The Supreme Court decision reverses a contrary ruling by the United States Court of Appeals for the 6th Circuit that a business owner may be only an "employer" and not also an an "employee" with regard to ERISA-sheltered plan participation.

According to Justice Ginsburg, who authored the opinion, if the plan covers one or more employees other than the business owner and his or her spouse, the working owner may participate on equal terms with the other plan participants. Thus, such a working owner qualifies for the ERISA protection afforded to any participant.

Justice Ginsburg further indicated that it is unnecessary to look outside ERISA to conclude that Congress intended working owners to qualify as plan participants.

The Yates decision leaves undisturbed the rule that Keogh (H.R. 10) plans that cover only the sole proprietor (or the sole proprietor and spouse) do not have ERISA Title I protections. However, a Keogh plan which has one or more common-law-employees in addition to the self-employed individual will be covered under Title I of ERISA.