In a decision with significant implications for private hospitals, on March 7, 2017 the Third Circuit held in Doe v. Mercy Catholic Medical Center that medical residents may bring private causes of action for sex discrimination under Title IX against private teaching hospitals operating residency programs, and are not limited to claims under Title VII.

Title IX of the Education Amendments of 1972, 20 U.S.C. §1681, et seq., prohibits sex discrimination in any “education program or activity receiving federal financial assistance.” 20 U.S.C. § 1681(a). A former resident alleged the director of her program repeatedly sexually harassed her and then retaliated against her for resisting his advances and complaining about them, culminating in her termination from the program. In deciding a question of first impression, the Third Circuit held that Mercy could be sued under Title IX because, under the allegations of the complaint, its medical residency program constituted an “education program or activity” provided by a private organization principally engaged in the business of providing health care, 20 U.S.C. §1687(3)(A)(ii), that received Federal financial assistance. In so holding, Court established a test to determine whether a program is educational, asking whether it is structured as an educational program, allows participants to obtain a degree or certification or qualify for an examination, has instruction, tests, or grades, accepts tuition, and is promoted as educational. The Court had little trouble finding that the allegations demonstrated plaintiff was enrolled in a multi-year regulated program of study and training that led to qualification to take a certification examination, and that this program was run by Mercy in affiliation with Drexel University’s College of Medicine, a university program also plausibly covered by Title IX.

Notably, the Court did not reach the question of whether Mercy’s receipt of Medicare payments constituted “Federal financial assistance” under Title IX because Mercy had not raised this issue in the District Court, although it expressed some skepticism towards Mercy’s argument that such payments merely flowed from “contracts of insurance.” In this regard we note that a number of courts have found Medicare payments can constitute Federal financial assistance for the purpose of coverage under Title VI and the Rehabilitation Act.

Importantly, the Court rejected Mercy’s argument that the plaintiff’s remedy should be limited to an action under Title VII (which would have been time-barred) because she was also an employee, finding that there is concurrent liability under Title VII. In this regard it followed decisions from the First and Fourth Circuits, rejecting conflicting decisions from the Fifth and Seventh Circuits that predated the Supreme Court’s decision in Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005), where the Supreme Court found a high school coach who alleged a retaliatory termination could sue under Title IX. Thus, it found that that implied causes of action exist under Title IX for claims of both retaliation and quid pro quo sexual harassment and that, where an individual is covered by both Title IX and Title VII, that plaintiff can file complaints through either means. However, the Court did not reach the question of whether Title VII’s potential applicability barred a Title IX claim for hostile environment because that claim was time-barred under Title IX’s two-year statute of limitations.

This case stands as a warning to hospitals and other health care institutions providing accredited teaching and training programs to ensure that they have in place and follow policies that not only bar sexual discrimination, harassment and retaliation, both in general and with respect to medical residency and other educational programs, but also provide an effective complaint procedure for addressing claims that these policies have been violated. These institutions also should be aware that employees covered under both Title VII and Title IX may pursue their discrimination claims under Title IX in federal court without first exhausting their administrative remedies, as required under Title VII.