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When Independent Contractors Discriminate, Employers May Be Liable

We have known all along that employers can be held liable for the discriminatory acts of managers, supervisors and even employees.  But what about independent contractors?  According to a recent decision by the U.S. Court of Appeals for the Second Circuit, the answer can be yes.

In Halpert v. Manhattan Apartments, Inc., the plaintiff, a job applicant, sued the employer for violations of the Age Discrimination in Employment Act after the interviewer said he was too old for the job.  The employer defended by arguing the interviewer was actually an independent contractor hiring employees for himself.  The trial court agreed with this argument and dismissed the plaintiff’s case.

On appeal, the Court of Appeals reversed, holding there was enough evidence presented so that a jury might find either (1) the independent contractor was authorized by the employer to hire on it’s behalf (actual authority), or (2) the employer, through its own words or conduct, created, in the eyes of the job applicant, the appearance that the independent contractor was authorized to act on the employer’s behalf (apparent authority).  Among some of the evidence considered were the following:

  • The interview took place in the employer’s offices;
  • The employer sponsored the program under which potential participants would be interviewed by the independent contractor; and
  • The career counselor who arranged the interview believed plaintiff was being interviewed for a position with the employer, not the independent contractor.

Employers relying on independent contractors must require they make it clear when hiring or taking any other actions, that they are acting on their own behalf and not on behalf of the employer.  On the other hand, employers should ensure that outside companies doing their hiring are abiding by the employer’s non-discrimination policies and agree to indemnify the employer in lawsuits alleging failure to hire.