Written by David Barmak and Greg Bennett
The recent decision of the United States Court of Appeals for the Second Circuit in Halpert v. Manhattan Apartments, Inc. illustrates yet another risk for employers who engage independent contractors to work for them and provides a reminder that an employer may be liable for the discriminatory conduct of independent contractors. In Halpert, an applicant who was refused a job at Manhattan Apartments, Inc. (MAI), sued MAI alleging discrimination under the Age Discrimination in Employment Act of 1967 (the “ADEA”). The applicant, Mr. Halpert, alleged that the person who interviewed him, a Mr. Brooks, declined to offer Halpert the position showing apartments to potential renters because “they were looking for someone younger.”Although it was apparently uncontested that Brooks was an independent contractor of MAI, not an employee, the Court stated that the prohibition against age discrimination “applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors, to fill that role.”The Court also stated that “[i]f a company gives an individual authority to interview job applicants and make hiring decisions on the company’s behalf, then the company may be held liable if that individual improperly discriminates against applicants on the basis of age.” The Court said that common law agency principles should be applied to determine whether or not an independent contractor was acting within the scope of his agency when making hiring decisions for the employer. The Court held, therefore, that the district court’s grant of summary judgment for MAI was inappropriate and remanded the case to the district court to determine whether MAI’s degree of control over the interview and hiring process rendered Brooks MAI’s agent, exposing MAI to liability for Brooks’s discriminatory conduct.
The moral of the story: when it comes to discrimination and other employment law claims, employers may be liable for the actions of their independent contractors. This should be taken into account when considering and structuring an independent contractor relationship. And, of course, employers would be wise to ensure that an independent contractor engaged in recruiting, hiring, or supervising employees for the employer is well trained and attentive to following the law.