians’ salary is based on their
“specific FTE,” referring to what Dr. Placzek calls her assigned FTE, and adjusted
quarterly to account for “actual shifts worked.” MCHS never calculated an “actual”
FTE and therefore no reasonable jury could find that STD benefits were based on
the employee’s “actual” FTE. Thus, the district court properly granted summary
judgment for MCHS on the issue of whether Dr. Placzek was entitled to STD
benefits based on her actual rather than assigned FTE.
Third, Dr. Placzek claims that MCHS breached the contract by failing to
recognize the second half of her maternity leave as paid rather than unpaid vacation
time. Dr. Placzek argues that MCHS’s policies grant her paid vacation time and that
even if MCHS’s interpretation that they do not grant her paid vacation is reasonable,
the contract is ambiguous and a jury must resolve the ambiguity. “When interpreting
a contract, we look to its language to determine the parties’ intent.” Savela v. City
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of Duluth, 806 N.W.2d 793, 796 (Minn. 2011). “[W]e assign unambiguous contract
language its plain meaning.” Id. at 796-97. “The determination of whether a
contract is ambiguous is a question of law.” Current Tech. Concepts, Inc. v. Irie
Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995). “In making that determination, a
court must give the contract language its plain and ordinary meaning.” Id. “A
contract is ambiguous if its language is reasonably susceptible of more than one
interpretation.” Id.Dr. Placzek was not entitled to any paid vacation time under her employment
agreement or any other policies. The employment agreement provides that
“Physician shall . . . be entitled to take time off for vacation . . . as determined by
Employer under its related policies and procedures.” It does not provide for paid
vacation days. Dr. Placzek argues that although the employment agreement does
not specify paid vacation, the references to paid vacation in other policies make clear
that the employment agreement means paid vacation. Dr. Placzek’s argument fails
because the policies she cites do not state that she had paid vacation time. For
example, she cites two policy provisions that explain how employees who do have
paid vacation time may use it for FMLA leave, but neither states that emergency-
room physicians have paid vacation time. She also points to the “Physician Benefit
Highlights 2013,” which provides the number of vacation days an employee receives
based on tenure. But it too does not specify that vacation days are paid. Finally, she
cites the Professional Absence policy which states that “[i]f there are enough
available vacation days, time is paid.” This policy is incompatible with Dr.
Placzek’s compensation structure, which requires emergency-room physicians to
work a certain number of hours per year and shifts per quarter, meaning they must
make up any missed shifts. And the policy does not state that emergency-room
physicians have paid vacation days, but rather provides the codes employees should
use to record vacation time, assuming they have it. In sum, the plain language of the
agreement and policies does not guarantee Dr. Placzek paid vacation, and the
employment agreement is not “reasonably susceptible to more than one
interpretation.” See Staffing Specifix, Inc. v. TempWorks Mgmt. Servs., Inc., 913
N.W.2d 687, 691 (Minn. 2018). Thus, the district court properly granted summary
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judgment for MCHS on the issue of whether Dr. Placzek was entitled to use paid
vacation for her 2016 maternity leave.
C.
Finally, we turn to Dr. Placzek’s MPWA and declaratory-judgment claims.
These claims fail because they are derivative of Dr. Placzek’s breach-of-contract
claims. The MPWA “is a timing statute, mandating not what an employer must pay
a discharged employee, but when an employer must pay a discharged employee.”
Lee, 741 N.W.2d at 125. Because Dr. Placzek is not entitled to payment for breach
of contract, her MWPA claim fails and she is not entitled to a declaratory judgment
that MCHS breached the contract or that she does not need to repay her educational-
loan reimbursement. Thus, the district court properly granted summary judgment
for MCHS on Dr. Placzek’s MPWA and declaratory-judgment claims.
III.
For the foregoing reasons, we affirm the district court’s grant of summary
judgment in favor of the defendants.
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