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Independent Contractors Permitted to Sue
The latest ruling on the ability of independent contractors to sue for discrimination adds to the split between the federal appellate courts on the issue. The split may ultimately persuade the U.S. Supreme Court to decide the issue. In the meantime, HR leaders would be wise to pursue processes that would head off litigation altogether.
A federal appeals court decision granting an independent contractor the right to sue an employer for discrimination could mean the U.S. Supreme Court will eventually decide to take up the issue. The U.S. 9th Circuit Court of Appeals recently overturned an earlier court decision when it ruled in favor of a contractor's right to sue the Yuma Regional Medical Center in Yuma, Ariz., after being turned down for a job there. The 9th Circuit is the second federal appeals court that has ruled in favor of a contractor's right to sue. Two others have ruled against such a right. In his opinion, federal Judge Jay S. Bybee said the Rehabilitation Act -- which covers federal employees and incorporates the Americans with Disabilities Act -- defines what "substantive standards" should be used in determining what conduct violates the Act, but does not define exactly "who" is covered by the Act. "When Congress said that the Rehabilitation Act should use the 'standards' applicable to employment discrimination claims brought under Title 1, we think Congress meant for us to refer to [the ADA] for guidance in determining whether the Rehabilitation Act was violated," Bybee writes. "But we do not think that Congress meant to restrict the coverage of the Rehabilitation Act." The ruling notes the Act covers any organization that receives federal financial assistance -- which the medical center does. The case involves Dr. Lester Fleming, an independent contractor, who had applied for a position as an anesthesiologist at Yuma Regional in 2005, according to court documents. When hospital officials learned he suffered from sickle-cell anemia, they told Fleming they would not be able to accommodate his operating-room and call schedules. Fleming then sued Yuma Regional in U.S. District Court for breach of his employment contract and employment discrimination in violation of Section 504 of the Rehabilitation Act. Attorneys for Yuma Regional argued he had no right to sue because independent contractors are not protected by the Act; only full-time employees are. Michael Lotito, a workplace-law expert and partner in the San Francisco office of law firm Jackson Lewis, says that the ruling "seems to say that, since the statute is so broad in its application to outlaw discrimination [in any government funded organization] ... then even independent contractors are covered." But "the broader implications," says Lotito, "are what can be found in what the court did not say." "The workplace is changing," he says, noting that many "so-called independent contractors ... are really not [independent] in reality, as the person is dependent on the employer for his or her livelihood." "Call the worker whatever you want," says Lotito, "but when the employer calls the critical shots and is receiving benefit from the person as if he or she was an employee, then the antidiscrimination laws should not be ignored as a result of a label. "That is clearly where the law is going," he says. "How long it will take to get there is anyone's guess. But who wants to be the next test case?" "Regardless of label," Lotito adds, "if the employer can act fairly, it should. Here, [Yuma Regional] seemed to say no accommodation was possible. Perhaps so. But with the benefit of 20-20 hindsight, the employer would have been in a better defensive position if it had pursued an aggressive interactive process so it could say, 'No matter how the person is defined, we did all the law required us to do, and more, since the person was not even an employee.' " However, Joseph Beachboard, a Los Angeles-based labor and employment attorney with Ogletree Deakins, says the argument that Fleming should have the same legal rights as a Yuma Regional employee because of a certain interpretation of the Rehabilitation Act and it's references to the ADA is "tortured logic." "Why are we treating federal contractors any differently than non-federal contractors?" he asks. "To try to force independent contractors into the definition of employees by arguing over what the ADA really meant [suggests] these courts have decided that they want to reach a goal [that makes no sense] because it doesn't exist in any other arena." The case itself, Beachboard says, is "probably getting more media attention than it should" because many stories are suggesting it "determines whether independent contractors have the right to sue for discrimination in all sectors" instead of just sue businesses that receive federal funding. "This whole independent-contractor issue -- what rights they have, including whether they can sue for discrimination -- is really one of the hottest topics going in employment law," he says. "But this case is much more specific than that; it refers only to independent contractors working for federal contractors that are, in turn, receiving federal dollars for the work those independent contractors are doing. "It's not the deciding factor people think it is," he says. Joshua A. Stein, co-chair of the Accessibility and Accommodations Practice Group for New York-based law firm Proskauer Rose, also questions whether the Yuma Regional decision will significantly affect discrimination law, but he says it does represent "the latest in a series of recent developments providing additional protections to a greater number of individuals with disabilities." "While the Yuma decision has exacerbated a circuit [court] split that may eventually find itself resolved by the Supreme Court," says Stein, "its impact -- both in the present and down the road -- is not apt to be as broad as some might fear" as it only applies to programs or activities that receive federal funding. "Such a ruling," he says, "would still be several steps away from any sort of general protection of independent contractors by all employment-discrimination statutes." What is apparent in the Yuma Regional case, Stein adds, is that "courts are issuing an increasing number of decisions that can be seen as expanding upon the protective coverage of the ADA and Rehabilitation Act." "More so now than perhaps ever before," he says, "employers and places of public accommodations need to stop viewing accessibility obligations as simply a series of rules, standards and regulations, and start utilizing a civil-rights prism that applies these statutes both more expansively and creatively, with a greater focus on the accommodation process."
December 16, 2009 Copyright 2009© LRP Publications |
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